Global Financial Planning Standards Board Advises on Crypto Regulation

The Financial Planning Standards Board (FPSB), the global body that issues the Certified Financial Planner designation has shared its take on the need to broaden crypto regulations across the board in a bid to protect investors. 

According to the FPSB whose response was based on an earlier consultation from IOSCO, there have been potential adverse impacts of the rise of complex financial products, technology innovation, and social media / fin-fluencers that must be addressed.

The FPSB’s Advice

According to the series of advice published by the FPSB, social media influencers that give financial advice should be given a certain level of certification to carry out their role. 

In today’s digital currency ecosystem, it is not uncommon to find social media influencers shill a particular coin or token. Based on their popularity, they usually gain a lot of following when indeed the product they advertise may just be based on ordinary hype.

The FPSB said there should be a public register containing the list of approved or certified influencers that are qualified to give financial advice in the crypto industry.

“Financial fraud and scams are certainly not new, but the rapid emergence and evolution of crypto assets and other complex digital assets means the level of risk and exposure for retail investors is becoming heightened,” said FPSB Head of Stakeholder Engagement Dante De Gori, CFP. “Licensing and product regulation are struggling to keep up with this fast-changing landscape, leaving financial planners unsure of their regulatory obligations and leaving retail investors to go it alone, guided by marketing campaigns, often with harmful consequences.”

In addition, the FPSB advised that IOSCO members should prohibit the use of credit cards to purchase complex financial products and that IOSCO should conduct research to determine the status of individual investors to know whether they are self-directed or professionally guided.

The clamor for regulatory oversight in the digital currency ecosystem is growing at a very fast pace, and the advice from the FPSB is poised to bolster this motivation.