Half of UK advisers cannot see clients’ crypto holdings

A CoinShares survey of 261 European wealth management professionals, released Thursday, found 52% of UK-based advisers reported that most of their clients’ cryptocurrency holdings are outside their oversight. Across other surveyed European countries, including France, Germany, Italy and Switzerland, the figure was 25%.

The poll asked advisers about firm policies and how firms handle client digital assets. It found 61% of respondents worked at companies that either explicitly restrict dealings in digital assets or provide no clear internal guidance.

Respondents said many clients hold crypto directly on exchanges or in private wallets, places advisers are often not permitted to monitor or manage. That separation means advisers may not account for clients’ full allocations when giving guidance or managing portfolios.

Jean-Marie Mognetti, CoinShares’ co-founder and CEO, described the problem as stemming from firm policy rather than client reluctance or lack of demand. He said, ‘The capital has already been allocated. 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 findings follow a December report from the UK Financial Conduct Authority that about 8% of UK adults had invested in crypto. The regulator has proposed allowing authorised investment funds to hold up to a 10% allocation in cryptocurrency exchange-traded notes.

CoinShares said its results point to a gap between where clients choose to hold digital assets and where advisers are allowed to oversee them. The firm identified internal rules and a lack of procedures for overseeing crypto as key reasons advisers lack visibility into client positions.

The survey covered advisers working in several European markets. The release did not provide a breakdown of how many respondents were based in the UK or a margin of error.

CoinShares said changes in firm rules or regulatory policy would affect whether advisers can bring client crypto exposure under oversight. For now, the survey indicates many client digital assets sit outside the scope of a large number of wealth managers.