On the wave of wealth management: CITIC Financial Holding creates a new paradigm

As the lifeblood of the modern economy, finance has always been an important link connecting all walks of life and coordinating social resources. With the development of China's capital market and the increasing demand for public wealth management, the wealth management industry has built an important "bridge" between "injecting living water into the real economy" and "preserving and increasing the value of residents' wealth", and a new era of "great wealth management" is slowly unfolding.

In March 2022, CITIC Financial Holdings became one of the first financial holding companies to be licensed by the People's Bank of China. At the beginning of its establishment, CITIC Financial Holding clarified the functional positioning of "building a platform, building a mechanism, setting rules, and controlling risks", and should give full play to its comprehensive advantages of all licenses, all products, all scenarios and all levels, and continue to move forward on the road of financial services to the real economy and help the common prosperity of the whole people.

On the one hand, CITIC Financial Holding takes wealth management as the starting point and builds a full-licensed, three-dimensional and one-stop wealth management ecology by connecting various financial subsidiaries of CITIC, covering the widest range of wealth customers and asset categories in China, and on the other hand, CITIC Financial Holding has built a "three-ring value chain" of wealth management, comprehensive financing and asset management. The logic behind it is to open up a closed loop of large wealth management: real enterprises - investment banks - asset management - wealth management - retail customers.

According to the data, as of November 2023, CITIC Financial Holding has connected its subsidiaries to jointly build a financial ecosystem, with a total wealth management scale of 23 trillion yuan, an asset management scale of more than 7 trillion yuan, and a comprehensive financing scale of 13 trillion yuan, serving nearly 200 million individual customers.

Build a "1314" system to create value financial control with high-quality wealth management

Xi Guohua, chairman of CITIC Group and chairman of CITIC Financial Holdings, said that with the issuance of the first batch of financial holding licenses by the People's Bank of China, the development of China's financial industry has quietly entered a new stage. CITIC Financial Holdings will contribute to the "CITIC Plan" to serve the real economy, prevent and control financial risks, and deepen financial reform, and firmly follow the path of financial development with Chinese characteristics.

At the strategic level, CITIC Financial Holding has chosen to start with wealth management, and has formulated the "1314" system of CITIC Wealth Management in accordance with the concept of "creating value with high-quality wealth management".

Specifically, "one" is to establish a set of decision-making and promotion mechanisms of the wealth management committee, "three" is to build three major projects of joint cooperation, customer service and product management capabilities, "one" is to build a unified platform for wealth management, and "four" is to consolidate the four pillars of team management, assessment management, brand management and channel management.

Nowadays, what is the effectiveness of the "1314" system from the construction of the system and mechanism to the implementation of the practice, and what upgrades and optimizations have been carried out in this system?

Cao Guoqiang, general manager of CITIC Financial Holdings, said that it is necessary to build CITIC Financial Holding into the "number one engine" that drives the high-quality development of the group, and build the three core competencies of "wealth management, asset management, and comprehensive financing" on the basis of establishing a comprehensive risk prevention and control system, a comprehensive financial service system, a unified customer service system and an advanced technology empowerment system, so as to serve the real economy and create greater value.

Cao Guoqiang emphasized that under the small financial holding model (i.e., the establishment of a separate financial holding company within the enterprise group), CITIC Financial Holding can truly achieve the sustainable and healthy development of wealth management only by building a normalized mechanism, a platform for win-win cooperation, and an integrated joint operation service model.

Chang Ge, General Manager of the Wealth Management Department of CITIC Financial Holdings, said that on the basis of the organizational structure carrying "one set of mechanisms", in 2022, CITIC Financial Holdings established a wealth management committee jointly participated by various financial subsidiaries of CITIC Financial Holdings in accordance with the "1+3" model, and consisted of three sub-committees: investment banking business, retail system and asset allocation. In 2023, CITIC Financial Holding will set up five special studios for asset management business, enterprise annuity, pension business, special assets and wealth brands according to development needs, further focusing on key sectors, and finally forming a "1+3+5" wealth management system pattern.

In this way, a top-down set of mechanisms has been formed that not only has a clear vertical division of labor, but also ensures daily joint operations, so that subsidiaries can not only play their respective strengths and strengths, but also promote and cooperate with each other. Chang Ge concluded.

Create an "N+1+1" model, covering 100% of national-level specialized, specialized, special and new and strategic enterprises

In 2023, CITIC Group established a leading group for specialized and special new enterprise services led by company-level leaders, with the goal of covering 100% of national-level specialized and special new enterprises, and co-ordinated the provision of a "three-pronged" comprehensive financial service solution with full financial licenses, full-cycle products, and full-scenario services, so as to help the country become self-reliant and self-reliant in high-level science and technology.

As early as 2022, at the beginning of the establishment of the Investment Banking Sub-Committee of CITIC Financial Holding Wealth Committee, it took the service of "specialized, special and new" enterprises as an important promotion direction. As CITIC Securities and China Securities participated in the whole process and witnessed important events such as the deepening reform of the New Third Board and the establishment of the Beijing Stock Exchange, they served many "specialized, special and new" enterprises to effectively achieve their development goals through capital market financing, and had a deeper accumulation in the understanding of the "specialized, special and new" policy and the cognition of enterprises.

At present, through the integration of banking, securities, private equity, trust, insurance and other financial license resources, CITIC Financial Holding has initially formed a service model of "one-point intervention and multi-point response", and has built a full-life cycle open financial service for specialized and special new enterprises. Through integration and efforts, 5,276 national-level "specialized, special and new" enterprises have been served, with an annual increase of more than 1,000 and a coverage rate of 58.7%, an increase of 11 percentage points from the beginning of 2023.

CITIC securities firms have also established a sound industry research system, laying a solid foundation for drawing an industrial map and accurately covering specialized and special new customer groups. Now, relying on the financial holding platform, through the three toolboxes of collaboration, products and think tanks, the four major battles of customer service, investment services, regional improvement and platform construction are launched.

Ma Yao, rotating chairman of the investment banking business sub-committee of CITIC Financial Holding Wealth Committee, executive member of CITIC Securities and director of the investment banking committee, introduced that under the overall framework of CITIC Financial Holdings, CITIC Bank, CITIC Securities, CITIC Construction Investment Securities, CITIC Trust, CITIC Prudential Life Insurance and other member companies focus on the goal of "one CITIC, one customer", give full play to the market-leading product and service strength and experience of each subsidiary in the capital market IPO (initial public offering) and refinancing, bonds, REITs and other fields, and jointly build and share through marketing channels. Comprehensive planning of products and services, and the sharing of think tank resources, etc., continue to improve the "one-stop" comprehensive financial service capabilities for the various needs of customers.

"This kind of service capability and effect is difficult for a single financial institution to achieve. Ma Yao believes that the joint force formed by the subsidiaries through the financial holding platform will further empower the development of the business capabilities of the subsidiaries, strengthen the efficiency and implementation of the national strategy, fully focus on serving the real economy, and also achieve the first place in many markets such as IPO and refinancing, bond underwriting, and REITs issuance, so as to create value for customers.

From the perspective of customers, many enterprises often have very complex and diversified financial service needs. It may also involve upstream and downstream industrial chains, which puts forward higher requirements for financial products and services.

CITIC Financial Holding has grasped the diverse needs of customers, and established an "N+1+1" strategic customer and entrepreneur customer integration service model under the principle of "one CITIC, one customer". Integrate the resources of the subsidiary "commercial bank + investment bank + private bank + investment + think tank" to provide customers with comprehensive financial solutions.

At present, the member companies of the Investment Banking Business Sub-committee of CITIC Financial Holding Wealth Committee have completed benchmark projects such as COFCO Fulinmen Pilot Project, AVIC Electronics Share Exchange and Merger of AVIC Electromechanical Project, and China Porcelain Electronics Major Asset Restructuring Project, and in the process, they have continuously optimized the strategic cooperation model of "total to total".

Taking Huawei, one of CITIC Financial's first strategic customers, as an example, the "CITIC-Huawei Commercial Joint Innovation Center" was officially established in 2023 to cooperate and innovate in the fields of vehicle ecology, smart agriculture, and smart energy, and combine CITIC's advantages in the scenario of "full financial license + wide industrial coverage" with Huawei's advantages in technology research and development.

From the perspective of entrepreneurs, traditional financial services are mostly single-point docking, and once entrepreneurs have financial needs, they can only contact financial institutions such as banks, securities, trusts, and insurance one by one, lacking the integration and coordination of cross-institutional services, and the service quality and efficiency are relatively low.

In 2023, CITIC Financial Holdings has established 7 regional entrepreneur offices in Suzhou, Shenzhen, Hong Kong, Taiyuan, Nanjing, Guangzhou, and Chongqing to serve private enterprises more effectively and promote the entrepreneurial spirit.

Integrate product channel resources to help individual customers allocate assets

In terms of product management capabilities, CITIC Financial Holdings has identified risks from a more comprehensive perspective through the perspectives of different institutions, and at the same time explored market opportunities, forming a richer and more diversified product map and building more professional asset allocation capabilities.

"CITIC Youpin" and "CITIC Chuangpin" are born based on this concept. Taking the series of "CITIC Premium Products" that have been released since 2022 as an example, it is the first project implemented under the new concept and new mechanism after the establishment of CITIC Financial Holdings, and it is also a typical case of CITIC Financial Holding hoping to "build an ecosystem and create value together" with its partners.

Shi Benliang, rotating chairman of the asset allocation sub-committee of CITIC Financial Holding Wealth Committee and member of the executive committee of CITIC Securities, said that unlike a simple institutional selection of products, "CITIC Premium Products" is a product jointly selected by the subsidiaries of CITIC Financial Holdings, and everyone jointly formulates access standards, evaluation systems and exit mechanisms.

Lv Tiangui, Rotating Chairman of the Retail System Sub-Committee of CITIC Financial Holding Wealth Committee and Vice President of China CITIC Bank, also emphasized that we should integrate products, channels and service resources to build an open ecological platform - "CITIC Fortune Plaza" to meet the all-round needs of individual customers such as investment and financing.

Through this "square", the official platforms of 10 companies, including China CITIC Bank (including credit card center), CITIC Securities, CITIC Securities, CITIC Trust, Huaxia Fund, Baixin Bank, CITIC Consumer Finance, CITIC Construction Investment Futures, CNCBI Wealth Management, and CITIC Academy, are connected on the wealth side. When customers log in on any platform, they will see this "square" in a prominent position and click to enter, truly realizing "one CITIC, one customer". CITIC Fortune Plaza strictly fulfills the requirements related to the protection of consumer rights and interests, attaches great importance to compliance management, and implements consumer protection and compliance requirements through the establishment of systems, clarification of responsibilities, and post-event inspections. By providing customers with a complete view of assets, comprehensive investor education, one-stop customer service portal and other means, it effectively promotes the protection of consumer rights and interests, and improves the comprehensive service level for customers.

From an external point of view, through the construction of a unified wealth platform, the wealth side connects hundreds of millions of customers, and the asset side covers different categories to meet the long-term, cross-market, and multi-category wealth management needs of customers, and can provide customers with diversified products and services to achieve customer attraction, traffic aggregation and value enhancement.

From an internal point of view, the construction of the platform is also an API ecological engine, creating an open service ecology through "bringing in + going out", relying on the AI intelligent engine, using digital technology to empower the service process of subsidiaries, and establishing an intelligent service system, so as to provide new functions for building "smart financial control".

CITIC Financial Holdings' New Mission: Promoting "Big Circulation" with "Small Circulation"

In the context of China's economic development, wealth management is a connector between multi-level social financing and residents' wealth, and it is also an important way to promote the formation of a benign interaction between "finance, science and technology, and industry" and build a new development pattern.

Whether it is from the perspective of "big wealth management" or the scope of the entire financial market, CITIC Financial Holding is a unique sample.

On the one hand, CITIC Financial Holdings has connected more than 20 financial subsidiaries at all levels, including CITIC Group, at home and abroad, and expanded to more than 100 partners. At present, the service covers nearly 200 million individual customers and more than 1.2 million corporate customers.

At the same time, CITIC Bank, CITIC Securities, CITIC Trust, CITIC Prudential Life Insurance, China Asset Management, etc., which were born out of China's leading "industrial + financial" integrated groups, are leaders in vertical industries such as wealth management and asset management.

It is also based on this "industry + finance" gene that CITIC Financial Holding has a deeper experience accumulation and cultural inheritance of "financial services for the real economy", which also makes its understanding of large wealth management and layout different from its peers.

Cao Guoqiang, general manager of CITIC Financial Holdings, emphasized that CITIC Financial Holdings has put forward the concept of "three-ring value chain", that is, to open up the collaborative operation of wealth management, comprehensive financing and asset management, and the task of the wealth committee is to truly operate the three-ring value chain and form an efficient model integrating decision-making, management and promotion.

In the context of China's economic development, it can connect the development of the real economy to the general cycle of public investment and financial management.

For example, in response to the spirit of the Central Economic Conference and actively engaged in the virtuous cycle of science and technology, industry and finance, CITIC Financial Holding has been actively deploying, taking advantage of the full financial license and global layout to provide customers with all-round and integrated comprehensive financial services, and establishing a specialized and special new brand of CITIC services.

It can be seen that on the road of exploring "financial services for the real economy and helping the people to achieve common prosperity", CITIC Financial Holding is constantly polishing new models and new samples.

Relying on a large wealth management system and deeply participating in the general cycle of promoting economic development, this is the underlying development logic and higher development goal of CITIC Financial Holdings, as well as its mission and responsibility as a state-owned financial enterprise.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.