Just 6 per cent of UK financial advisers agree that crypto has a role to play in investment portfolios, with 73 per cent disagreeing.
One in seven of the 266 respondents to CoreData Research’s study said advisers can no longer afford to ignore cryptocurrencies, however this drops to 11 per cent for advisers focused on mass affluent clients.
The main reason advisers cited for not recommending cryptocurrencies was due to the fact they do not fall under the regulatory scope of the FCA, with 83 per cent of advisers highlighting this.
IFAs’ clients remain interested in crypto, with 35 per cent of advisers saying they have seen increased interest among clients in the past 12 months.
This is not translating into growing adviser knowledge however, with a third of IFAs saying they do not understand cryptocurrencies.
“Cryptocurrencies are volatile and unpredictable and recent events underscore the potential perils of investing in the sector,” said Andrew Inwood, founder and principal at CoreData.
“These findings show that advisers are nervous and wary of cryptocurrencies and for good reason,” he said.
“Gaining a better understanding of cryptocurrencies and their risks will allow advisers to have more informed conversations with clients who are showing greater levels of interest in digital currencies.”