Securities and Exchange Commission Chairman Gary Gensler Monday morning outlined a number of shortcomings facing financial advisers' retail clients who are investing in cryptocurrency and digital assets, which have seen an explosion in interest from investors during the Covid-19 pandemic.
While broker-dealers aren't extremely active in selling digital assets, their clients are interested in the sector, noted Robert Cook, president and CEO of the Financial Industry Regulatory Authority Inc., who was speaking with Gensler in Washington at Finra's annual meeting. And clients are going to unregulated venues to get access to crypto products, Cook added.
Cook asked the SEC chairman about the SEC's goals or expectations when it comes to digital assets.
"This space, crypto markets, is a highly speculative asset class," Gensler said.
The investing public right now is not getting the disclosures they receive when buying other assets, he said. "We have this basic bargain. The investing public can make their choices about what risks they take, and with full and fair disclosure, and people aren't supposed to lie to you."
Another major issue for the crypto investing industry is that it works through only a handful of platforms, so the market is highly concentrated and centralized, Gensler said, raising the question of whether some trading venues could potentially trade against or even front-run their customers.
"It's about getting these handful of platforms to work with us" to ensure crypto markets are regulated, he said.
Custody of crypto assets also raises plenty of concerns for retail investors, Gensler added.
"There's a lot to be done here, and in the meantime the retail public is not that well-protected," he said. "We are going to continue to be the cop on the beat."
A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.
Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.
Some in the industry say that more UBS financial advisors this year will be heading for the exits.
The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.
Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
