So much for 20/20 vision.

The Senate voted this week to block consideration of the Clarity Act, a bill crafted to provide regulatory guidance on cryptocurrencies, strengthen consumer protections and make institutions more comfortable participating in the asset class. In the absence of federal regulation, the SEC and CFTC will continue to advance their own regulations. It’s a blow to the crypto industry, but one that was largely expected, and for investors, not much has changed. But for advisors, it’s a reminder of the importance of educating clients on crypto, said Don Friedman, CEO of the Digital Assets Council of Financial Professionals.

“Since the federal government was unable to provide clear rules to the roads, it’s even more important that end investors use an advisor to get educated on this asset class,” Friedman said. “Would the passage of Clarity give people more comfort and increase the probability of the major cryptocurrencies rising in value? Yes, but presently, it’s reflective in the market that it’s business as usual.”

Who’s the Ref?

With no federal legislation, the regulation of crypto will fall to the agencies. “What you’ll probably see is new rulemaking from both the SEC and CFTC that will make the rules for advisors and what they can participate in,” said Joe Sticco, cofounder of Cryptex Finance, adding that FINRA will also likely step up. “I don’t really think that it’ll be much of a difference versus Clarity.”

But because agency regulation is not the same as laws passed by Congress, the SEC and CFTC could become less crypto-friendly if a Democrat ends up in the White House in two years, Friedman said. “They’re likely going to replace [SEC Chairman Paul] Atkins and put in a Democrat-leaning SEC chair, and they can unwind everything that Atkins does.”

Regardless, the crypto market’s reaction was somewhat muted:

• The price of bitcoin fell from around $78,000 on Monday to about $76,000 at the close of markets on Wednesday.
• Spot bitcoin ETFs did have outflows after the news, shedding $450 million on Tuesday, the largest daily outflow since June, according to SoSoValue data.

Dipping a Toe After the Dip. The price decline could give long-term investors an opportunity to do some dollar-cost averaging in the crypto market, Friedman suggested. “It was prudent for investors who were looking to either buy or sell to wait until there was clarity on whether or not this thing passed,” he said. “Now that it didn’t pass, and it seems to be that the market is relatively calm, I think it could be an opportunity to put one foot in the water.”

It requires little imagination to picture artificial intelligence as a potential career-killer. The reality, however, may be quite different for financial advisors.

Advisor headcount is actually expected to grow as AI expands productivity and work capacity, according to Cerulli research conducted from May to July at firms holding a combined $1.2 trillion in assets. Over the next two years, RIAs said they plan to do a lot of hiring, with 73% making junior advisors a top priority, 67% bringing on more service associates and more than half of firms focusing on senior advisors. All of that expansion is partially a result of AI reducing manual and administrative work while improving the quality of client communications.

“It is not lost upon the financial industry that this is a huge deal,” tech-stock bull Dan Ives said during a panel at the Future Proof Festival this week. He said the AI revolution will be a net positive across all industries. “More jobs will be created than taken away when it’s all said and done.”

Harnessing AI effectively is also essential to attracting more clients, especially at the high-net-worth end of the market amid the great wealth transfer, said David Barnard, founder of estate planning fintech firm Luminary. “The firms that get this right are not just going to win the great wealth transfer, they’re going to grow their businesses faster today,” he told Advisor Upside.

Bigger Isn’t Always Better

But while it often feels like AI is the only thing business executives are talking about, full adoption of the tech is actually quite shallow, with only 12% of firms qualifying as “leaders” in Cerulli’s framework:

• Most firms are using AI in some capacity, but they’re still very much in the piloting phases, with models serving as notetakers and email drafters and handling CRM updates.
• Meanwhile, less than a third of RIAs have fully adopted an AI game plan, with the tech integrated across workflows and governed by a documented strategy.
• For the many firms still in early stages of their AI journeys, compliance, regulatory and data privacy concerns remain top barriers, followed by a lack of internal knowledge about how to use the tech.

“We expected the biggest firms or the biggest technology spenders to be furthest ahead, but the real differentiator was operational discipline,” Asher Cheses, senior director of wealth management consulting at Cerulli, said in an email. He added that the advisors who learn how to effectively incorporate AI into their workflows will have a significant advantage, while those who fail to adapt risk falling behind.

It Can Happen to You. In the meantime, there are instances of AI already replacing advisors. Domain Money, the RIA founded by venture capitalist Adam Dell, recently laid off “about half” of its financial planning team, InvestmentNews reported. Dell told the outlet the layoffs were a result of “improved automation and efficiency” that let one Domain Money advisor serve up to 150 clients.

Maybe that techno nightmare is more than just a bad dream.

Turns out, eating isn’t the only part of life where organic alternatives cost more. They also carry a premium when it comes to growth.

Last year, advisory practices actively pursuing expansion averaged about 9% organic revenue growth, while more mature firms not seeking to grow averaged about 5%. And advisory firms spent less last year on marketing as a percentage of overall revenue than in previous years, according to the latest report from Kitces research, at just 7%, reflecting the decline in firm revenues following 2022’s market downturn. Still, the vast majority of that value comes from advisor time — the time it takes to, say, write a newsletter — and marketing ROI doesn’t scale with AUM. According to the report, marketing costs tend to go up as a share of revenue as assets increase, but the returns diminish for larger firms.

“Advisors have access to more shiny bells and whistles than ever before,” said Becca Zophin, chief marketing officer at Integrated Partners. “It’s nearly impossible to stay ahead of every trend, and more marketing and activity doesn’t necessarily create more growth.”

High (Growth) in the Sky

Parsing through the data shows differences in how “high-growth” practices — those with organic new-client revenue growth rates in the top third of the firms surveyed — crafted their marketing strategies. They were more likely to use SEO, as well as to maintain active listings in online advisor directories. In other words, they were more likely to turn away from tactics that required a lot of time and effort up front in favor of those that made themselves more visible online to the curious client searching for a new firm.

According to the report, high-growth firms were also more likely to:

• Have at least one advanced industry designation, such as the CFP or ChFC (from the American College of Financial Services), as well as to have a more niche credential.
• Consult with at least three different sources of information (such as conferences, industry research or consultants) when devising their marketing plans.
• Use strategies that “actively increase visibility,” like in-person networking events, webinars and client appreciation events.

AEO, And Sometimes Y. AEO, or answer engine optimization, was also included in the Kitces report for the first time as a tactic used by firms to appear in answers generated by AI. This strategy’s usage rate is already at 10%, suggesting advisors’ acknowledgement that chatbots are increasingly being used by clients to find a new advisor. And it can be surprisingly effective: The rate at which potential clients became customers doubled in the fourth quarter last year compared with the same quarter in 2024, with much of that website activity being AI-driven, according to a recent Snappy Kraken report.

“Context is being gathered, and then AI makes a recommendation,” Sofia told Advisor Upside last month. “By the time [potential clients] come to the advisor’s website, they’ve already determined that they need a financial advisor, so it’s higher-intent traffic that’s more educated and therefore converting faster.”