Insights

Looking for crypto investing advice? Why your financial adviser’s lips may be sealed

Regulations appear to be lagging the rapid pace of cryptocurrency adoption.
The post Looking for crypto investing advice? Why your financial adviser’s lips may be sealed appeared first on The Motley Fool Australia. –

Looking for crypto investing advice?

You’re not alone.

With Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) both breaking into new all-time highs in recent days, investor interest in cryptocurrencies is booming.

And if rocketing prices weren’t enough, last week saw the launch of the first ASX listed crypto-related exchange-traded fund (ETF).

The BetaShares Crypto Innovators ETF (ASX: CRYP) kicked off on the ASX last Thursday. Rather than investing directly in Bitcoin, Ether or other altcoins, the ETF offers investors exposure to a range of crypto mining and blockchain-related companies.

By the end of its first day of trading, the crypto ETF notched up net buys of $39.7 million, breaking all the records for an ETF on its first day of trade. (Details here.)

CommBank enables customer crypto services

Last week also saw Commonwealth Bank of Australia (ASX: CBA) become the first Aussie bank to offer crypto services to its customers. Aside from Bitcoin and Ethereum, CommBank reported its customers will be able to buy, sell and hold up to 10 selected cryptos, including Bitcoin Cash (CRYPTO: BCH) and Litecoin (CRYPTO: LTC).

But don’t go asking CBA’s certified financial advisers which tokens have the better outlook.

In fact, as The Australian reported, you likely won’t get that advice from any of Australia’s 20,000 qualified advisers.

Their lips are sealed by red tape

It looks like this is a situation where slow-moving government regulations can’t keep up with the rapid pace of crypto adoption.

As it stands, Australia’s small army of financial advisers aren’t allowed to offer any advice on crypto at all. Rather ironically, people outside of certified financial advisers can offer most any kind of personal insights into cryptos they see fit across a range of social media.

Part of the problem lies with advisers’ professional indemnity insurance.

A recently renewed financial adviser professional indemnity insurance contract, as reported by The Australian, stipulates:

The policy is extended (to include) virtual currency exclusion arising directly or indirectly from or in any way connected with cryptocurrency, alternative cryptocurrency, digital currency, or any other form of virtual currency.

Now advisers might be able to advise so-called “sophisticated investors” on their virtual currency investing plans. Which is also rather ironic as these high experience, high wealth investors are likely in less need of exactly this type of advice than mum and dad investors.

Commenting on the situation, financial adviser James Gerrard said, “We have a very odd situation now that I can’t, under the terms of licence or insurance, advise on something from CBA.”

Dante De Gori, CEO of the Financial Planning Association, added, “The current restrictions are going to have to change. First, we have to get advisers qualified in the topic, then we have to get licence issues sorted out and crucially we are going to have to get the insurers to come on board.”

Until the red tape is sorted, however, crypto investors would do well to do their own thorough research. And never invest more than they can afford to lose.

The post Looking for crypto investing advice? Why your financial adviser’s lips may be sealed appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Why Bitcoin hit all-time highs on Tuesday

The total value of crypto just surpassed US$3 trillion, what’s next?

Why Dogecoin, Shiba Inu and Bitcoin investors should ‘follow’ Elon Musk

Here’s why the Betashares Crypto Innovators ETF (ASX:CRYP) share price is surging 7% today

Big pay rises on the cards? And what about Bitcoin? Scott Phillips on Weekend Sunrise

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!