Survey Highlights Major Visibility Gap in UK Wealth Management

A recent survey of 261 wealth management professionals across Europe reveals a significant disconnect in how traditional advisors handle client cryptocurrency holdings. In the UK, 52% of advisors indicated that more than half of their clients' digital asset exposure sits beyond their professional management. This figure stands at 25% across the broader European sample including France, Germany, Italy, and Switzerland.

The "management gap" refers to crypto holdings kept on personal exchanges or in self-custody wallets that advisors cannot monitor or incorporate into their overall portfolio advice. This situation leaves substantial portions of client wealth outside the structured oversight typically provided by wealth management firms.

Firm Policies Identified as Primary Barrier

The data points clearly to institutional policies as the main driver behind the visibility issues. Advisors in firms that restrict digital assets or lack internal guidelines face far higher rates of unmanaged client exposure. CoinShares described this as a "firm-policy problem" that creates what they term "wrong-way risk."

He emphasized that client capital has already moved into crypto, but advisors entrusted with managing wealth often cannot see these positions due to internal constraints.

Knowledge levels among advisors also align with firm policy. More than three-quarters of those who consider themselves insufficiently informed about digital assets work in firms with restrictive or unclear stances. This indicates that training and expertise follow organizational direction rather than preceding it.

Client Interest and Self-Directed Activity

Despite the oversight challenges, client demand for crypto remains evident. In the UK, 14% of advisors noted rising client interest paired with high management gaps, nearly double the European average. This suggests clients are increasingly handling their digital asset investments independently when advisory channels fall short.

The survey underscores that the issue stems from structural barriers rather than weak client appetite. Advisors report that clients continue to allocate to crypto, but firm-level restrictions limit integration into managed portfolios.

What Advisors Say Would Build Confidence

When asked about factors that would increase their readiness to advise on digital assets, respondents prioritized systemic changes. Regulatory recognition of crypto as a mainstream asset class topped the list at 45%, followed closely by access to exchange-traded products at 43%. Client-facing educational tools ranked near the bottom at just 9%.

Regulatory Developments in UK and Europe

The findings come amid evolving regulatory frameworks. In the UK, the Financial Conduct Authority has proposed allowing authorized investment funds to hold up to 10% in crypto exchange-traded products. This follows earlier steps to reopen retail access to certain crypto instruments.

Across Europe, the Markets in Crypto-Assets (MiCA) framework approaches full implementation, aiming to create a unified regulated market. France's AMF is reviewing assets suitable for UCITS funds, while Italy demonstrates lower management gaps at 12%, attributed to its advisor-led retail distribution model that facilitates direct engagement.

These developments suggest potential pathways for greater integration of digital assets into traditional wealth management, though firm-level adoption remains uneven.

Implications for Wealth Management Industry

The survey highlights risks for firms that delay addressing these gaps. As wealth transfers accelerate in the coming years, clients with significant crypto exposure may seek advisors who can provide comprehensive oversight. Incomplete visibility limits risk management, portfolio construction, and overall client service quality.

CoinShares noted that every period of firm inaction allows more client wealth to move outside advisory relationships, affecting both visibility and business economics. The contrast between UK figures and Italy's lower gap points to the role of engagement models and policy support in converting demand into managed exposure.