Young people and crypto financial planning


Article by Christina

The FT Adviser (14/11/22) published a good article by Schroders which looked at the reasons why young people are attracted by crypto financial planning. Despite the failure of big market players like FTX the supposed $34 billion crypto broker which collapsed last week affecting over one million customers.

So, what do young people say about why they are interested in crypto financial planning? Comments include:

  • Everyone is doing it so why not
  • It’s easy to do
  • You can get rich quick
  • You don’t need advice.

All these reasons point to why the FCA is so concerned about the unregulated nature of cryptocurrencies. But why are young people so attracted to it? It’s probably down to their demographics. Research found that:

  • Most have student debts of over £40,000.
  • Two thirds of under 35’s still live with their parents – or rent their homes.
  • Almost 50% of under 35’s say they are stressed about their financial situation.

It’s difficult to reach these younger people because of these attitudes and circumstances. But they do need help. It is estimated that over £5 trillion in assets will be transferred from their parents. But over 60% says they wouldn’t use their parents’ advisers. Having said that, they probably won’t be around anyway. Latest research showed that 75% of financial advisers were over the age of 40 and only 8% were under 30.

It would be criminal if this immense wealth transfer fell victim to online and cryptocurrency scams.

This is one of the reasons why the government is now looking specifically about how it can intervene in this market. The Bank of England has now said that it believes that regulation of crypto financial planning is required. Even though it would be difficult and potentially costly to manage such a volatile sector. The Bank believes that regulation is required before the crypto market gets so big that it could impact on mainstream financial markets.

There are also concerns about younger people moving away from traditional sources of credit, like banks and moving to more flexible arrangements like Buy Now Pay later schemes. Despite these often being more expensive.

Banks, however, don’t always do themselves any favours. Recent reports show that the number of complaints to the Financial Ombudsman Service (FOS) about suspended bank accounts , is on the increase. Although still relatively uncommon, banks have the right to suspend customer accounts without giving any reason. Some of these suspensions have increased through and after the pandemic because of increasing suspicions about fraud.


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