Australia’s investment management industry is changing rapidly. The growth of exchange-traded funds (ETFs), emerging opportunities in tokenised investments and the increasing adoption of artificial intelligence are creating new possibilities for asset managers, distributors and investors.
The changing market landscape is placing greater demands on the infrastructure supporting the industry. As investment products diversify and distribution channels evolve, firms must accommodate new business models while maintaining efficiency, resilience and a consistent investor experience.
These were among the central themes at our Sydney Connect Forum in October, which brought together industry leaders and experts to explore the next horizon for investment management.
ETFs: growth brings new opportunities and operational demands
The extraordinary expansion of Australia’s ETF market provided a starting point for the panel discussion I moderated on the future of ETFs.
With assets reaching approximately A$388 billion across more than 500 products by the end of September 2026, ETFs have become an increasingly important part of Australia’s investment landscape. Their appeal is broadening beyond traditional passive strategies, with active management, thematic investments and more sophisticated structures attracting growing interest.
On speaker highlighted that the growing popularity of active ETFs also reflects increasing interest among established fund managers in reaching investors through listed structures.
For many managers, launching an ETF provides an additional route to market for existing investment capabilities, giving advisers and investors more convenient access to established products.
However, launching a product is only part of the challenge.
Madeline Doran, Head of Business Development at Nine Mile, emphasised the role of market making in supporting the growth of the Australian ETF market, providing liquidity and efficient execution from day one for fund managers. Meanwhile, Tim Furlan, Head of Managed Accounts at BT Financial Group, explored the growing relationship between ETFs and managed accounts, including the implications for trading as portfolios increasingly shift from traditional managed funds towards ETFs.
According to figures discussed during the panel, daily ETF trading volumes in Australia have increased from around A$300 million three years ago to approximately A$1–1.2 billion today.
Paul Elflain, Head of Digital Sales and Relationship Management at Calastone, explained that the infrastructure underpinning ETF issuance, trading and servicing must evolve alongside this growth. Increasing volumes and product complexity create demands across the entire investment lifecycle, from authorised participants and market makers to registries and administrators.
Tokenisation: moving towards commercial adoption
Tokenisation was another important focus of our discussions, reflecting growing interest in new investment structures and digital distribution channels.
In a fireside discussion, Sam Cupples, Director of Relationship Management at Calastone, and Simon Keefe, Head of Digital Assets at Calastone, explored how tokenisation is progressing beyond experimentation towards practical commercial applications.
One of the clearest opportunities lies in extending the distribution of existing investment funds. Rather than requiring asset managers to create entirely new products or replace established operating models, tokenised distribution can make existing funds accessible through blockchain-based channels while retaining connections to traditional registry and servicing infrastructure.
Simon discussed Calastone’s work with Legal & General, which has made its existing liquidity funds available through tokenised distribution, alongside growing demand for tokenised money market funds. He also highlighted developments in Asia, including tokenised ETFs in Hong Kong already processing daily transactions.
Australia is beginning to make progress too. During the asset servicing panel, Euan McLeod, Head of Asset Services, Asia Pacific at SS&C, explained that Australian clients are already moving forward with tokenised distribution.
Recent regulatory developments are helping to create a more supportive environment. ASIC’s continuing work on digital assets and Australia’s evolving licensing framework are providing greater clarity for firms considering tokenised investment products and services.
The findings from the Reserve Bank of Australia’s Project Acacia, published earlier this year, provide further context. The project examined tokenised assets across several wholesale financial market use cases, including managed funds, and highlighted the importance of interoperability between emerging digital platforms and existing financial infrastructure.
This is particularly relevant to fund distribution. As more investment products become available through digital channels, the industry must ensure these networks can connect with established investment processes rather than creating isolated systems.
Glen Dogan, General Manager, Sales & Marketing at Perpetual Corporate Trust also raised questions about how existing registry, trustee and administration arrangements will evolve as tokenised investment structures develop.
The discussions suggest that Australia’s next challenge is to demonstrate how tokenisation can support the commercial-scale distribution of investment funds and contribute to the evolution of its financial markets.
Servicing an increasingly diverse investment market
The growing range of investment products and distribution channels also featured prominently in a panel examining the future of asset servicing.
As investors gain access to managed funds, ETFs, managed accounts, private markets and digital products, servicing organisations must support a wider variety of structures and expectations.
Annabel Robertson, Senior Product Manager at MLC Asset Management, highlighted the challenges of delivering consistent investment experiences across different product structures, particularly where underlying fund redemption processes can introduce delays.
Stephen Nicholls, Director, Investment & Superannuation Advisory at Deloitte, pointed to growing investor expectations for a consolidated view of their investments, whether held through superannuation funds, platforms or other arrangements. Delivering that simplicity at the investor level can create considerable complexity behind the scenes.
For service providers, the challenge is to accommodate product diversification while maintaining stability, efficiency and control. Euan McLeod identified diversification, innovation and operational resilience as priorities for asset servicing organisations.
The discussion reinforced the importance of connected infrastructure capable of supporting different investment structures without requiring separate operating models for each new product or distribution channel.
AI: beyond individual productivity
Artificial intelligence provided a further perspective on how investment management operating models are evolving.
In a fireside discussion, Andrew Tomlinson, Chief Marketing Officer at Calastone, and Nadine Moore, APAC Director, Automation and AI at SS&C, explored how the industry can move beyond individual productivity towards broader operational transformation.
While generative AI is already helping employees complete everyday tasks, the next phase could involve AI agents coordinating more complex workflows across different systems, including reconciliations, compliance monitoring and client servicing.
However, Nadine emphasised that successful adoption requires more than introducing new technology. Firms must examine whether existing processes should be redesigned, determine where automation is most appropriate and establish effective governance and human oversight.
The greatest benefits are likely to come from rethinking how work is performed, rather than simply automating established practices.
Building the infrastructure for the next phase
Our discussions in Sydney highlighted the considerable opportunities ahead for Australia’s investment management industry.
ETF growth is expanding investment choice, tokenisation is opening new distribution channels and AI has the potential to reshape operating models. Each development also brings new demands on the infrastructure supporting the industry.
For asset managers and their servicing partners, the priority is to build more connected and adaptable operating models, strengthen interoperability between traditional and emerging technologies, and ensure innovation translates into practical improvements in efficiency and investor experience.
Australia’s investment industry has already demonstrated its ability to embrace new products and distribution models. Building the infrastructure to support this innovation at scale will be central to its continued growth and evolution.
