How Buy Side Discontent is Reshaping Investment Industry Infrastructure

This newsletter is part of The Assetizer, GenTwo's thought leadership platform.

This article is part of a series examining the ideas in Assetization: Inside the Trillion-Dollar Investing Revolution (Wiley, 2026).

One of the arguments we make in our new book is that dissatisfaction — among investors and the people who advise them — is the primary force driving the assetization revolution. Not technology, not regulation, not macroeconomic shifts, though all of those play a role. It’s the demand side, what we call the “buy side”, that is restless.

In our terminology in the book we use “buy side” to mean the consumers of investment products. This covers not just end investors but also the allocators: independent advisors and institutional wealth managers who are helping their clients make their product buying decisions.

The amazing shrinking menu
 

On the investor side we find that discontent rooted in lack of choice and diminishing trust.

For most investors today, investing still means public markets. These are vast — global equities around $125 trillion, bonds nearly $145 trillion – but their scope has been quietly narrowing for decades. The number of listed US companies has roughly halved since the late 1990s, from nearly 8,000 to fewer than 4,300 today. Meanwhile, approximately 80% of American firms with revenues above $100 million remain private.

The diversification picture is similarly deflating. The ten largest S&P 500 stocks now account for close to 40% of the index’s value. As a result the 60/40 portfolio — the industry standard for decades — is becoming less and less reliable as a risk management strategy. BlackRock has stated plainly that this correlation has “fundamentally shifted.”The free lunch that portfolio theory promised is harder to find.

On the trust side, the young especially no longer feel themselves bound to the traditional way of doing things. There is less loyalty, less patience, and more desire for new types of assets, better tools, more speed and less friction.

All of this is of course fairly well known.

The middleman squeeze
 

From an assetization perspective, perhaps the more interesting story involves the financial intermediaries we also put on the buy side of the equation.

Independent advisors are feeling the same pressures as their clients — the demand for alternatives, the impatience with generic solutions — but they’re also getting squeezed from the other direction. Fee compression from low-cost ETFs and digital platforms erodes revenue from below. Compliance costs and technology investment push expenses up from above. And somewhere in the middle, the value proposition starts to blur. When a client’s statement shows BlackRock and Vanguard rather than their advisor’s firm name, the reasonable question is what the intermediary is actually adding.

Institutional wealth managers, for example in private banks, face similar issues, with the added burden of often being constrained to their approved product shelf and legacy infrastructure that makes reacting quickly to new opportunities difficult.

We looked at this in detail in our Shelf Syndrome report, where we found that advisors who rely on third-party shelf products face five distinct consequences: fee compression, alpha outsourcing, indistinguishability from competitors, brand dilution, and strategic irrelevance when client demand moves toward assets that simply aren’t on the approved list.

The opportunity of discontent
 

There’s friction everywhere.

Advisors want to act as architects of solutions. The system treats them as distributors. They often lack the operational infrastructure to access private markets or build custom products quickly. Institutional advisors face committee-driven approval processes that can lag client interest by months. Either way, the result is the same: advisors watching clients pursue opportunities they cannot provide.

Large wealth managers are built for scale and standardization — they have neither the incentive nor the flexibility to produce the personalized, modular products that advisors and their clients increasingly want.

The combined pressure — investors who want more, advisors and wealth managers who want to deliver it but can’t — is building up against infrastructure that wasn’t designed for it.

Of course, friction has an upside too. It drives innovation. And it’s that innovation we chronicle in the book.

I will dive into exactly what is going on in the following posts of this series. For now the takeaway is that the dramatic changes we see coming to the investment industry infrastructure are being driven by a kind of restless discontent, and that’s not necessarily a bad thing.

Discontent, after all, often masks great opportunity.

All the best,
Tom