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Why and How Advisors Should Prepare to Talk Crypto with Clients

January 5, 2021



With clients increasingly asking questions about cryptocurrencies, advisors cannot ignore the topic and must prepare themselves to respond to common queries, industry experts say.

Foreside’s Douglas Kamin, Managing Director, spoke with Financial Advisor IQ and shared that we have seen the SEC targeting exams of advisors that manage or recommend digital assets to clients (including cryptocurrencies).  It’s not just the fiduciary obligation that advisors need to keep in mind prior to making a crypto recommendation, Kamin says. Advisors must also consider other Investment Adviser Act rules, including those in areas such as valuation, fees, custody, and vendor due diligence.

RIAs also need to keep in mind that the SEC considers most ICOs [initial coin offerings] to be classified as a security, which typically means ICOs are required to be registered with the SEC unless they fall under an exemption from registration,” says Kamin.

Even if advisors don’t want to recommend cryptocurrency investments, learn more about why they should still be prepared to have the conversations here.






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