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‘Read the tea leaves,’ brace for cryptocurrency regulation, advisers told
Despite cryptocurrency not being regulated as a financial product, the requisites of best interests duty still strictly apply as the regulators circle, advisers are being told.
As reported earlier this month, SMSF professionals are seeing a notable rise in interest and investment around cryptocurrencies, even with traditionally conservative clients.
Compliance consultants Assured Support are encouraging financial advisers to proceed with caution, and be particularly wary of their professional obligations when advising on cryptocurrency despite the loose regulatory framework around options like bitcoin and ethereum.
“If you’re an adviser who doesn’t want to recommend cryptocurrencies but your client comes and asks you to include them in the portfolio, then you have a best interests duty to address that,” Assured Support principal Sean Graham told sister publication ifa.
“There are some advisers saying they can recommend it because it’s not a financial product, well, it may be in some circumstances and if you read the tea leaves, it’s going to be more highly regulated in the future,” he added.
From a compliance perspective, cryptocurrency can be held in an SMSF, but there are a range of compliance considerations, which you can read more about here.
You can read more about the obligations for financial advisers when discussing cryptocurrency with clients here.
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