• The Certified Financial Planner (CFP) Board released a 14-page “Notice to CFP Professionals Regarding Financial Advice about Cryptocurrency-related Assets” in Dec. 5.
• The report outlines a series of risks associated with cryptocurrency investment and provides standards for financial advisors to adhere to when making decisions about providing, or not providing, advice on cryptocurrency investment.
• The CFP Board’s Code and Standards does not require a CFP professional to offer Financial Advice to a Client on every Financial Asset that is available in the marketplace.

The Certified Financial Planner (CFP) Board recently released a 14-page “Notice to CFP Professionals Regarding Financial Advice about Cryptocurrency-related Assets” on December 5th, 2021. The report serves as a cautionary tale to financial advisors on the risks associated with cryptocurrency investment and provides guidance on how to make decisions on providing, or not providing, advice on the matter.

The report highlights the importance of adhering to Fiduciary Duty when providing advice on crypto. This means that financial advisors must fully take into account the goals, risk tolerances and personal/financial circumstances of the client when offering advice. Beyond this, the report also emphasizes the standards of competency necessary to provide cryptocurrency-related advice.

The CFP Board’s Code and Standards does not require a CFP professional to offer Financial Advice to a Client on every Financial Asset that is available in the marketplace. However, it is important for advisors to be mindful and educated on the risks of cryptocurrency investment. Advisors must be able to assess the various risk factors associated with cryptocurrencies and be aware of the potential legal and regulatory challenges.

The report issued by the CFP Board is a reminder that financial advisors must exercise due diligence when it comes to cryptocurrency advice. It is important for advisors to evaluate the risks of investment and consider whether the advice they are providing is in the best interest of the client. In addition, advisors should be aware of the potential legal and regulatory challenges associated with cryptocurrency investments.

By being mindful of these risks and providing sound advice, financial advisors can better serve their clients and provide them with the best possible advice when it comes to investing in cryptocurrency.

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