Recent warnings, guidelines and recommendations regarding cryptocurrency investment and advice have been issued by the Certified Financial Planner Board of Standards and the Chartered Financial Analyst Institute.
* The CFP Board issued guidelines in November in a „Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets“, which will govern how holders of the CFP certification provide advice about cryptocurrencies.
* CFA Institute also published a guideline paper that provides best practices to advisors for providing cryptocurrency advice.
In recent years cryptocurrency investment has grown in popularity. With it has come the demand for qualified financial advisors that can offer sound advice on digital assets. Two of the largest industry associations, the Certified Financial Planner Board of Standards and the Chartered Financial Analyst Institute, have issued recent warnings and guidance regarding cryptocurrency investing.
In November of 2020, the CFP Board issued a „Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets“, which outlines the expectations and requirements for holders of the CFP certification when providing advice about cryptocurrencies. CFP practitioners must understand the potential risks of cryptocurrency investment. They also need to be familiar with the market and markets where the asset trades. CFP practitioners who offer advice on digital assets should be knowledgeable about the various types of cryptocurrency, their technology, as well as the markets and regulatory environments in which they are traded.
CFA Institute also published a guideline paper that provides best practices to advisors in providing cryptocurrency advice. This paper stresses that advisors must be aware of the potential risks involved in digital assets and also the importance for investors to understand how to assess these risks. Advisors must be aware of cryptocurrency regulations and prepared to follow them.
CFP Board’s and CFA Institutes recent statements remind advisors to be diligent about their cryptocurrency market research and understand the risks. Advisors can only then provide solid advice and assist clients in making informed investments decisions.