Zhang Qian of Guotai Junan Securities: The fund investment advisory market is in its infancy Personnel capacity building is crucial

Editor's Note

From the approval of the first batch of pilot institutions last year to the second batch of pilot institutions getting the "starting gun" of the exhibition industry, the fund investment advisory business is "blooming" in the asset management circle with a posture of blooming everywhere. Under the competition of thousands of sails, the wealth management business of securities companies has officially entered the era of "buyer investment".

In the face of the investment advisory business entering a new stage of development "from 1 to N", China Fund News launched a column entitled "Securities Companies and Fund Investment Advisors when the beach is being rushed", inviting securities companies to discuss the layout and history of fund investment advisory business, explaining in detail how securities companies can give full play to their advantages and open up new blue ocean market opportunities under the chase of banks, public offerings, third parties and other institutions, and also provide a diversified reference model for successors.

The invited guest of this issue is Zhang Qian, General Manager of the Private Client Department of Guotai Junan Securities.

"The capacity building of investment advisors is crucial and is a very key link that determines the success or failure of the fund investment advisory business", Zhang Qian, general manager of the private client department of Guotai Junan Securities, said in an interview with China Fund News reporter that an excellent investment consultant needs to have three qualities, including keen customer demand insight, solid financial product skills and professional asset allocation capabilities.

In its view, from the perspective of the domestic market, the current fund investment advisory business is still in the initial exploration stage, but in the future, whether from the variety or from the service mode, there will definitely be more and more development. On the other hand, compared with banks, third parties and other financial institutions, the investment and research ability of securities companies is a traditional advantage, especially the ability to allocate large-scale assets, the ability to control equity assets is more prominent, coupled with the ability to optimize fund products, it is more likely to do a good job in fund investment.

Practice your internal skills first, "It's more meaningful to run after you're ready"

On October 25, 2019, the China Securities Regulatory Commission (CSRC) issued the Notice on Doing a Good Job in the Pilot Project of Publicly Offered Securities Investment Fund Investment Advisory Business, and the industry's long-awaited fund investment advisory business pilot was officially launched. At the beginning of last year, the CSRC officially approved the list of the first batch of 7 securities companies that were qualified for the pilot project of fund investment advisory business, and Guotai Junan successfully made the list.

Different from the traditional investment advisory in the past, the development of the fund investment advisory business is not a fierce battle of scattered soldiers and bravery, but requires more systematic and standardized preparation. From the current point of view, securities companies have made sufficient preparations for the investment advisory business of the power fund, involving business models, service processes, charging models and even talent reserves and assessment methods.

It is understood that Guotai Junan Securities began to prepare for the relevant matters of the fund investment advisory business two years ago, and the early stage was mainly some preparatory work, including the construction of the system, the construction of the system, and the running-in of the core team. Overall, it took nearly a year of preparation, and the actual battle was also a year. It is understood that Guotai Junan's fund investment advisory business development is relatively stable, at present, in the industry, the fund investment advisory strategy line is relatively advanced, and then it will further complete the strategy line, strengthen performance, and continuously improve investment and research capabilities.

"It makes more sense to run after you're ready, otherwise it's just one more step," Zhang qian said. In its view, the company's overall strategy is to strengthen itself first. In the fund investment advisory business, "we mainly want to practice our internal skills first, first do a good job in the strategy and performance of investment advisors, train investment advisors well, and strive to improve customer satisfaction."

The biggest difference between fund investment and product sales is that the former has thousands of faces, and each investor has a different situation and requires different product allocations. In fund investment advisory, "investment" and "care" are equally important, which puts forward higher requirements for the service capabilities of investment consultants.

"There has always been a saying that the fund makes money, but the basic people do not make money, because investors have no bottom in their hearts about the investment fund, they don't know when they should quit when they rise, and when they fall, they often chase up and kill the fall like investing in stocks, so "Gu" is very important, when it falls, investment advisers need to tell investors that they should be patient, and when they rise, they also let investors pay attention to not chasing high, and help investors choose a more suitable strategy", in Zhang Qian's view, fund investment advisory mainly solves two problems.

The first is the choice of investment products. It said that the current public fund market is developing rapidly, the number of fund products is very large, for investors, what products to choose is very much need to get the assistance of professional institutions, "compared to the previous seller's thinking product sales, fund investment is more buyer investment, it can help investors make a more objective and neutral choice, in the end which products are suitable for him and how much need to be allocated."

The second is to solve the problem of the investor's investment period. It said that with the changes in the market, the customer's asset allocation also needs to be changed in a timely manner, as a seller is more about when investors buy, they do not have the energy to help investors to make time judgments, when to redeem and when to change products. At present, there are many types of funds, and different market styles need to adapt to different products, which requires professional investment consultants to give advice.

The capacity building of investment advisors is crucial to determine the success or failure of the fund's investment advisory business

In the past year, Zhang Qian admitted that the overall performance is in line with expectations and there is still room for improvement.

"From the performance of the strategy, we feel that it is still basically up to expectations, and there is still room for improvement in the capacity building of investment advisers", in its view, the capacity building of investment advisers is very important, and it is a key link that determines the success or failure of the fund's investment advisory business.

"Fund investment is different from traditional product sales, in addition to having enough understanding of fund products, investment consultants also need to have excellent KYC (know your customers) capabilities, asset allocation capabilities, so higher requirements are put forward for practitioners."

In order to strengthen the professional capacity building of investment advisors, Guotai Junan Securities has formulated two sets of training systems, namely investment advisory talents and wealth management talents. Different investment advisory courses have different requirements for investment advisors, including how to understand the product, how to understand customer needs, how to understand the basic principles of asset allocation, etc. At the same time, there is both personalized training and standardized training for these consultants. Investment advisors need to face different customer groups, personalization is reflected in customer service, standardization is reflected in their service processes and methodologies.

In Zhang Qian's view, a good investment consultant needs to have three qualities. First of all, we must have a very keen insight into customer needs and understand what customers are specifically missing; second, we must have a good understanding of the product. "Investment is not only to configure the recommended products to the customer, but also to put forward professional opinions on the products that the customer has already configured, such as which products need to be added to make the entire asset structure more suitable." The third point is to have a certain degree of mastery of the logic and theory of asset allocation. "It is not that the number of products is not necessarily diversified, but it depends on the correlation between asset returns and risk fluctuations."

According to the data, as of now, the number of investment advisers of Guotai Junan Securities has exceeded 3,000, ranking among the top three in the industry. Zhang Qian said that the company will continue to increase the training of fund investment advisors, improve the quality of personnel, and will continue to recruit and expand the number of teams.

The fund investment advisory market is in its infancy The future market is huge

With the first batch of securities companies obtaining the pilot qualification of fund investment advisory business, the wealth management business of securities companies has officially entered the era of "buyer investment".

Compared with banks, third parties and other financial institutions, the fund investment of securities companies has its natural advantages. "The Internet is stronger than online reach and online tools, banks are stronger than offline reach and integrated financial system, and securities companies are stronger than the professional capabilities of equity asset management." For fund investment advisors, "investment" is important, "care" is actually more important,

In contrast, the advantages of brokers are more obvious. "First of all, compared with banks, third parties and other financial institutions, the investment advisors of securities companies are more professional, and secondly, the customer base of securities companies is relatively high in risk appetite, and there are also a lot of knowledge precipitation in research funds", Zhang Qian said, in addition, the investment and research capabilities of securities companies are traditional advantages, especially the ability to allocate large types of assets, the ability to control equity assets is more prominent, coupled with the optimal selection ability of fund products, it is more likely to do a good job in fund investment.

In doing a good job in the fund investment advisory business, some excellent overseas experience is also worth learning from brokers. First, offline services. "Now some overseas institutions, such as UBS (UBS Group), have special one-to-one offline services, and with the support of a high degree of digital system, their investment research results are transformed into specific asset allocation to customers very quickly." Such a complete service model of an investment advisory institution in the whole chain from investment research to asset allocation to account manager is worth learning," Zhang Qian said. In addition, there are also worth learning places in robo-advisory services. "Robo-advisors should have thousands of people, but lack of offline communication and exchanges, which requires an understanding of the investor's original investment experience and a grasp of the original investment data, which is very important in the design of the questionnaire."

It is worth noting that at the time of the rapid development of the wealth management industry, the securities industry has entered the new track with fund investment, which is not only conducive to expanding the boundaries of business and capabilities, but also conducive to the transformation of traditional business models, which can be described as "killing two birds with one stone". However, in Zhang Qian's view, the current fund investment advisory business is still in the initial stage of development, and there is still a long way to go to truly successfully promote the transformation of securities companies' wealth management business.

In its view, from the overseas experience, fund investment is in a very high-speed development process, and from the domestic point of view, is currently in a very preliminary stage, for securities companies, fund investment advisory business needs a very large investment, from the system to the mechanism structure, etc., securities companies also need to do a lot of preparations. In addition, from the perspective of market acceptance, customers need process and time from accepting public funds to accepting public funds.

"As far as securities companies are concerned, if from the data point of view, the proportion of fund investment advisory business income in wealth management business income reaches a relatively balanced and stable time, then the wealth management transformation may enter the second stage." Although the transformation of wealth management of brokers has been shouted for many years, the real start and acceleration also began last year. So the whole road is long, but the effect will be obvious, and the acceleration behind will be getting bigger and bigger."

Not only that, in Zhang Qian's view, fund investment advisory still has several problems to be solved in helping the transformation of securities companies' wealth business.

First, the professional capabilities required by the current fund investment advisers do not match the professional capabilities of the current account managers. In fact, as far as the account manager is concerned, although the brokerage is relatively strong, it still needs more time to train, the initial investment is larger, and the specific investment also depends on the determination of each brokerage, compared with the traditional business, the price of investment is not high. In addition, the business not only requires specific investment, but also has higher requirements for the synergy ability of the entire integrated financial business. "Because wealth management transformation may not only be about selling products, not just investment advisors, but also about providing clients with asset allocation solutions that are right for him."

The second difficulty lies in the customer's expectations. "Now the net worth route is becoming clearer and clearer, the role of asset allocation in this is becoming more and more obvious, the risk-free return in the customer's mind is actually declining, so in this context, after reaching a certain critical point, asset allocation can be done more smoothly, but now from the risk-return ratio, the cost performance is not as good as before, so the customer's psychological expectations also have a process," he said.