Most Advisers Say Bitcoin and Digital Assets Misaligned With Fiduciary Duty
Advisers see a more favorable regulatory environment but also seek more independent education about cryptocurrency assets.
When considering whether to recommend digital assets for clients, financial advisers are concerned about their fiduciary duty to clients and want more unbiased education, according to a survey from CoinShares International Ltd.
Nearly two-thirds (62%) of advisers surveyed believe recommending a speculative asset like bitcoin does not align with their legal obligation to act in their clients’ best interest, and 79% of advisers believe their role is shifting toward risk management, as their clients may seek cryptocurrency investments independently. More than half of the 250 advisers surveyed worry that recommending digital assets could have a negative impact on their relationships with their colleagues.
Furthermore, 74% of respondents said the pressure to align with traditional financial goals conflicts with the push from cryptocurrency firms to make digital assets a core portfolio component. More than half (53%) of advisers ranked volatility as a top concern when considering whether to advise clients about potential digital asset investments.
As advisers are more willing to consider digital assets, they recognize a need for education—but want it to be independently offered. More than eight out of 10 advisers surveyed said they are willing to pay for education to enhance their knowledge of digital assets, but preferably not from a digital asset provider, as 43% said crypto-native firms publishing biased information is a barrier to further understanding.
However, advisers are increasingly changing their perspectives on digital assets, especially as they see a more favorable regulatory climate: 85% of advisers said the 2024 U.S. presidential election impacted how they are advising clients on portfolio diversification.
Nearly two in three advisers said approval by the Securities and Exchange Commission is one of the three factors that most impacts their ability to present digital assets as investment opportunities to clients, with the vast majority (88%) feeling more optimistic about digital assets since the SEC’s approval of bitcoin and Ethereum exchange-traded funds.
Firms are shifting as well, with most advisers (85%) noting the sentiment of their organization toward digital assets has changed since the election.