Looking at the future

The future of investing can be broken down into two fundamental outcomes. The first are the new investment opportunitiesn for retail and accredited investors. These include investments in private markets, sustainable investing, and previously illiquid assets.

The second result is the improvement of the markets. The Alternative investments can break the manacles that limit the retail markets to stocks and bonds. AI-powered ESG ratings can enable more informed financial risk management, and asset tokenization can lead to more efficient issuance and trading in the capital markets.

Innovation will not come without obstacles. Retail investors and their financial advisers must be convinced that the alternatives are worth the risks. The future of ASG will be tied to regulatory clarity from governments, as corporate greenwashing is not being effectively deterred at present. And the world's fragmented financial system cannot switch to blockchain overnight. Financial institutions have to be on board with tokenization, and even the ones that are today are only using it on an experimental basis.

The barriers may point to a long road ahead, but the fact that legacy financial players are now making moves - at the same time that fintech platforms are maturing - are promising indicators of where investment is headed.