ASIC expresses concern as crypto investment runs second to Aussie equities
The Australian Securities and Investments Commission (ASIC) has expressed concern at the fact that a survey of retail investors has revealed 44% are holding crypto-currency making it the most common product type after Australian equities (74%).
Releasing the research today, ASIC chair, Joe Longo said the regulator was concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products.
“This research does highlight during this particular point in time, the appeal of crypto-assets to the market,” he said.
Further, Longo pointed out that the survey had revealed that only 20% of cryptocurrency owner considered their investment approach to be ‘risk taking’ “raising concerns that investors did not understand the risks of this asset class”.
The research surveyed 1,053 Australian retail investors aged 18 and over who had directly traded in securities, derivatives or cryptocurrencies at least once since March 2020. Conducted in November 2021, the survey results provide a point-in-time snapshot of investor behaviour during a period of increased activity in retail markets, supplementing existing market data and research conducted in Australia and overseas.
In my view this is a nonsense product and there are plenty of scammers active.
When the “greed” frenzy for “tuplips” dies down a lot of people will be bitterly disappointed.
Maybe ASIC should realise it’s destruction of access via MASS BS OVER REGULATIOPN & RUBBISH COMPLIANCE have stopped many people being able to afford to get Real Advice from Real Human Adviser’s.
I’m sure Ms Robo Finfluencer Hume is very happy with this result. People should call her when they go broke and get scammed.
ASIC, Hume, O’Dwyer & Frydenberg should be held accountable for these moronic results and lack of affordable access to Real Human Advisers.
What a disgraceful performance from Regulators and LNP.
Just another example of ASIC failing consumers. They should have ignored Robo Hume and taken the flogging of a complex and risky investment more seriously. Advisers have been very vocal on what would happen if this remained unchecked, and guess what it did happen. ASIC just keeps proving they aren’t up to the job.
There are many reasons for active investors to delve into crypto assets.
“Free” business models promoted activity over investment, contributing to a higher speculative component in retail investor activity. This is a failure of regulatory supervision/market education, because free business models are based on a level of trading activity that is the antithesis of genuine long-term investment.
Lack of legislative and regulatory oversight and direction created a “Wild West” financial environment in what anything that was not specifically illegal was worth a go. There is zero point telling people to be careful when investing into an area that is inherently risky, and when there is no single, authoritative venue for reducing that risk.
“Marketing” by various crypto products descending to pure flogging and scamming, with little regard to disclosure of fees, processes, risks or even what on earth was being promoted. Breaking up Bitcoin’s huge coin cost into saleable bite-sized chunks created the equivalent of “penny stocks” which is an ambrosia that lures the most avid of pump-and-dump / rug-pulls crooks. And it certainly did. At one point there it was almost impossible to avoid the product floggers. The inability to declare these software code packets “financial products” is a complete failure of legislative and regulatory oversight. It is a failure of a mandate for a stable and efficient marketplace.
Financial planners may have been able to provide some sort of help here. But we were handcuffed by legislation that severely limits our ability to provide cost-effective, efficient advice at the Mainstreet price level. Not just for crypto assets, but for the alternative traditional assets that could have been held as a reasonable alternative. Instead, we planners had to step aside and let the criminals and shysters run riot.
There is little point bemoaning the outcome, when so little was done to stop it from happening in the first place.
Financial advisers have been predicting the rise in unregulated advice for a long time. However it fell on deaf ears.
When you make regulated advice unobtainable to the general public they become more vulnerable to scams and dodgy investments.
The failure here is the public will pay. Through more people failing to obtain financial independence and therefore needing social welfare to bail them out of their bad financial decisions.
If only there was a profession that helped financially educate the public.
Prior to over-regulation, financial advisory was a social contract. Advisers took on all clients and most gave commensurate service with fees received. Low fee clients still got access to quality advisers, but the service was more limited.
Now, we have quite high minimum fees due to the regulators view of what must be done to receive any fee. So low fee clients are directed to the internet to figure it out for themselves. Their low fees aren’t worth my regulatory risk.
ASIC have made the provision of advice to “normal” people, particularly those with limited assets impossible to provide without generating a loss. In addition they have ignored Crypto Currency and the reasonable amount of scams which have happened in this area for years. Now they have “expressed concern”. Too little too late by an organisation that is at best incompetent.