Investors seek crypto-native advisers for tax guidance
CoreData has shared the top areas of demand for cryptocurrency advice as seven in 10 crypto investors say they would be interested in receiving advice.
A third of crypto investors say they are working with a financial adviser on this, according to CoreData, with the asset jumping from sixth to third in terms of most-held assets.
The research firm's whitepaper found 12 per cent were holding cryptocurrency, behind 19 per cent who hold cash and 21 per cent who hold Australian equities. The proportion of those holding cryptocurrency was higher than those holding ETFs at 10 per cent.
The median allocation was 20 per cent but those who worked with an adviser said they typically made a smaller allocation than this, especially for high-net-worth investors who were making incremental additions to the asset.
By contrast, many newer, self-directed investors encounter added crypto earlier in their investment journey, resulting in larger proportional allocations within less diversified portfolios.
Some 32 per cent of crypto investors said they engaged with an adviser and the majority of these said they had brought up this investment with their adviser themselves rather than it being suggested by the adviser.
A greater proportion of investors at 68 per cent said they did not receive advice but seven in 10 crypto investors would be interested in receiving crypto advice if it was available.
The top areas they would most like to receive advice on are tax strategies and regulatory compliance (59 per cent), portfolio allocation and diversification (55 per cent) and yield generation and passive income strategies (50 per cent).
A smaller percentage were interested in digital asset security (40 per cent) and how crypto could be used within estate planning (27 per cent).
But CoreData noted that when it comes to selecting an adviser, investors would prefer one who is already investing in crypto themselves. This is the case for 21 per cent of advisers who say they are investing in crypto in their personal life while a further 13 per cent say they are considering it.
For the remaining 58 per cent who are not yet using the asset, they could find themselves struggling to build a connection.
“As more investors add crypto to their wealth mix, advisers face increasing pressure to incorporate these assets into holistic financial strategies.
“Bridging this gap requires more than just an interest; advisers must be equipped to advise with confidence. This means understanding the role of crypto in a client’s portfolio, knowing how to manage and custody it safely, and having access to adequate professional indemnity insurance to protect consumers and professionals alike.”
“When selecting an adviser for crypto guidance, 43 per cent of crypto investors said risk management strategies are the top three areas an adviser should demonstrate competence in to earn their trust. Expertise in yield generation followed closely, cited by 41 per cent, while 36 per cent said advisers’ personal experience investing in crypto would help earn their approval.”
Earlier this week, BlackRock announced it will launch an Australian version of its existing US$85 billion US-listed iShares Bitcoin Trust, which was launched in January 2024.
AUTHOR
Laura Dew
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