After another year of intensifying fee pressure, shifting client behaviours and surging interest in passive strategies, asset managers arrived at Fund Forum in Monaco facing tough questions about how to remain competitive in a fast-changing landscape. With younger, digitally native investors gravitating towards ETFs and crypto, and distribution costs continuing to rise, the industry is having to rethink how it engages clients and delivers value.
Calastone was once again at the heart of the discussion. Our team featured prominently across the agenda – moderating key panels and speaking alongside industry leaders – sharing views on the operational challenges facing active managers, the growing role of tokenisation, and how fund distribution needs to evolve to meet tomorrow’s investor expectations.
Time to adapt
Younger investors are reshaping the future of fund distribution. With a clear preference for ETFs, crypto, and mobile-first financial experiences, this next generation of allocators is unlikely to be won over by traditional active models and legacy channels.
Despite overseeing a record $128 trillion[1] in assets, the asset management industry is under pressure. Active managers, in particular, are losing ground, with $100 billion[2] in outflows last year alone, as investors increasingly turn to lower-cost passive products. This migration is being driven not just by pricing, but by evolving client expectations, demographic shifts, and the appeal of more intuitive, tech-enabled investment experiences.
At Fund Forum, our experts pointed to another challenge compounding the problem – a distribution model that is increasingly inefficient. Edward Glyn, our Head of Global Markets, noted that client acquisition remains costly and convoluted, with a complex chain of intermediaries including advisers, platforms and transfer agents adding friction and expense. According to BCG, asset managers’ costs rose at a CAGR of 6% between 2022 and 2024, a trend unlikely to reverse without structural change.
And yet, the potential prize is huge. At our stand, Simon Keefe, Head of Digital Solutions, cited PwC research forecasting a $68 trillion intergenerational wealth transfer from baby boomers over the next decade. Winning a share of that capital will depend on how effectively fund providers can align their offerings and their user experience with the expectations of digital-native investors.
Looking to the neo-banks for inspiration
Neo-banks are thriving, and the funds industry should take note.
At Fund Forum, Edward sat down with Martin Gilbert, Chairman of Revolut, a leading UK neo-bank and fin-tech, to lead a fireside chat. During the discussion, Martin told the audience that Revolut is currently signing up between 1.5 million – 2 million new accounts each month, half of which are referrals from existing customers. The source of Revolut’s success, continued Martin, is because it offers a simple and frictionless user experience through an easy to navigate mobile app, in contrast to many of the incumbent providers.
This comes as a Revolut survey recently revealed that 79% of businesses reported[3] issues with legacy banks, including excessive fees and poor mobile experiences. Similarly, the fund world still relies on legacy workflows and fragmented intermediaries, which can make investor onboarding and engagement feel unnecessarily complex and slow-moving.
“Revolut have made the client acquisition process more streamlined and cost effective, by removing a number of the unnecessary pain-points in the supply chain, and then using data to understand clients better . This is something, which funds should take on board,” said Edward.
The risk of doing nothing is not really an option for the funds industry.
That evolution may already be underway. During the discussion, Martin Gilbert shared that Revolut recently surveyed its clients to better understand their investment priorities and found that access to private markets ranked first. For the traditional funds industry, this signals a clear warning: investors are ready for private assets, and they may not wait for legacy channels to catch up.
The good news is that change is happening. Asset managers are beginning to revisit their operating models, with many looking to expand their offerings and adopt more flexible structures to meet this rising demand.
Clients turn to alternatives
Traditional strategies may be struggling to attract new inflows, but alternatives are flourishing.
Data provider Preqin, for example, is forecasting that assets managed by alternatives , e.g. private markets, hedge funds, will almost double from $16.8 trillion to over $30 trillion by 2030.[4] A lot of this growth will be underpinned by retailisation of private markets as regulators, particularly in the EU and UK, roll out semi-liquid fund wrappers, e.g. the EU ELTIF, UK LTAF – products which are beginning to win wallet share.
With alternatives in such strong demand, one speaker on Edward’s panel, who runs a multi-strategy hedge fund and fixed income fund, said there is now greater cross-pollination happening across traditional and alternative investment strategies. As cash-hungry fund managers launch hybrid or blended strategies, it is vital they do their best to preserve their firm’s core cultural values, especially if the transition has been achieved through tactical M&A.
While demand for private markets is clearly growing – as evidenced by Revolut’s client survey – Edward sounded a note of caution about how ready the industry is to meet it.
“It will be interesting to see in which countries private market funds thrive. Many countries are adviser-led, and I question whether those advisers have the right knowledge and access to talk about private market products. And in markets which are not adviser led, investors need to have access to the right educational tools, so that they make sensible private market allocations,” said Edward.
Tokenisation makes more waves
Momentum behind tokenisation is accelerating. With growing demand from digital-native investors and mounting cost pressures on traditional infrastructure, forward-looking managers are turning to blockchain-based solutions to reshape the way funds are structured, distributed, and serviced.
During the presentation at our stand, Rebecca Pitts, Director, Sales Enablement at Calastone, gave a brief overview and demonstration of our tokenised distribution solution, and how it could reshape existing distribution practices.
By embedding tokenised funds into blockchain networks, asset managers gain direct access to new pools of capital, without disrupting existing processes or partnerships. It bridges the gap between traditional funds and blockchain-native networks such as Ethereum, Polygon, and Canton, where investment activity is increasingly being executed and settled using digital assets.
These networks are attracting a fast-growing class of investors that traditional distribution channels do not reach, including stablecoin issuers and institutional crypto firms seeking regulated investment solutions, but without having to convert assets into fiat currencies.
Retail and wealth advisers with experience trading in crypto markets are also a target audience. “On the retail or wealth side, these allocators will typically be younger or digital natives, who will perform most of their financial transactions on their mobile phones. Given the volatility in crypto-currency markets, these investors want to diversify away from crypto-currencies, towards more traditional asset classes and fund products. However, they want to access traditional assets via the same wallets and digital infrastructure which they use already for digital assets,” added Simon Keefe.
Simon also added that our distribution solution is being marketed to corporate treasurers who may be managing significant on-chain cash balances for yield or efficiency purposes.
Outside of distribution, tokenisation will help asset managers obtain operational efficiencies, at a time when their costs are steadily rising, continued Simon.
This comes not long after we published research showing that fund operating costs would fall by 23% in a fully tokenised environment, corresponding to 0.13% of Assets under Management. Across UCITS, UK and US , e.g. 40 Act, funds, the study found tokenisation would lead to aggregate savings of more than $135 billion, by streamlining compliance monitoring, client and regulatory reporting, TA and fund accounting. [5]
Tokenisation could also transform collateral management. “We believe tokenisation of money market funds (MMFs) for collateral management purposes could be a major game changer, and will bring massive improvements to a process that is inefficient,” said Simon.
Take centralised clearing of OTCs or bilateral trading of non-clearable swaps, for example. By tokenising MMFs, trading counterparties would be able to post margin to CCPs or bilateral counterparties in real-time and on a 24/7 basis, facilitating risk mitigation and liquidity benefits.
Simon highlighted some regulators have sensed an opportunity with tokenisation. “An advisory sub-committee at the US Commodity Futures Trading Commission (CFTC) recently recommended the CFTC allow tokenised non-cash collateral to be used for margining,” he said.
The message from Fund Forum was clear: standing still is not an option. As new technologies reshape what is possible and investor expectations continue to evolve, the funds industry has both an opportunity and a responsibility to reinvent how it operates, distributes, and delivers value. With tokenisation enabling new efficiencies and disruptors like neo-banks offering valuable lessons in client engagement, the path to transformation is already emerging. For firms prepared to embrace change, the potential benefits in efficiency, relevance and investor reach are significant.
[1] Boston Consulting Group – April 29, 2025 – From recovery to reinvention
[2] Boston Consulting Group – April 29, 2025 – From recovery to reinvention
[3] Revolut – November 11, 2024 – Revolut business: two thirds of businesses believe legacy banks are too slow to adapt to modern business needs
[4] Preqin – September 18, 2024 – Global alternatives markets on course to exceed $30 trillion by 2030 – Preqin forecasts
[5] Calastone – June 4, 2025 – Tokenisation: A $135 billion opportunity for asset managers
