Morgan Stanley: Asset and wealth management growth diverges as AI and tokenization reshape competition

The industry continues to grow. Why will opportunities not be evenly distributed?

Morgan Stanley and Oliver Wyman expect assets under management to grow at an annual rate of approximately 9% through 2030, and household financial wealth at approximately 7% a year. However, growth in assets driven by rising markets will mask differences in operating performance among institutions.
Growth is concentrating in fewer products and channels: passive investing, solutions and some private markets are expected to continue gaining share, while wealth management and retirement channels will have greater influence over asset allocation.
Revenue growth in private markets is particularly concentrated, increasing the importance of higher-fee businesses to industry revenue. Active ETFs are growing at nearly 5 times the rate of active mutual funds.

The report expects private-market assets under management to reach 37 trillion dollars by 2030, with private equity remaining the largest asset class. This measure includes externally managed funds, customized investment mandates, and some direct investments and co-investments.
The starting point for new funding is weak: net new capital from private-market investors fell sharply in 2024–2025. The report expects it to recover to an annual average of approximately 500 billion dollars in 2026–2030.

The report says leading institutions can use AI to expand client service and research capabilities and accelerate product development, enabling revenue to grow faster than costs. Leading asset managers could improve their cost-to-income ratios by up to 15 percentage points, while wealth advisers could increase their service capacity by 30%–40%.
By 2032, wealth managers using AI could reduce their cost base by up to 25%, although some savings may be reinvested in technology, services and growth. Existing performance differences offer a reference for whether wealth managers can grow revenue faster than costs: all leading performers achieved this, compared with fewer than half of other institutions.
Morgan Stanley expects the global wealth managers it covers to achieve compound annual growth rates of approximately 10% in revenue and 8% in client assets over the next three years. By comparison, the actual growth rates in 2022–2025 were approximately 10% and 15%, respectively.

The report expects tokenized real-world assets to grow from approximately 40 billion dollars currently to approximately 2.3 trillion dollars by 2030, of which approximately 1.3 trillion dollars represents assets in which asset managers can participate. Tokenized assets under management are expected to be concentrated in money market funds.
Cash management, collateral and digital distribution are expected to be early use cases. Institutions need products, partners and digital distribution channels to attract capital, while avoiding overinvestment before commercial demand develops.
The pace at which key enabling conditions mature will affect the scale: the report gives a 2030 scenario range of approximately 1.1 trillion to 5.5 trillion dollars.