Advisors, BDs Continue to Avoid Crypto: CFA Institute Study
What you need to know
- More than 90% of advisors and broker-dealers in a recent survey said their firms do not allow representatives to solicit sales of crypto assets.
- Advisors with five years of experience or less are more open to recommending crypto and comfortable discussing it with their clients.
- A recent SEC notice also warned investors to be cautious when investing in crypto-asset securities.
A recently released CFA Institute survey found that the majority of advisors avoid crypto assets and that broker-dealers prohibit representatives from selling crypto-related vehicles.
More than 90% of survey respondents reported that their firms do not allow representatives to solicit the sale of cryptoassets, and that 67% said they would not sell such investments to clients even if they were available to them.
Only 14% of respondents said they would, while 19% said they were unsure, the study said.
The survey data was collected from a survey of 340 broker-dealers conducted last November. The representatives are members of the Financial Services Institute.
“The survey results show that despite all the attention crypto has received, it still has a long way to go before it enters the mainstream of retail investing,” Stephen Deane, senior director of capital markets policy at the CFA Institute, said in a statement.
That said, “the findings also show greater receptivity among broker representatives who have entered the field in the last five years and are likely to have younger clients,” Deane added.
According to the study, advisors with five years of experience or less “were most likely to be open to recommending cryptoassets if they could, with 38% saying they would. Within the same group, 69% said they are comfortable discussing the topic with clients.”
However, advisors with more than 20 years of experience were “far less open, with only 12% saying they would sell cryptoassets if they were available. This group was also less comfortable talking about cryptoassets (40%) than their less experienced peers .”
While more than half of advisors “feel informed,” the study notes, a significant portion do not; 58% said they were either extremely, very, or moderately knowledgeable about cryptoassets, compared to 42% who said they were somewhat knowledgeable or had no knowledge at all.
Only 10% of respondents reported experiencing a significant increase in investor interest in cryptoassets over the past 12 months, while 44% reported no increase in interest over the same time period, the CFA Institute said.
