How Tokenization Could Accelerate the Personalization of Investing

Wednesday, May 11, 2022 | By David Moffat, Senior Director

How Tokenization Could Accelerate the Personalization of Investing

Tokenization could have effects far more profound than lower transaction costs, improved price discovery, added liquidity and a broadening of the investor base for funds. In this blog, we explore how tokenization could also facilitate investment combinations tailored precisely to the needs, wants and values of the individual investor.

Personalized portfolios are common among high net worth investors, but an individualized approach also appeals to younger generations—although they don’t always have the structured notes or family funds to support it. As digital natives, Millennials and Generation Z expect immediacy, simplicity and transparency, which are harder to find in the more approachable mutual funds. Tokenization can provide a path for funds to offer the personalization younger generations expect, while also offering speed and ease.

Tokens also come with features and processes that younger generations already use. Younger investors may already use digital wallets, so the smart contracts embedded in tokenized funds to quickly complete due diligence checks will feel very familiar to them. In fact, non-fungible tokens (NFTs) were essentially created by video gamers, and crypto tokens are already widely used in online games where users buy and sell in-game items.

Tokenized funds are part of the ecosystem where Millennials and Generation Z live their daily lives, so it’s a natural step for fund managers to use them as a way to appeal to younger investors.

To learn more about the rewards of tokenization of funds, download our whitepaper, or read our previous blogs about the increased speed and reduced costs of tokenized funds, how tokenization drives digitization, and how regulatory authorities are working to provide greater legal and regulatory certainty.

Asset Management, EMEA

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