Are K2 members able to add or change their avatars from the front end? I am unable to see an option for the action.

I am not using K2 for user registration so new members will not have a K2 avatar unless uploaded by an administrator, which also doesn't seem to work on my site.

Any feedback?

Do you have the K2-User plugin enabled? That is the one responsible for extending the registration form with the extra fields.
When you try to upload the avatar from the backend do you get any error messages or you just do not see the avatars uploaded in the frontend?