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Money Marketing: "Enormous potential" exists for the wealth management sector to enter the cryptocurrency space


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    The majority of UK investors would start investing in digital assets if traditional financial providers offered crypto asset services.

    Research from Avaloq, a digital banking solutions and wealth management technology firm, said the fact that 86% of mass affluent to high-net-worth individuals would turn to crypto means the wealth management sector has “enormous potential” to enter this sector.

    Presently, 77% of crypto investors buy and sell crypto through an exchange, and only 38% invest via their wealth manager.

    Additionally, 29% of UK investors now hold crypto assets, which is an increase from 22% in 2022.

    Those in the UK who have not invested in crypto said the main reason why was concern about volatility (35%), a lack of trust in crypto exchanges (31%) and not knowing where to start (28%).

    The Avaloq report said: “Wealth managers have a great opportunity to address these concerns and offer trusted advice and reassurance for those who are looking to venture into the world of crypto assets but lack the knowledge and confidence in crypto exchanges to invest due to market instability.”

    Avaloq head of digital assets product domain Dr Nils Bulling added: “Our research reveals an enormous opportunity for wealth managers to enter a market where the expertise and brand heritage of traditional players will offer reassurance to investors.

    “In a rapidly evolving landscape, it is vital that wealth managers can adapt to clients’ requirements, including demand for crypto assets. In order to compete with challengers and exchanges, wealth managers need to invest in technology to seamlessly integrate this new investment class into traditional portfolios.”

    To obtain these results, in 2023, Avaloq conducted an online survey of 3,000 investors aged 18 and from Germany, Switzerland, the UK, Hong Kong, Japan and Singapore.

    Around 57% of respondents were mass-affluent (with investable assets of $250,000 to $1m) while 37% fell within the high net worth (HNW) segment and 6% within the UHNW bracket.

    Sources


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