By Tom Carey, Corporate Vice President, President of Global Technology and Operations at Broadridge.
Wealth management stands at a pivotal crossroads, poised for revolutionary change that will fundamentally reshape the delivery, consumption and value of financial services. Global assets under management are projected to reach $145.4 trillion by 2026, with alternative investments growing at twice the pace of traditional assets.
The convergence of digitalisation, alternative investments and evolving client expectations is creating unprecedented opportunities for firms ready to embrace change. This transformation is not simply evolutionary, it is structural, altering how firms attract clients, construct portfolios and deliver value across the wealth spectrum.
Unprecedented growth in alternatives
The predicted surge in global assets under management and alternative investments reflects both a response to persistently low yields in conventional vehicles and a marked shift in investor preferences. As inflationary pressures, interest rate volatility, and global macroeconomic uncertainty continue to challenge traditional portfolios, investors are looking to alternatives as a means of diversifying risk and enhancing long-term returns.
Across the wealth management landscape, we observe three powerful forces driving this transformation: democratisation of alternative investments, technological innovation reshaping operational processes and evolving client expectations demanding more personalised services. These forces are not operating in isolation, they are deeply interconnected, forming a new strategic blueprint for firms seeking to compete in tomorrow’s wealth landscape.
Alternative investments, once exclusively available to institutional and ultra-wealthy investors, are becoming increasingly accessible to a broader range of retail clients. Financial advisers are responding, over 90% expect to allocate more than 5% of client portfolios to alternatives by 2025 – up significantly from 72% in 2023. The traditional “60/40” portfolio is giving way to a “50/30/20” model, where alternatives could comprise up to 20% of retail portfolios within the decade.
This reallocation reflects a rethinking of portfolio theory itself, as investors seek uncorrelated assets such as private equity, private credit, infrastructure and real assets to weather market fluctuations.
Technology as the backbone of transformation
Technological innovation underpins this shift. Asset tokenisation, powered by distributed ledger technology, is modernising the infrastructure for managing alternative investments, dramatically improving efficiency and accessibility. It is eliminating long-standing friction, from onboarding and capital calls to distributions and liquidity events. Tokenised assets also pave the way for fractional ownership, bringing once illiquid, high-minimum investment opportunities to a broader investor base.
Digital platforms have become foundational tools, offering scalable, transparent access to alternatives with lower minimum investment thresholds. The technology ecosystem supporting alternatives has expanded significantly, encompassing specialised marketplaces, direct-to-consumer platforms and integrated wealth management solutions. These platforms not only democratise access but also streamline adviser workflows, improve compliance, and enhance investor communication, all of which are key to building trust and long-term relationships.
Client expectations continue to evolve in parallel with these developments. Our research found that over half the firms say their biggest customer experience challenge is the ability to personalise content. Modern investors increasingly demand holistic solutions that integrate both traditional and alternative assets, delivered via seamless, intuitive digital experiences. Firms are responding, 37% are investing in adviser and client portals to enhance service delivery and engagement.
Data serves as the foundation for this innovation. Between 2023 and 2024, data platforms rose from 13th to 4th in technology priorities for wealth management firms. Cloud migration is enabling top firms to launch new features 65% faster, creating significant competitive advantage for early adopters.
Regulatory environment in motion
The regulatory landscape is evolving to accommodate these changes. Reforms like the EU’s European Long-Term Investment Fund 2.0 framework are removing long-standing barriers to alternative investment access by simplifying rules for retail investor access, improving liquidity provisions and ensuring greater alignment with investor protections and transparency standards. These changes are designed to foster growth in long-term private market investment across Europe.
Meanwhile, reduced platform fees are improving the economics for all participants. Nonetheless, regulatory compliance remains critical, with 73% of wealth executives stating that data privacy is a top priority.
For wealth management firms to succeed in this new environment, strategic imperatives emerge: strengthen partnerships with technology providers and alternative asset platforms, increase exposure to private equity, private credit, and real estate, seamlessly integrate alternatives into portfolio construction tools and invest in adviser education and client communication resources.
Firms that strike the right balance between technological innovation and human expertise will define the future of wealth management. The opportunity is profound- potentially unlocking trillions in retail investment into alternative assets while offering clients more personalised, outcomes-driven solutions.
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