- While large financial institutions globally, such as Bank of America, move to allow their advisers to recommend crypto products, Aussie financial advisers remain poorly informed and reluctant to engage with crypto, according to Andrew McPhee from Swyftx.
- McPhee said many Aussie advisers continue to hold “outdated misconceptions about digital assets,” and mistakenly believe their clients aren’t interested in crypto, when they should be ramping up efforts to engage clients on crypto.
On January 5, Bank of America moved to allow its financial advisers to recommend crypto exchange-traded fund (ETF) products to their customers, reflecting an emerging global trend towards professional financial advisers becoming more comfortable with digital assets.
However, in Australia, many financial advisers still lack rudimentary knowledge of digital assets and are reluctant to even speak about them with customers, let alone recommend them as investments, according to financial services industry lead at Brisbane-based crypto exchange Swyftx, Andrew McPhee.
Speaking to Independent Financial Adviser, McPhee said that many Aussie financial advisers continue to hold “outdated misconceptions about digital assets.”
“The most common misconceptions I hear from the industry are crypto is a speculative bubble (often compared to tulips or pet rocks),” McPhee explained. Many advisers still believe crypto is “only used by criminals and money-launderers,” and that “there’s no real value being generated by crypto and that clients aren’t interested in crypto,” he said.
McPhee said the idea that Aussie investors aren’t interested in crypto is particularly misaligned with the facts — with a recent Swyftx/YouGov report finding that 21% of Australians already own crypto. He believes advisers’ perception of a lack of interest may be something of a self-fulfilling prophecy, with advisers’ reluctance to talk about crypto giving them the false impression their clients aren’t interested.
We know that advised investors are much less likely to hold digital assets, yet are very interested in investing in them.
Andrew McPhee, Financial Services Industry Lead at Swyftx “My belief is that older investors are at least partially less likely to invest in digital assets due to them having a much higher chance of being in an advised relationship.”
According to McPhee, the time has come for Aussie financial advisers to shift from a “should we engage,” mindset around crypto to a “how will we engage,” mindset.
The question is no longer when digital assets will become mainstream – it is who will move first to give their clients what they want.
Andrew McPhee, Financial Services Industry Lead at Swyftx Related: Bank of America Opens the Door to Crypto Allocations for Wealth Clients
Time for the Aussie Financial Advice Industry to Level-up on Crypto: McPhee
McPhee believes now is the time for Australian financial advisers to begin to level-up their approach to digital assets, developing a more nuanced and informed strategy around crypto recommendations.
“You don’t need to recommend bitcoin today. But education must come first, across advisers, investment committees, and compliance teams,” he explained.
If the internal position is still binary or dismissive, the gap between client expectations and adviser readiness will continue to widen.
Andrew McPhee, Financial Services Industry Lead at Swyftx McPhee said client access to crypto through professional financial advisers should be standardised across the industry, explaining that “ad-hoc exceptions are where advice risk lives.”
“Standardised, compliant access with full transparency is how new asset classes are integrated without breaking advice models.”
Related: Crypto Overtakes Property: Australians Swap Bricks for Bitcoin
McPhee said that while each financial advice business’s approach to crypto is ultimately its own decision, he encourages all financial advisers to get educated on digital assets rather than rely on outdated misconceptions.
Just make sure you are making an informed decision, not one anchored in fear, laziness or misconceptions. You owe your clients that.
Andrew McPhee, Financial Services Industry Lead at Swyftx Australia,Cryptocurrency#Australian #Advisers #Face #Growing #Pressure #Crypto #Demand #Outpaces #Advice1768383933
