Despite recent signs of recovery in the cryptocurrency market, new data from research and insights agency Opinium reveals that only 5% of Independent Financial Advisers (IFAs) believe it presents an investment opportunity for their clients.
In addition, two thirds (66%) of advisers say they feel negative about cryptocurrency as an investment opportunity for their clients. Looking into the reasons why, two in five (42%) don’t trust cryptocurrencies and over a third (34%) don’t think it’s safe.
Some IFAs also have concerns about security when it comes to crypto, with over half (51%) revealing they think it’s more at risk of fraud and scams, and 55% believing it is not a market that is regulated enough, which leaves it open to crime.
The research reveals, however, that the negative view of crypto from IFAs may be down to a lack of understanding – with a quarter (25%) of advisers with a negative view stating they don’t understand it.
Alexa Nightingale, Global Head of Financial Services research at Opinium, commented: “Many IFAs express scepticism about cryptocurrency as an investment opportunity due to concerns over its volatility, lack of regulatory clarity, and potential for fraud. In addition, the dramatic price swings and the speculative nature of many digital assets, can lead to significant losses – which is likely another reason advisers tend to have a more negative view.
“This cautious stance reflects a broader concern about protecting clients from the inherent risks associated with the rapidly evolving crypto market. However, given it is evolving, and seemingly here to stay, it’s essential that those advisers who don’t feel they have a good understanding get across it quickly so that they can give their clients the best possible advice.”
