Cryptocurrency Advice: CFP Board, CFA Institute, Finra & SEC Guidance

Bullet Points

• The Certified Financial Planner Board of Standards (CFP Board) and the Chartered Financial Analyst Institute (CFA Institute) have issued guidelines and notices to advisors regarding financial advice about cryptocurrency-related assets.
• The CFP Board issued guidelines in November in a “Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets” to ensure compliance with best practices.
• Finra and the Securities and Exchange Commission have also issued guidance regarding cryptocurrencies and advice.

Cryptocurrencies have become increasingly popular in recent years, as investors see them as a potential opportunity to diversify their portfolios and increase their returns. With this popularity comes the need for financial advisors to understand the nuances of cryptocurrencies and to provide sound advice to their clients. To ensure that advisors are up-to-date on the latest developments in the crypto world and to provide guidance on best practices for investing and advice, the Certified Financial Planner Board of Standards (CFP Board) and the Chartered Financial Analyst Institute (CFA Institute) have both issued notices and guidelines.

The CFP Board issued guidelines in November 2020 in a “Notice to CFP Professionals Regarding Financial Advice About Cryptocurrency-Related Assets”. This notice provides guidance to CFP professionals on providing financial advice about investing in cryptocurrencies, and it outlines the different legal and regulatory requirements for providing such advice. It also covers topics such as disclosure, suitability, and the proper use of blockchain technologies. The CFP Board emphasizes that CFP professionals must comply with all applicable laws and regulations when providing advice regarding cryptocurrency-related assets.

The CFA Institute has also recently launched a new program to provide guidance to its members on cryptocurrency investing and advice. The CFA Society Crypto Council has been established to provide “a single, unified resource” for cryptocurrency-related topics. The Council works to provide a platform for education, research, and advocacy on cryptocurrency-related issues, as well as to facilitate dialogue among CFA Institute members and other stakeholders.

In addition to the CFP Board and the CFA Institute, Finra and the Securities and Exchange Commission (SEC) have also provided guidance regarding cryptocurrencies and advice. Finra recently issued a statement on the sale of digital assets, and the SEC has issued several statements and guidance documents on cryptocurrencies, including its recent guidance on Initial Coin Offerings.

In conclusion, the CFP Board, CFA Institute, Finra, and the SEC have all issued notices and guidance regarding cryptocurrencies and advice. This guidance is meant to provide financial professionals with the information and resources they need to provide sound advice to their clients about cryptocurrency investments. As the cryptocurrency markets become more developed and the regulatory landscape continues to evolve, financial advisors should stay up-to-date on the latest developments in order to ensure that they are providing the best advice to their clients.

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