The investment management industry is entering a period of profound change. Investors have more choice than ever before, new distribution channels are emerging, and technologies such as tokenisation and artificial intelligence are creating opportunities to rethink how investment products are accessed and serviced.
Yet as the industry becomes more diverse, it also becomes more complex. The growth of ETFs, the widening availability of private markets and the emergence of digital assets all place new demands on the infrastructure connecting asset managers, distributors and investors. Innovation at the front end can only deliver its full potential if the systems and operating models behind it are able to keep pace.
This was a recurring theme at Calastone’s London Connect Forum on 8 October, where experts came together to explore the next horizon for investment management. Across discussions spanning investor behaviour, product innovation, tokenisation and AI, a central theme was how the industry could embrace new opportunities without adding unnecessary complexity to the investment ecosystem.
Expanding investment choice brings new distribution challenges
Changing investor expectations are influencing the development and distribution of investment products. As Edward Glyn, Head of Global Markets at Calastone, highlighted, younger generations are approaching investing differently, often starting earlier and using digital channels to access financial information and investment opportunities. Research suggests that Generation Z investors begin investing at an average age of 19, considerably earlier than previous generations.
This growing appetite for accessible and diversified investment opportunities is one factor driving interest in exchange-traded funds (ETFs), with more asset managers launching ETFs or converting existing mutual funds into ETFs.
According to ETFGI data, ETFs have now seen 87 months of consecutive inflows and are currently looking after a record $24 trillion, a 21.3% year-to-date increase in assets under management. [1]
“People have historically typecasted ETFs as being vanilla, passive-type investments, but they are very diverse. We continue to see demand for actively managed ETFs, options-based ETFs, thematic ETFs, single name leveraged ETFs, alternative ETFs, cryptocurrency ETFs and commodity-focused ETFs,” commented Paul Elflain, Head of Digital Sales & Relationship Management, Calastone.
Deborah Fuhr, Managing Partner and Founder of ETFGI, said a lot of this appetite for active ETFs is coming from younger investors, principally men, who started trading during the pandemic.
Elsewhere, European retail investors have historically been slower to adopt ETFs than their US counterparts, largely because of the weaker tax incentives, but uptake is steadily increasing as more regional neo-banks and platforms start offering direct access to ETFs.
However, Steve Palmer, Head of ETF Solutions, Royal London Asset Management (RLAM), flagged a number of UK platforms are still reluctant to offer ETFs, limiting investors’ access to innovative products. This reticence to distribute ETFs is often because many platforms remain heavily dependent on mutual funds and legacy technology infrastructure.
Other asset managers, eager to shore up their fundraising position beyond just institutions, are going live with more retail-orientated, semi-liquid funds, such as UK Long-Term Asset Funds or European Long Term Investment Funds.
As retailisation of illiquid asset classes accelerates, Jon Willis, Chair of Global Fund Services, said managers and their asset servicers will need to upgrade their capabilities, by jettisoning historic more manual solutions in favour of more scalable, digital, industrialised models that can handle higher volumes, often in real-time.
The role of asset servicers in supporting multi-asset class products and the industry’s increasingly diverse investor base was further underlined by Matt Temple, Senior Director, Solution Consultancy, Sales, SS&C. He said the industry’s priority must be to remove friction from the distribution process as much as possible, whilst also simplifying asset servicing, and ensuring interoperability across different product and asset class types.
Tokenisation will only succeed if the back-end is robust
Tokenisation is widely seen as an enabler for fundraising in both retail and wholesale markets.
Sharing a preview of Calastone’s latest research into the decentralised finance ecosystem, Simon Keefe, Head of Digital Assets at Calastone, said 91% of DeFi platforms already offering tokenised real-world assets expect their offerings to expand significantly within the next two years. The research also found that 87% of respondents expect tokenised money market funds (MMFs) to gain industry-wide momentum within the next 12 months.
More digital native investors, are looking to obtain safety, liquidity and intraday yield from their cash and stablecoin holdings, fuelling demand for tokenised MMFs. Sarah Abrahart, International Business Development Manager, RLAM, explained tokenised MMFs will also deliver extensive operational benefits, including instant or T+0 settlements and faster collateral mobility.
Regulatory developments are also helping to create the conditions for wider adoption. In April 2026, the Financial Conduct Authority (FCA) published PS26/7, Progressing Fund Tokenisation, setting out further rules and guidance for tokenised authorised funds.
Facilitating activities like fund tokenisation, but also 24/7 trading, stablecoin-enabled settlements, and even real-time reporting hinges on the back-end infrastructure , as well as the solutions offered by Transfer Agents (TAs) and fund administrators, being in good shape too.
“If you are operating in a digital distribution channel, investors will want information about a trade instantaneously, yet if the back office is operating on legacy technology and a piece of paper, then that will not be possible,” said Jon.
Although service providers should embrace change, innovations such as Distributed Ledger Technology (DLT) are not always the panacea.
Jon then warned that DLT’s immutability, once considered a strategic advantage, could complicate KYC screenings at TAs and fund administrators, given investors now have the right to be forgotten under the EU’s General Data Protection Regulation (GDPR).
Going full speed ahead with AI
Experts at our Connect Forum explored how wider adoption of AI could help asset managers not just win over new clients, but safeguard them too.
This comes as research by consultancy firm Mercer found 73% of asset managers are currently using AI to boost their operational efficiency.[2] By removing operational pain-points, AI can help enhance the overall client experience. Gillian Hepburn, Head of Adviser Solutions in the UK, Vanguard, said some advisers are using AI to summarise client meeting notes, freeing up time and allowing them to meet with more customers and prospects.
The technology is also paving the way for greater hyper-personalisation. Through deep dive analytics of client and market data and other real-time signals intelligence, AI can help managers and advisers refine their product distribution techniques, ensuring they are targeting the right investors with the right products.
Other speakers at our Connect Forum said AI could fulfil an important investor protection role, by supporting advisers when drafting product suitability reports, or even when complying with the UK’s Consumer Duty rules. Richard McGrail, Sales Director, SS&C, said AI tools are being integrated into customer call centres operated on behalf of asset managers and wealth advisers to help handlers spot any potential client vulnerabilities.
Although AI continues to improve and is filling an important void in the financial advice gap, speakers highlighted the technology will never replace human empathy or understanding.
AI is not without its risks either. Experts at our Connect Forum urged the industry to prioritise data security and cyber-hygiene, especially as AI becomes more sophisticated and autonomous. Recent data from IBM shows AI-driven cyber-attacks are up 56% this year, with financial services suffering the highest losses out of any sector. [3] It also follows recent breaches by agentic AI tools of government and company websites, whilst frauds involving Deepfakes and voice clones are also taking their toll, with losses from such attacks now approaching $3.7 billion since 2025.[4]
AI has plenty of tangible use cases, but the funds industry must ensure it keeps tabs on the technology’s risks, some of which are not yet properly understood.
Connecting innovation with the infrastructure to support it
Across the discussions at Connect Forum, a consistent picture emerged. Investment management is becoming more diverse, more digital and increasingly shaped by changing investor expectations. ETFs are broadening access to different investment strategies, tokenisation is opening new possibilities for distribution and liquidity, and AI is beginning to reshape how firms engage with and support investors.
Each of these developments brings opportunities, but also new operational demands. Supporting a growing range of investment structures, channels and technologies cannot mean creating a separate set of processes and infrastructure for each one. As Shannon Olesen of Calastone highlighted, the industry needs connected, scalable servicing models capable of accommodating increasing product diversity while delivering a consistent investor experience.
The challenge now is to ensure that innovation across the investment ecosystem is matched by progress in the infrastructure underpinning it. Greater interoperability between participants, systems and distribution channels will be central to achieving this, allowing asset managers and their partners to embrace new opportunities without introducing unnecessary complexity.
Ultimately, the next phase of investment management will be shaped as much by the industry’s ability to connect and service new investment opportunities as by the innovations themselves.
[1] ETFGI – September 16, 2026 – ETFGI reports global ETF assets top $24 trillion for the first time as investors add nearly$2 trillion in 2026
[2] Mercer – How Artificial Intelligence is shaping asset management
[3] IBM – July 29, 2026 – IBM Study: One in four malicious breaches are AI enabled, costing companies $6 million on average
[4] Brightside – July 19, 2026 – Deepfake fraud in 2026: The $3.7 billion problem and how to defend
