UK wealth managers have enormous potential to offer crypto services following recent market turmoil, says Avaloq
There is massive potential for wealth managers to offer crypto investing, according to new research from Avaloq, a global leader in digital banking solutions and wealth management technology.
Avaloq’s survey found that 89 per cent of UK investors who either don’t own crypto or who currently invest via an exchange would seek to invest in crypto with their financial provider if they had the option to do so. Underscoring this opportunity gap for traditional financial institutions, 79 per cent of crypto investors buy and sell through an exchange, with less than a quarter (24 per cent) investing via their traditional bank or wealth manager.
The potential for wealth managers to leverage their expertise and inspire investor confidence is highlighted by Avaloq’s finding that 25 per cent of investors don’t invest in crypto due to a lack of trust in crypto exchanges. The most cited reason for not investing in crypto, identified by a third of respondents (33 per cent), is that investors are unsure about how to enter the crypto market, closely followed by 31 per cent who believe the market is too volatile.
Likewise, uncertainty about how to get started was also the most common reason, cited by 41 per cent of investors, for not investing in non-fungible tokens (NFTs). This shows that wealth managers should also consider expanding their services to digital assets beyond cryptocurrencies and begin offering their clients advice as well as accessible options for investing in NFTs such as fine art or property.
By providing trusted advice and tailored crypto solutions, banks and wealth managers can help broaden access to this new investment universe and help create a more diversified digital asset marketplace.
Nils Bulling, Head of Strategic Innovation, Ecosystem and Digital Assets at Avaloq, says:
“These findings highlight the immense potential for wealth managers to integrate digital assets into their offering to act as the bridge between centralized and decentralized finance. Especially as digital assets become more easily tradeable – both in the real world and in the metaverse.
“In the future, a digital assets offering will become increasingly important to remaining competitive, as many investors across all wealth segments will expect their financial provider to offer a one-stop-shop for advisory, investment and custodian services for both fiat and digital assets. Wealth managers must familiarize themselves with the technology and services currently available on the market to seamlessly incorporate digital assets into their portfolios.”