Crypto Challenge for Financial Advisors

A WisdomTree survey found that 72% of UK advisors have had a conversation with their clients about investing in digital assets. I have at least one conversation a week with someone asking “should I invest in Bitcoin?”.

Crypto exchange-traded products (ETP) have been available for some time in countries including Germany and Switzerland, a notable divergence from UK regulators that have yet to recognise cryptocurrencies as financial instruments.

Last October, the Financial Conduct Authority set out its hard-line stance by banning UK retail investment in crypto and warning those that put money into digital assets should prepare to “lose all their money”.

As such, risk management and education should be a priority, especially with such a nascent and fast-moving asset.

But despite growing client-side demand, the consensus from the UK adviser market, presently, is that the crypto market would need to become far more developed and regulated before it is actively advised on.

Regardless of how we may feel about the sector, people are investing already without advice.

A recent study found that 49% of millennials polled own cryptocurrency compared to 38% of Gen Xers and 13% of GenZ.

Millennials are also more likely to adopt the investment as a form of payment, with 53% saying they are “very likely” to purchase products or services with crypto, vs. 40% of GenX polled and just 7% of GenZ.

So we had all better know more about it