Inclusion of alternative assets in retirement plans opens access to a massive market.
Financial services industry outlook key takeaways
Retail investors have become a major force in the financial markets.
The value of tokenized assets is expected to grow from $300 billion to $18.9 trillion by 2033.
What is the financial services industry outlook?
RSM’s financial services outlook provides insights into the major trends shaping the industry throughout the year. In the asset management sector, the democratization of alternative assets extends investment opportunities historically reserved for institutional investors and high net worth individuals to the average 401(k) participant. Meanwhile, in the capital markets space, greater access to research tools and investors’ increasing sophistication are contributing to the rise of retail investors. Blockchain technology has also continued to fuel innovation in the financial services industry.
Financial services trend #1: Alternative assets in 401(k)s: Implications for asset managers and individuals
The president’s August Executive Order 14330, "Democratizing Access to Alternative Assets for 401(k) Investors," marked a significant policy shift that could reshape the retirement landscape for millions of Americans participating in employer-sponsored defined contribution plans.
For asset managers, the inclusion of alternative assets in retirement plans opens access to a massive market that has been largely off-limits, creating opportunities for product innovation and revenue growth. But for asset managers and individual savers alike, this policy shift brings challenges alongside the opportunities.
Financial services trend #2: From Wall Street to Main Street: Capital markets adapt to retail investor growth
Since the introduction of commission-free trading in 2019, retail investors have become a major force in the financial markets. The combination of fee-free trading and the increased amount of downtime for retail investors during the 2020 pandemic solidified retail investors’ relevance and importance to the markets.
Some of this volume can be attributed to the extension of global trading hours and cross-border market engagement, but the rise of retail investors as an influential and dynamic force in the markets goes beyond longer hours. Greater access to research tools and investors’ increasing sophistication are also at play.
Financial services trend #3: Blockchain and tokenization ignite innovation in financial markets
Blockchain technology has continued to fuel innovation in the financial services industry, particularly through the emergence of tokenized assets. The value of tokenized assets is expected to grow from $300 billion to $18.9 trillion by 2033, according to a recent report by Ripple and Boston Consulting Group. Those assets include stablecoins, deposits, real estate and—most notable for the capital markets sector—equities.
Tokenized equities or tokenized stocks are positioned to revolutionize trading and market access, for both public and private company shares. Alongside larger financial services firms, middle market capital markets organizations—including digital asset exchanges—are actively seeking regulatory approval to deploy tokenized stocks on their platforms.
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