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March 27, 2023 at 12:12 PM
What You Need to Know
- More than 90% of advisors and broker-dealers in a recent survey said their firms do not allow reps 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 alert also warned investors to use caution when investing in crypto asset securities.
A recently released survey by the CFA Institute found that the majority of advisors are avoiding crypto assets and that broker-dealers prohibit reps from selling crypto-related vehicles.
More than 90% of the survey’s respondents reported that their firms do not allow reps to solicit sales of crypto assets, and that 67% said they would not sell such investments to clients even if they were available to them.
Only 14% of the respondents said they would, while 19% said they were unsure, the study said.
The survey data was collected from a survey commissioned by CFA Institute of 340 broker-dealer reps conducted last November. The reps are members of the Financial Services Institute.
“The survey results show that, despite all the attention that crypto has gained, it still has a long way to go before entering the mainstream of retailing investing,” Stephen Deane, senior director for Capital Markets Policy at CFA Institute, said in a statement.
That being said, “the findings also show greater receptivity among broker reps who have entered the field in the past five years and probably 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 crypto assets if they could, with 38% saying they would. Within that same group, 69% said they are comfortable discussing the topic with clients.”
Advisors with more than 20 years of experience, however, “were far less open, with only 12% saying they’d sell crypto assets were they available. This group was also less comfortable talking about crypto assets (40%) than their less experienced peers.”
While more than half of advisors “feel informed,” the study notes, a sizeable portion do not; 58% said they were either extremely, very or moderately knowledgeable about crypto assets, compared to 42% who said they were slightly knowledgeable or not knowledgeable at all.
Only 10% of the respondents reported experiencing a significant increase in investor interest for crypto assets over the previous 12 months, while 44% reported there has been no increase in interest in that same time period, CFA Institute said.
