The Current State of Distribution and the Role of Key Stakeholders

Currently, asset management distribution involves multiple intermediaries such as placement agents, custodians, fund administrators, and transfer agents. These entities facilitate capital inflows, trade execution, and asset servicing but often create complex, manual, and expensive processes. Paperbased documentation, delayed settlement cycles (T+1 or T+2), and fragmented communication between entities are still common, increasing operational risks and costs.

Accessibility is a significant challenge. High minimum investment thresholds and restrictive distribution agreements favor institutional investors, while excluding retail and emerging-market participants. And looking at it – not only from a Swiss and European perspective – cross-border distribution is hindered by varying national regulations, making global scalability a daunting task for asset managers.

Tokenization is fundamentally reshaping the industry, primarily the distribution mechanisms by converting traditional financial assets into digital tokens on blockchain networks. This shift introduces significant efficiencies and redefines traditional roles and responsibilities across the operational landscape.

• Digital custodians are emerging as central players, with their focus now centered on digital asset management rather than the safekeeping of physical or dematerialized securities. Their core responsibilities now include managing cryptographic keys, offering secure wallet nfrastructures, and ensuring compliance with evolving regulations governing digital asset custody. These custodians must also implement robust cybersecurity protocols and adapt to regulatory standards like the European Union’s Markets in Crypto-Assets Regulation (MiCAR) and the U.S. Securities and Exchange Commission’s (SEC) guidance on digital securities.

• Compliance officers, too, are transitioning from traditional post-trade auditors to proactive monitors of on-chain behavior. They are increasingly involved in the design and governance of smart contracts to ensure that regulatory conditions—such as anti-money laundering (AML) rules and know-your-customer (KYC) standards—are enforced at the code level. Blockchain analytics tools and decentralized identity solutions are now essential components of their toolkit.

• Regulators face the task of redefining oversight frameworks to accommodate decentralized systems. Unlike traditional financial infrastructures, blockchains operate across jurisdictions and are not confined to single regulatory environments. As a result, regulators must collaborate internationally to develop harmonized standards that ensure investor protection while enabling innovation. This requires an adaptive regulatory posture, where sandbox programs and regulatory pilots play a key role in testing new models.

• Technology providers have become strategic partners to financial institutions, supplying blockchain platforms, smart contract development tools, and compliance automation technologies. Their role now extends beyond IT support into governance, security, and operational design. Providers who offer modular and compliant infrastructure will shape the future of asset management distribution.

• Asset managers must reconsider how they structure their offerings, balancing the integration of tokenized products with traditional funds. They are tasked with navigating evolving ecosystems that include decentralized finance (DeFi), regulated digital exchanges, and token issuance platforms. Their new mandate is not only to generate alpha but also to adapt their business models to stay competitive in a tokenized world.

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In summary, tokenization does not merely digitize existing processes—it redefines them. The distribution landscape in asset management is at an inflection point. As distribution channels are restructured, stakeholders must evolve their roles to align with the new operational realities and regulatory expectations of a decentralized, digitized financial system. These transformations across custody, compliance, and settlement processes not only reduce operational costs but also unlock new efficiencies, accessibility, and resilience in the asset management industry.

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Key Stakeholders in the Distribution Value Chain Investors and Beneficiaries:
Individuals or institutions providing capital and expecting returns.
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Asset Managers:
Professionals managing portfolios and making strategic investment decisions.
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Custodians:
Entities safeguarding financial assets and ensuring regulatory compliance.

‍Fund's & Portfolio Managers:
‍Executing investment strategies and risk management.

‍Regulatory Bodies:
‍Enforcing legal frameworks and compliance.

Financial Institutions and Banks:
Offering services like fund administration, lending, and liquidity.

Technology Providers:
Supplying infrastructure for digital transformation and security.

Auditors and Compliance Officers:
‍Verifying accuracy and regulatory adherence.

Governments and Tax Authorities:
Monitoring fiscal implications and offering incentives.

End Clients:
The ultimate beneficiaries such as pensioners, policyholders, or retail investors.