UK Wealth Advisers Struggle with Cryptocurrency Visibility

A recent survey by CoinShares has highlighted a concerning trend among UK wealth advisers. The study found that more than half (52%) of respondents reported that most of their clients' cryptocurrency exposure was 'invisible' to them, meaning it was not visible or overseen within the firm.

This finding is particularly striking given that only 25% of EU-wide respondents faced similar limited visibility into clients' crypto holdings. CoinShares CEO Jean-Marie Mognetti framed the issue as a 'firm-policy risk' rather than a client demand or knowledge gap, suggesting that internal policies and guidance within firms are often restrictive or unclear.

The survey's results have significant implications for both investors and financial institutions. Without accurate visibility into clients' crypto exposure, advisers cannot properly allocate capital, manage risk, or build trust through transparent guidance. This 'wrong-way risk' scenario can lead to portfolios that do not reflect the true risk profile, especially during periods of crypto volatility.

The UK's Financial Conduct Authority (FCA) has been working to shape the framework for crypto within retail and wealth contexts. The regulator has proposed allowing authorized investment funds to hold up to a 10% allocation of cryptocurrency exchange-traded notes. However, CoinShares' survey suggests that even with growing regulatory pathways for crypto allocation, institutional visibility may not match the needs of regulated advisory and wealth management processes.