The infrastructure that serves pension schemes, asset and wealth managers, relies on ageing technology and disconnected business models shaped by a different era.
Private market assets can show this most clearly. Recognised for their diversification benefits and long-term return potential, they remain difficult to use in everyday portfolio construction. Access is fragmented, minimum investments are high, liquidity is constrained, and reporting lags far behind what investors now expect. None of this is accidental. It is the by-product of complex structures layered on top of ageing operational systems.
For pension schemes, asset and wealth managers operating under continuing fee pressure, these frictions matter. Every additional intermediary, inefficient manual process, and bolt-on structure adds cost and slows decision making. Even attractive assets become hard to justify when the operational burden outweighs the client benefit.
Over time, our industry has compensated with workarounds. Bespoke vehicles and specific solutions, multiple systems and closed distribution models have filled the gaps. They solve individual problems but reinforce the broader industry disconnection. Assets, ownership structures, and delivery mechanisms continue to sit apart, forcing providers and advisers to piece together outcomes rather than design them coherently.
Tokenisation starts to change this dynamic by reshaping how ownership itself is defined and managed.
At first, the changes will seem incremental. Small efficiencies in administration, slight reductions in costs, and gradual improvements in access. But as these shifts build momentum, they’ll begin to accelerate. As John W. Gardner reportedly said, “First, things are slow. Then, they are fast. Then, they are slow again.” What starts slowly will eventually reshape how assets are managed, enabling seamless integration across strategies, structures, and markets. This isn’t just a gradual evolution, it’s the foundation for a fundamental transformation in how portfolios are constructed and delivered, unlocking broader access and opportunities over time.
This is already starting to happen. Aviva’s recent partnership announcement with Ripple to explore the use of blockchain technology to tokenise their fund products signals a shift within mainstream financial institutions. Similarly, BlackRock’s move toward tokenising iShares ETFs is not an isolated experiment. These moves demonstrate that even the most established players in the industry are exploring how tokenised assets can provide efficiencies and flexibility previously unavailable in traditional structures.
Economic Secretary to the Treasury & City Minister, Lucy Rigby, has also announced a step towards issuing the UK’s first Digital Gilt Instrument (DIGIT), pointing out that tokenisation is no longer a niche topic for the future but rapidly becoming an integral part of mainstream financial strategies. Her views on how tokenisation will increase transparency and unlock new opportunities in the financial industry align closely with the trends we’re seeing from other industry participants.
Representing assets in a digital form will also allow large and illiquid holdings to be divided into smaller units that can be issued, transferred, and recorded more efficiently. Settlement becomes simpler. Data improves. Reporting becomes more timely. Processes that once relied on multiple handoffs and reconciliations begin to look unnecessarily heavy.
These changes translate directly into economics. Lower administrative overhead, fewer operational touchpoints, and faster movement of assets all reduce the cost of delivery. When margins are thin – often measured in basis points or fractions of – and scrutiny is high, these efficiencies become increasingly valuable.
Access improves alongside cost. Fractional ownership reduces minimum investment sizes, making it easier to include private and less liquid assets within diversified portfolios. Improved transparency supports better governance and decision making for trustees, advisers, and clients. Portfolio construction becomes more flexible without abandoning the disciplines required in regulated pension and insurance environments.
None of this works in isolation. Pension schemes, unit linked funds, and life wrappers remain the backbone of long-term savings in the UK. Any shift in ownership or asset representation needs to align with these structures and support how they already operate. Compatibility with existing administration, reporting, and regulatory frameworks becomes essential to aid initial institutional adoption even if the eventual goal is for everything to be ‘on-chain’.
There is a clear risk in repeating past mistakes. New technology can just as easily produce new silos if it is wrapped in proprietary platforms or restricted access models. The more compelling path is one that simplifies connection across strategies, structures, and markets, allowing existing participants to operate more efficiently.
For an industry under constant pressure to deliver better customer outcomes, this shift points toward something long overdue. An investment operating system that is simpler to run, broader in opportunity, and better able to deal with the reality of a disconnected pension and wealth ecosystem.
The recent memorandum of understanding between Mobius, Smart Pensions, Octopus Energy and Ctrl-Alt, a tokenisation specialist, reflects exactly the direction outlined here. The focus is on exploring how tokenised real assets, starting with renewables, can sit inside the structures that already underpin pension schemes and long-term retirement savings. Not as a parallel ecosystem, and not as a closed experiment, but as part of an open, scalable framework that reduces operational friction while broadening access to assets that matter.
This matters because fragmentation is expensive, and because cost pressures across our industry are increasing. If tokenisation is going to play a role in the future of the industry, it has to connect strategy, structure, and access in a way that works at scale. That is the lens through which we approach it. Practical, collaborative, and focused on building an investment system that better reflects how clients actually live their financial lives.
The change is inevitable and we should all embrace it.
