UK Financial Advisers Cannot Track Half of Client Cryptocurrency Holdings: New CoinShares Report
New research from CoinShares reveals that numerous wealth management firms across the European Union maintain restrictive policies on digital asset investments or lack clear guidelines altogether.
Research conducted by CoinShares, a provider of digital asset services, has revealed that over half of financial advisers based in the United Kingdom indicated that most of their clients' cryptocurrency investments remain beyond their purview.
Based on findings from a CoinShares survey made public on Thursday, 52% of advisers in the UK from a pool of 261 wealth management professionals across Europe stated that the majority of their clients' investments in digital assets were effectively "invisible" to their oversight. Across all European Union nations included in the study, encompassing France, Germany, Italy and Switzerland, this figure stood at 25%, while 61% of the advisers reported being employed at firms that either explicitly prohibited digital asset investments or failed to provide unambiguous internal guidance on the matter.
"The capital has already been allocated," said CoinShares co-founder and CEO Jean-Marie Mognetti. "The people entrusted with managing it simply cannot see it, and in most cases not because clients are unwilling to engage, but because firm policy prevents them from doing so. This is not a knowledge problem. It is not a demand problem. It is a firm-policy problem becoming a wrong-way risk."
He added:
"[...] Visibility comes before advice. You cannot allocate, manage risk or earn trust over assets you cannot see."
The Financial Conduct Authority (FCA) in the United Kingdom, which serves as the regulatory body supervising digital asset oversight, announced in December that approximately 8% of adults in the nation held investments in cryptocurrency. This regulatory body has recently put forward proposals that would permit authorized investment funds to maintain cryptocurrency exchange-traded note allocations of up to 10%.
Potential new leadership to shake up UK crypto policy?
On Monday, UK Prime Minister Keir Starmer stepped down from his position as Labour leader following mounting pressure from numerous members within his own party, creating an opportunity for a newly elected parliamentary member to assume control.
In a recent by-election, former Mayor of Greater Manchester Andy Burnham won a seat as a member of parliament representing Makerfield, positioning him to be heavily favored by many in Labour to replace Starmer. While it's unclear how Burnham may handle crypto policy on a national stage, as mayor, he supported the blockchain industry as a driver for economic development.