Advisors’ Reputational Concerns are Most Prevalent at Firms Who Lack Clear Guidance Regarding Digital Assets
CoinShares International Limited, a global investment firm specializing in digital assets, released a survey showing that financial advisors weigh their professional reputation among colleagues almost as heavily as their fiduciary duty when determining the suitability of digital assets for their clients.
Sixty two percent of advisors believe recommending a speculative asset like Bitcoin does not align with their legal obligation to act in their client’s best interest, and more than half of the 250 advisors surveyed worry that recommending digital assets could have a negative impact on their relationships with their colleagues.
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The growth of ETFs approved by the Securities and Exchange Commission, the outlook for a potentially more favorable regulatory climate as well as clients’ desire to independently invest in crypto, is leading advisors to reassess how they address challenges in navigating the evolving digital asset landscape. At the same time, sentiment within their own organizations has shifted toward crypto and their clients are showing more enthusiasm toward the emerging asset class since the U.S. Presidential election.
Navigating these tensions is leading advisors to seek additional resources to close their own knowledge gaps on digital assets; the survey found that advisors’ fears about conflicts with both audiences are amplified when they feel they don’t have clear guidance from their own firms regarding digital assets.
Jean-Marie Mognetti, CEO of CoinShares, commented: “Advisors are caught in a challenging position, trying to navigate conflicting positions between their colleagues and clients. Clear guidance, both at a firm level and at a regulatory level, will be essential to navigating this divide in 2025. Since 2014, CoinShares has been committed to educating financial advisors in Europe about this emerging asset class, and we look forward to continuing that mission in the U.S.”
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Key takeaways from the survey include:
- Advisors face conflicting pressures. 74% of respondents say the pressure to align with traditional financial goals conflicts with the push from cryptocurrency firms to make digital assets a core portfolio component. Additionally, as clients pursue cryptocurrency investments independently, 79% of advisors believe their role is shifting towards risk management.
- Advisors feel their clients underestimate volatility as a risk. 53% of advisors rank volatility as a top concern when assessing challenges in advising clients on potential digital asset investments.
- Regulatory approval is the key catalyst. 88% say the SEC’s approval of Bitcoin and Ethereum ETFs has made them more optimistic about digital assets, and 2 out of 3 advisors (62%) say SEC approval is one of the top three factors that impacts their ability to present digital assets as investment opportunities to clients.
- Advisors want to learn more but find biased information a significant barrier. More than eight out of 10 advisors surveyed are willing to pay for education to enhance their knowledge of digital assets. However, 43% see crypto-native firms publishing biased information as a barrier to further understanding.
- Shift in attitudes towards digital assets following the election. 85% of advisors say the sentiment of their organization toward digital assets has changed since the election; while 80% noted clients have more positive attitudes towards digital assets and 85% say the election impacted how they are advising clients on portfolio diversification.
Jean-Marie Mognetti, CEO of CoinShares, commented: “Investor interest in digital assets has been growing for more than a decade, but has been historically niche; we are now at an inflection point where mainstream adoption is a reality. Financial advisors are rapidly developing their expertise in digital assets to address potential knowledge gaps and better align with client needs.”
The CoinShares survey polled 250 advisors who work full time and are responsible for providing advice on investments and portfolio management. They hold Series 7, 63, or 65 licenses, work for a wealth or investment management firm or brokerage firm and provide advice on at least three investment types. The survey results are subject to a margin of error of ±6.2%, adhering to rigorous standards of statistical reliability.
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Source: PR Newswire
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