More than 90 per cent of IFAs would not suggest crypto to clients

Over 90 per cent of Independent Financial Advisors (IFAs) in the UK would not recommend crypto investments to clients.

Following the recent crypto crash that saw prices of major cryptocurrencies plunge, 93 per cent of IFAs say they would not advise clients to invest in crypto, research by strategic insight firm Opinium found.

The “crypto winter” has hit investor confidence, with 65 per cent of IFAs saying their clients had lost money on crypto and 71 per cent saying their clients had changed their minds about investing in crypto after initially planning to.

Over half of the IFAs had clients who were worried about their crypto investments, while 13 per cent of clients seeking advice had contacted IFAs after losing their investments. A third of clients had sold their crypto investments and refused to invest again.

“Given the recent crypto crash and the volatility of the market more generally, it is no surprise that IFAs are encountering clients who have either already given up on crypto investment or are concerned about their current position,” said Alexa Nightingale, Head of Financial Services research at Opinium.

Bitcoin, Ether, and Dogecoin were top three cryptocurrencies that clients had lost money in, sold their investments, or were concerned about their holdings.

76 per cent of IFAs said they would not personally invest in crypto, with just a third saying crypto prices would climb back after plummeting in the crash. 

The crypto rout this year caused widespread losses across the industry, bringing down the crypto market cap from $3 trillion (£2.5 trillion) last year to about $1 trillion (£0.8 trillion). Bitcoin, the most popular cryptocurrency, is down almost 50 per cent for the year. 

“It’s clear that financial advisers need to continue communicating with clients, to help them navigate the unpredictability of the crypto market and try to ease their financial concerns where possible,” Nightingale added.