How Investment Advisers Became ‘Designated Drivers’

When the merely affluent seek investment help, their advisers generally call the shots. High-net-worth investors aren’t so easy to handle. Their peer group has told them what’s “hot,” and they want their advisers to get them in on the action. Result, an expanding category of alternative asset classes, including sneakers.

Bitcoin and other cryptocurrencies are the hottest of the hot. Many advisers dislike these unstable – and sometimes unserious –mediums of exchange, but they nevertheless have to yield to clients’ insistence: “OK, we’ll put one percent in bitcoin.” 

Even Jamie Dimon, CEO of JPMorgan Chase, finds he must curb his mistrust. His bank is launching a bitcoin fund.

 Dimon recently explained his dilemma to the House Financial Services Committee: "My own personal advice to people is: stay away from it. That does not mean the clients don't want it. This goes back to how you have to run a business. I don't smoke marijuana but if you make it nationally legal, I'm not going to stop our people from banking it.”

If the high-net-worth crowd is going to bet on crypto anyway, Dimon figures, at least JPMorgan advisers can help them do it without getting ripped off. They’re the designated drivers.