Home 2022 A Fiduciary Duty Requires that the Advisor Act in the Best Interest of the Client

A Fiduciary Duty Requires that the Advisor Act in the Best Interest of the Client

by Paul Ebeling

#cryptocurrencies #digital #assets #brokers #retail #clients #bitcoin #ether #knights #frontrun #ivesting #investors #DAO


“Cryptocurrencies such have become more mainstream in the past few yrs, still many brokerages and financial advisors are not offering access to these digital assets to their retail clients” — Paul Ebeling

But we know this new asset class can be a good way to diversify a portfolio by holding a bit of crypto.

However, because of the legal and regulatory landscape that is still unclear around Bitcoin and the blockchain space, some big brokers are shying away from advising their retail clients to buy as they take positions for their houses, aka frontrunning.

Wells Fargo (NYSE:WFC) for instance has issued research primers on digital currencies, and it also lets its advisors present these documents to their clients. But, it stops there, not allowing advisors to make any recommendations on account of the complexity and volatility of the space.

The infrastructure for holding these assets is in the early stages, as is reporting on buying and selling and is claimed as an issue.

The lack of regulation has not stopped investors from inquiring with their advisors. This comes as many large institutions are also looking for ways to embrace Bitcoin. Fidelity Investments allows customers to post bitcoin as collateral for loans, while PayPal allows customers to buy and sell this digital asset.

An advisor’s fiduciary duty means they cannot act negligently, make unnecessary trades, or misrepresent a transaction. Other than that, many advisors have a lot of discretion about what is and is not in the best interest of their clients. 

That said, some advisors are embracing crypto for more risk-tolerant clients. A Bitwise Asset Management and ETF Trends survey from 2020 found that 6% of advisors were allocating a portion of assets to cryptocurrency.

The majority of those investing in digital assets are doing so for the high potential returns, the survey found.

With that, advisors may consider at least educating clients about cryptocurrency and the safer ways of investing in the asset. Questions about crypto will arise, and being educated on how to access it and the risks could be useful for advisors as they guide clients.

That being the case we at Knightsbridge entered the sector a few yrs ago and are well established, and are preparing to dominate the DAO market with our services. 

Link for Knights DAO https://knights.app/the-knightsbridge-dao/ 

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Have a prosperous day, Keep the Faith!

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