Digital assets such as cryptocurrencies are already among the five most popular asset classes for investors in Asia, a report has found.
Affluent investors in Asia allocate an average of 7% of their portfolio to digital assets, more than foreign exchange, commodities or collectibles, the Accenture report said.
“While younger investors are more exposed to cryptocurrencies, stablecoins, crypto funds, security tokens and asset-backed tokens, the trend is largely consistent across markets, wealth bands and genders,” researchers said.
The Accenture report said investment in digital assets “are likely to become far more popular”.
Currently, 52% of affluent investors in Asia hold digital assets of some sort. Accenture’s research indicates this could reach 73% by the end of 2022.
The researchers said wealth management firms were not doing enough to promote crypto or attract customers to the asset class.
“Accenture’s research reveals that two-thirds of wealth management firms in Asia have no plans to offer any form of digital asset proposition,” the report noted. “Most of those that do are targeting [only] the relatively small $7 billion custody element.”
Crypto and similar assets are a $54 billion revenue opportunity “that most are ignoring”, the report said, adding that transaction fees alone were worth $40 billion, with the rest shared equally between advisory fees and custody fees.
This lack of engagement by wealth management firms means many investors are seeking advice about digital assets on unregulated forums, including peer-to-peer advice on social media, Accenture said.
“Among firms’ barriers to action are a lack of belief, a wait-and-see mindset, and — given that launching a digital assets proposition is operationally complex—choosing to prioritise other initiatives.”
- George Russell