Morgan Stanley is lifting its long-standing restrictions on which wealth management clients can invest in crypto funds, expanding access across its $8.2 trillion platform.
Effective October 15, financial advisors will be permitted to offer bitcoin and crypto funds to any client, including those with retirement accounts, as per CNBC’s reporting.
Previously, only investors with over $1.5 million in assets and an aggressive risk profile could participate. This change means that Morgan Stanley will allow all its wealth management clients, including those with retirement accounts, to invest in crypto without an asset cap.
This shift represents a significant policy change for the world’s largest wealth manager and illustrates Wall Street’s growing acceptance of digital assets since the Trump administration adopted a more favorable approach to crypto.
The decision follows Morgan Stanley’s recent initiative to facilitate trading of bitcoin and other cryptocurrencies on its E-Trade platform. To mitigate risk, the firm will implement automated systems to ensure that clients do not become overly exposed to crypto, as reported by CNBC.
Morgan Stanley acquired ETRADE in a stock deal valued at approximately $13 billion back in 2020.
Bitcoin allocation of up to 4%
Its investment committee recommends that clients maintain a maximum allocation of up to 4% in bitcoin and other cryptocurrencies, depending on individual financial goals. The bank’s latest report characterizes bitcoin as “digital gold” and a valid real asset, highlighting its increasing maturity despite ongoing volatility.
Morgan Stanley advised clients to regularly rebalance their multi-asset portfolios—ideally quarterly, or at least annually.
“Such rebalancing will mitigate the potential for inflated positions, which could lead to excessive portfolio-level volatility and cryptocurrency risk contributions during periods of macroeconomic and market strain,” the report noted.
The report suggested gaining exposure through exchange-traded products to manage volatility and avoid portfolio distortion during strong upward trends.
This strategy signifies a cautious yet receptive approach to incorporating crypto within traditional investment frameworks. This news coincides with bitcoin reaching new all-time highs.
On August 7, President Trump signed an executive order aimed at broadening investment options in retirement plans under ERISA. This directive instructs federal agencies to facilitate the inclusion of alternative assets like crypto, private equity, and real estate in 401(k) and 403(b) plans when deemed appropriate by fiduciaries.
