Retirement planning is the primary objective of retail investors. Indeed, 47% of respondents in the 2022 CFA Institute Investor Trust Study indicated saving for retirement was their most important investment goal.

Yet the conventional pathway to retirement savings – the traditional stock and bond portfolio – is not as effective as it used to be. Weaker diversification, declining real returns, and rising inflation all present major challenges to both defined benefit and defined contribution (DC) pension funds. As funds struggle to meet their return targets, investors are demanding they provide access to new and potentially riskier products. Fund managers must weigh these demands in the context of their fiduciary duty, or duty of care, obligations.

With these challenges in mind, for better or worse – or at least until regulators weigh in – many pension funds are exploring allocations to cryptoassets.

So what does that mean for the future of trust in the financial services industry?

Slower wage growth, an aging population, and lower investment returns have all been identified by the Mercer CFA Institute Global Pension Index as critical threats to the future sustainability of pension funds. Asset owners know the headwinds they face: Only a small percentage believe they are very likely to reach their annual return target over the next several years.

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