Episode summary
How AI and Tokenization Could Reshape Wealth Management
Thoughts on the Market (Morgan Stanley)
· · 12 min · Hosts: Betsy Graseck, Michael Cyprys
Summary
Assets under management are near record highs, but most of the growth is still coming from market appreciation rather than fresh client money, while fees remain under pressure. The host and guest argue that the next phase for asset and wealth managers will come from better distribution, better product positioning, and technology that improves scale rather than simply riding market beta.
Tokenization is presented as the most immediate structural opportunity. The guest says the strongest near-term uses are cash, treasuries, and collateral, because tokenized assets can move liquidity faster, support 24/7 trading, and reduce idle cash tied up across institutions. He says tokenized real-world assets are about 40 billion today and could reach about 2.3 trillion by 2030, with most of that tied to treasury and collateral use cases.
AI is framed as equally important for operating leverage and client service. The guest says AI could free up about half of adviser time spent on administrative work and raise adviser capacity by 30% to 40%, while also improving research, sales coverage, and product development. He argues AI will not replace trusted advisers, but it could expand access to advice and help the industry capture more of the growing market.
Key takeaways
- The guest expects tokenized real-world assets to grow from about 40 billion today to about 2.3 trillion by 2030, led by collateral and treasury use cases.
- The guest says about three-quarters of AUM growth is likely to come from market beta, leaving only about 2.5% for organic asset growth.
- The guest argues AI could free up roughly half of adviser nonclient time and lift adviser capacity by 30% to 40%.
- The guest says the biggest winners will combine the right products, stronger distribution, and operating leverage, not just market exposure.
- The guest warns tokenization could pressure sweep and deposit economics, but it could also create new lending opportunities.
Notable quotes
“Our base case has tokenized real world assets growing from roughly 40 billion today to about 2.3 trillion by 2030”
“The most compelling ones really are around cash, treasuries, and collateral”
“we have an expectation for about 9% growth annually in assets under management for about 160 trillion globally today to about 250 trillion by 2030”
“I think it's critical. It's both. I think it changes the competitive game because a lot of the economics are very different across the businesses”
“our work suggests that call it about half of that advisor time could be freed up then advisor capacity could increase upwards of 30 to 40% on our numbers”
How the episode opens
Welcome to Thoughts on the Market. I'm Betsy Graassic, Morgan Stanley's global head of banks and diversified finance research. And I'm Mike Cypress, head of US brokers, asset managers, and exchanges research at Morgan Stanley.
Today, we're looking at the next phase of growth across asset and wealth management, and how tokenization, AI, and changing investor flows could reshape the industry. It's Thursday, October 1st at 9:00 a.m. in New York City.
Assets under management or AUM are near record highs across the globe with a lot changing beneath the surface. Now, much of the recent AUM growth has come from markets rather than from net new client flows and meanwhile fees do remain under pressure. At the same time, technologies like AI and tokenization are creating new opportunities for both asset and wealth managers.
Our base case has tokenized real world assets growing from roughly 40 billion today to about 2.3 trillion by 2030. Mike, let's start with tokenization. What are the use cases that matter most near-term?
So, as we think about it, there's a number of use cases that we see. The most compelling ones really are around cash, treasuries, and collateral. Take for example, earning yield.
Some tokenized funds allow you to earn interest by the minute or the second that is invested rather than having to uh remain invested by that 4 p.m. cutoff that is the case today. Another benefit is allowing collateral to move around a lot more easily.
And this can help support a shift toward 247 markets. So if securities can trade 24/7 or derivatives, you may also need the cash leg of that transaction to keep pace. Right now, there are certain futures contracts that do trade over a weekend, but those positions do need to be preunded on Friday.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai in wealth management
- tokenization real world assets
- advisor capacity
- aum and fees pressures
- 24/7 markets and collateral
Companies and tickers mentioned
- MS
- Morgan Stanley
Watch the episode
Watch “How AI and Tokenization Could Reshape Wealth Management” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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