Funds and Wealth Update
Tokenisation is a word increasingly heard in the global investment funds and wealth management industry. But what does it mean and what impacts could tokenisation have?
Tokens are, very simply, snippets of computer code on a blockchain. They are now being increasingly used in the world of investment funds and wealth management, with adoption accelerating across the sector. Major investment managers are already incorporating tokenisation into their offerings. But what is the reason for this?
The main point is that a tokenised fund doesn’t need reconciling or settling because everyone approves and agrees all transactions instantly. They happen within a few quick seconds. For fund managers, this means materially less back office and operations friction and a far smaller ‘stack’ of technology. In short, greater simplicity and more competitive pricing.
Now, large investment firms and fund managers are launching tech programmes to tokenise their mutual funds. Governments are leaning in too: the US regulator authorised $100trn of US stock and exchange-traded investments to be tokenised in December 2025 and the UK’s FCA has published a tokenisation consultation paper recently. Luxembourg has enacted new tokenisation-specific laws. The race to be the world’s leading tokenisation centre is well underway.
With issuers and regulators aligned on the merits of tokenisation, it won’t be long before consumers and their advisers own these new types of tokenised fund units. Tokens are expected to be cheaper than traditional fund units and shares and more consistent with what the post-Boomer cohort of inheritors want to own: digital assets that they control.
We’re keeping a close eye on tokenisation developments and can introduce you to our partner software firm, a fintech market leader in the token distribution industry. Please contact us, and we can guide you through the opportunities tokenisation presents.
Gray Smith
Freya Howard
