UK wealth advisors face crypto oversight gap as firm restrictions curb client management

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UK wealth advisors crypto gap

Highlights

52% of UK advisors report more than half their clients’ digital asset exposure is outside their oversight, versus one in four across Europe.
61% of advisors work at firms that restrict or lack clear policy on digital assets, making them 8.5 times likelier to report unmanaged exposure than those with supportive policies.
Regulatory changes, including MiCA from July 1 and potential FCA crypto ETP allowances, are expected to reshape advisor oversight, with UK clients showing the strongest self-investing trend at 14%.

Survey findings highlight policy-driven gap

As reported by CoinShares, a survey of 261 wealth management professionals across France, Germany, Italy, Switzerland and the UK finds that 52% of UK advisors say more than half of their clients' digital asset exposure sits outside their oversight. Across Europe, one in four advisors reports a management gap above 50%, a measure CoinShares uses for crypto holdings kept on personal exchange accounts or self-custody platforms rather than under advisor supervision.

The study says the problem is institutional rather than rooted in weak demand or poor adviser knowledge. Some 61% of advisors work at firms that either explicitly restrict digital assets or provide no clear internal guidance, and those advisors are 8.5 times more likely to report unmanaged client exposure than peers at firms with internal support.

Recommendation activity also varies sharply by firm stance. Active recommendation rates stand at 1% in restricted firms, versus 48% in firms with clear support, while the management gap rises to 34% in blocked firms compared with 4% in supported ones.

CoinShares co-founder and CEO Jean-Marie Mognetti says the issue is becoming a wrong-way risk for firms as client assets migrate beyond advisory visibility. The same divide appears in adviser preparedness, with more than three-quarters of respondents who say they are insufficiently informed to advise on digital assets working in blocked firms, where training was not put in place.

Regulatory shifts may reshape advisory models

Client demand is still surfacing despite those restrictions. Some 8% of all advisors surveyed report rising client interest alongside a management gap above 50%, while in the UK that self-investing signal reaches 14%, the highest level in the dataset and nearly double the European average.

Advisors indicate that structural market changes, rather than education alone, are more likely to close the gap. Regulatory recognition of digital assets as a mainstream asset class ranks first at 45% among confidence catalysts, followed by access to exchange-traded products at 43%, while client-facing educational tools rank joint last at 9%.

CoinShares says the European market is entering a narrow window in which both conditions are starting to emerge. The MiCA transition closes on July 1, creating a single regulated European market, while in the UK the Financial Conduct Authority has proposed allowing authorized funds to hold up to 10% in crypto ETPs, and France's AMF is reviewing which assets may qualify for UCITS funds.

Italy stands out as the clearest contrast in the survey. With a permissive retail distribution model and frequent direct contact between advisors and clients, it records the lowest management gap at 12%, suggesting client demand is being converted into managed exposure before it shifts into self-directed activity.

Our earlier coverage of the UK’s planned overhaul of the tax-free ISA system outlined proposals to push more savings from cash into investments, including a £12,000 annual cash ISA cap for under-65s from 2027 and tighter rules around cash held in stocks-and-shares ISAs. We also noted the government’s consultation on replacing the Lifetime ISA with a new First Time Buyer ISA, with key details such as bonus rates and property price caps still under review—highlighting how policy shifts can materially change consumer behaviour and advice needs.

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