Asian Wealth Managers Shun Crypto Despite Rising Demand

Asian wealth managers are keeping away from offering digital asset products despite surging demand, a recent survey shows.

Regulatory uncertainty and high volatility in digital assets has kept a majority of wealth managers in Asia away from digital assets, a report by consulting firm Accenture showed on Monday. 67% of wealth management firms in the region have no plans to offer digital assets.

The firm conducted two surveys, covering about 3,200 investors and over 550 financial advisors between December 2021 and January 2022.

Wealth firms expect 60% jump by 2025

According to Accenture, wealth managers are targeting 60% growth in their portfolios by 2025- something that they believe crypto cannot offer at the moment.

More than 52% of Asian investors hold digital assets like crypto or crypto investment funds, while  21% will be investing in it by the end of 2022. Several wealth managers have also faced growing calls from investors to offer products covering the space.

But even with crypto being the  5th largest asset class in Asia, wealth management firms are still hesitant to approach the space.

Crypto regulation is lacking in most Asian economies, with majors such as China outright banning the space. Others, including India and Singapore, have taken a more cautious approach to the space, with the former introducing a damaging tax regime to dissuade crypto trading.

High volatility in crypto this year has also made trading extremely unappealing, with the space seeing a deluge of capital outflows.

Majority of investors make their own investment decision

As per a report by Accenture, 40% of the investors are keen to obtain advisory services from the wealth firms than opting self directed approach. While 33% of the surveyed investors take investment decisions themselves and utilise firms to carry out trades.

The recorded behavior implies that more monetary advice from the wealth firms can lead the investors to move assets with them. This will directly influence them to opt for the advice provided by the wealth manager.

Meanwhile, 46% of the investors reported being satisfied with their primary wealth manager. However, over 90% mentioned that their investment expectations were met over the last year. The crypto market has seen increased volatility in the past year. The survey finding suggests that giving expected returns will be more challenging than offering advice to the investors.