Trending Themes in Asset and Wealth Management
- 401(k)s Under Siege: Surging Hardship Withdrawals Reflect America's Financial Strain: Reveals how escalating financial pressures are driving a sharp rise in 401(k) hardship withdrawals, pushing recordkeepers to respond with emergency savings options, rollovers, and participant education to curb long‑term retirement leakage
- Crypto ETFs Move from “Access” to Allocation: Digital Assets Enter Core Portfolio Frameworks: Showcases how crypto ETFs are evolving from simple access products into purpose‑built portfolio allocations, as institutional, advisor, and retail demand drives issuers to integrate digital assets into income, risk‑managed, and model‑portfolio frameworks
- GenAI in Wealth Management: From Pilots to Production Scale: Highlights how wealth management firms are moving GenAI from pilots to enterprise scale embedding it across client, advisor, and operations workflows; while agentic AI emerges as the next lever for end‑to‑end automation and competitive differentiation
These interconnected trends underscore a dynamic environment where evolving client expectations, a focus on comprehensive service, and a fundamental shift in investment vehicle preferences are collectively shaping the opportunities and challenges for Asset and Wealth Management firms aiming for future growth. This collective evolution signals a profound transformation across the sector, pushing firms to rethink traditional models and embrace new approaches to remain competitive and relevant
401(k)s Under Siege: Surging Hardship Withdrawals Reflect America's Financial Strain
Introduction
- Hardship withdrawals happen when participants dip into retirement plans due to financial strain. Vanguard's "How America Saves 2026" report (Mar’26), reveals more people are pulling money from defined contribution plans to cover surprise expenses (Vanguard analyzed 1,400 qualified plans for which it directly provides recordkeeping services)
- The Vanguard survey found an average of 6% of plan participants used hardship withdrawals in 2025, if offered, from their 401(k) plans, up from 4.8% in 2024 and 3.6% in 2023. Avoiding foreclosures, eviction, and medical expenses were the leading reasons reported by 401(k) participants for making hardship withdrawals. The median size of the withdrawal was $1,900
Setting the Context: The SECURE Act 2.0 of 2022 made it easier for employees to make hardship withdrawals by enabling participants to self-certify that they have had a safe harbor event that constitutes a deemed hardship, rather than requiring plan administrators confirm that need
- According to a 2026 Plansponsor study, plans with at least $1B in plan assets had the biggest jump in average hardship withdrawals in the last two years
- In 2025, 7.7% of participants in plans with assets of at least $1B made hardship withdrawals, compared with just 2.2% in 2024 (Sample population: 4,387 plan sponsors from a wide variety of US industries)
Industry Response & Adaptation: Recordkeepers are rolling out targeted solutions to plug leakage in retirement plans, shifting the focus from simply allowing hardship withdrawals to actively protecting long-term savings
- Transamerica (Mar’26): Launched Pearl (The Transamerica Virtual AssistantSM), a tool that streamlines moving savings from other retirement accounts with speed, simplicity, and support. This helps curb retirement savings leakages by enabling easy rollovers, avoiding premature withdrawals
- Fidelity (early 2026): Firm’s latest workplace thought leadership shows that about ~45% of corporate DC plans are using auto-enrollment as of Dec’25 (up from 37% in 2020), reflecting SECURE 2.0 mandates and growing plan adoption. It underscores Fidelity’s focus on automatic features to boost participation and narrow retirement savings gaps (Sample population: Fidelity analysis is based on 26,200 corporate DC plans and 24.8M participants as of Dec’25)
- T.Rowe (Apr’25): Launched an in-plan emergency savings account (ESA) for retirement plan participants, which would encourage them to deter hardship withdrawals by providing quick access to penalty-free funds for urgent needs
Evalueserve Perspective
Hardship withdrawals raise concern as they contribute to significant leakage from 401(k) plans. Recordkeepers can implement the following proactive measures to reduce unnecessary hardship withdrawals by participants:
- Launch dedicated products suite: Use virtual assistants, rollover platforms which specialize in guiding participants on consolidating their retirement accounts at a single place
- Promote emergency savings accounts (ESAs): RKs could look to promote ESAs which offer short-term funding in case of extreme situations, reducing reliance on hardship withdrawals
- Drive Behavioral Education: Organize regular in-person or virtual sessions to build a culture of retirement savings awareness, educating participants on long-term impacts of withdrawals
Crypto ETFs Move from “Access” to Allocation: Digital Assets Enter Core Portfolio Frameworks
Introduction
- Crypto exchange‑traded products (ETPs), especially ETFs, are evolving from basic “access wrappers” into outcome-oriented vehicles designed for specific portfolio roles, such as yield generation (staking-enabled ETPs) and risk-mitigated exposure (Treasury/crypto hybrids). This signals that the market is no longer only solving “how to buy crypto safely,” but “how to hold it in a portfolio with repeatable use cases
- This shift is reinforced by investor and intermediary intent as of early 2026:
- BBH’s latest global ETF survey (Mar ’26) shows that 17% of professional ETF investors intend to invest in cryptocurrency ETFs in 2026
- Northwestern Mutual (Mar ’26) study highlights sustained retail interest, especially among younger cohorts. Among investors considering or using crypto, 73% view these assets as a faster path to achieving long‑term financial goals—rising to 80% among Gen Z—signalling intent that goes beyond casual experimentation
Setting the Context: Crypto ETFs are moving beyond exploratory use as both intermediaries and end‑investors formalize intent:
- Institutional intent is emerging: 17% of institutional investors, fund managers, and advisors plan to invest in cryptocurrency ETFs in 2026, according to BBH’s Survey (Mar ’26), signalling early but broad‑based institutional consideration
- Advisor allocation is scaling: 32% of advisors allocated to crypto in client accounts in 2025 (vs. 22% in 2024) and 64% of crypto‑exposed portfolios allocated >2%, suggesting movement from token exposure toward intentional sizing, as per Bitwise–VettaFi 2026 Benchmark Survey (Jan ’26)
- Retail demand remains a tailwind: 24% of US investors plan to invest in crypto in 2026, rising to 32% for Gen Z and 35% for Millennials, per Northwestern Mutual’s Study (Mar ’26)
Industry Response & Adaptation: ETF issuers are responding by broadening crypto product design and embedding digital assets into familiar portfolio structures:
- BlackRock (Mar ’26): Launched the iShares Staked Ethereum Trust ETF (ETHB), combining spot ether exposure with staking‑based income
- VistaShares (Feb ’26): Introduced BTYB, blending U.S. Treasuries with bitcoin‑linked exposure via a synthetic covered‑call structure
- Bitwise (Feb’26): Launched Model Portfolio Solutions for Digital Assets (seven models) to help advisors implement digital asset exposure in client portfolios via ETFs
- BlackRock (Jan’26): Filed to launch an iShares Bitcoin “premium income” ETF designed to track bitcoin price while generating premium income by writing call options on IBIT shares
- Morgan Stanley (Jan’26): Filed to launch ETFs tied to Bitcoin and Solana, signalling direct participation by a major bank in crypto ETF product development
Evalueserve Perspective
As crypto ETFs transition from access products to portfolio allocations, asset managers face a new set of strategic, governance, and enablement priorities:
- Shift from Access to Allocation: Crypto ETFs are no longer just exposure tools; asset managers must position them with defined portfolio roles, sizing guidance, and use‑case clarity (growth, income, diversification)
- Institutional‑Grade Governance Becomes Table Stakes: As crypto becomes a repeat allocation, expectations around custody, liquidity, surveillance, and operational transparency will need to match traditional ETF standards—especially for staking and income‑oriented designs
- More Complex Due Diligence and Advisor Enablement: Staking, options overlays, and hybrid structures raise monitoring and suitability complexity, requiring stronger due‑diligence frameworks, clearer disclosures, and advisor education
GenAI in Wealth Management: From Pilots to Production Scale
Introduction
The wealth management industry is entering a pivotal phase where firms have shifted from experimentation to enterprise integration, embedding Generative AI (GenAI) and Agentic AI across functions. GenAI has surpassed cloud as the most impactful technology, while agentic AI is emerging as the next wave driver of efficiency and automation
- As per Broadridge’s 2026 Digital Transformation & Next‑Gen Technology study, 80% of financial services firms now use GenAI or predictive AI in processes, up from 31% the prior year signaling that AI has reached operational critical mass
- Agentic AI remains in the early phase of adoption but is gaining momentum. About one-fourth (26%) of firms are already using agentic AI in their operations, and among those, 51% have advanced beyond pilot stages into active production
Setting the Context: GenAI is rapidly becoming the core enabler in wealth management from client engagement and portfolio construction to back office operations and compliance, while Agentic AI signals a future wave of deeper, end to end automation that will reshape how wealth managers operate and compete
- According to Broadridge’s 2026 study, which surveyed more than 900 financial services technology and operations leaders, 28% now identify GenAI as their most impactful business driver for 2025, a massive 17-point jump from the previous year. Furthermore, the study saw the debut of Agentic AI, with 8% of leaders citing it as the most impactful technology
- Morningstar’s 2025 Voice of the Advisor study found that 57% of financial advisors believe that GenAI is significantly impacting the industry (up from 44% in 2024), with the majority integrating it in their daily workflows, primarily for productivity gains, idea generation and client communications
Industry Response & Adaptation: Wealth managers are now embedding GenAI and Agentic AI in their core products, onboarding, and clients facing solutions, often as part of a broader AI strategy
- Betterment (Mar ‘26): Launched ‘Account Recommender’ tool that combines advisor-built logic with AI generated explanations to deliver personalized recommendations and guidance
- Dispatch & Schwab (Feb ’26): Dispatch (the universal data layer for wealth management) integrated automated Schwab account onboarding API that leverages AI driven workflows to streamline and accelerate account opening
- Raymond James (Jan ’26): Unveiled a proprietary AI operations agent ‘Rai’ that uses GenAI and natural language processing to deliver curated answers to operational questions, with full human in the loop oversight
Evalueserve Perspective
Wealth management firms must move beyond standalone AI experiments and incorporate GenAI and Agentic AI into their overarching enterprise strategy through three strategic pillars:
- Embed: Firms need to move beyond pilots and integrate GenAI into client facing tools, advisor workflows, and operations
- Automate: To remain competitive, wealth managers must deploy Agentic AI to automate multi step processes, while linking them to existing core systems and custodial APIs to reduce manual error and latency
- Collaborate: Firms must partner with technology vendors, custodians, and fintechs to create a seamless automated experience and extend AI enabled services across the wealth value chain
