One stone stirs up a thousand waves.
Recently, some media reported that a local financial regulatory authority orally notified trust companies in its jurisdiction that it was about to introduce relevant policies to suspend the sale of trust products by three parties. In the future, trust products can only be sold independently by trust companies or by banks, and financial institutions supervised by the China Securities Regulatory Commission such as public funds and securities firms will no longer be able to sell trust products.
A person from a trust company told reporters that at present, they have suspended the distribution of trust products through institutions that hold public fund distribution licenses.
In his opinion, the main purpose of the above-mentioned measures introduced by the relevant departments is to eliminate the hidden illegal operations.
According to the trust company source, in the past, there were two main ways for trust companies to cooperate with institutions holding public fund distribution licenses to carry out consignment products, one is that the latter is still responsible for the consignment of products by a third party through "channel services", and the other is that the securities company subsidiary or fund subsidiary will package the trust product into asset management products and sell it by the latter. The former practice violates the relevant regulations of the relevant authorities on the suspension of third-party sales of trust products, while the latter practice has the problem of multi-layer nesting of products, or violates the New Asset Management Regulations.
He bluntly said that with the tightening of financial supervision, in recent years, more and more trust companies have successively suspended the third-party distribution business of trust products, and have built their own sales teams.
However, it is not easy for trust companies to build their own sales teams. On the one hand, trust companies need to continue to increase investment to attract talents to serve high-net-worth customers, and on the other hand, they need to solve the problem of operational stability of the sales team.
"Especially when the trust company encounters a phased suspension of products or a sharp decline in product issuance, how to solve the problem of more monks and less porridge (more sales staff but less product sales) is a big test." The director of the wealth management department of a trust company said to reporters.
In his view, trust companies need to solve the problem of matching cost input and income return when building their own sales team, but this is also a trade-off between short-term investment and long-term cost dilution.
The reporter was informed that in order to optimize the functions of the sales team, more and more trust companies have optimized the positioning of the sales team, on the one hand, they have set up a strategic customer department for institutional investor customers to expand the sales of trust products through ToB sales, and on the other hand, through the introduction of digital technology, enhance the sales team's family trust and other business training, so that they can not only serve more high-net-worth customers and increase per capita production capacity, but also carry out diversified trust business sales to increase income. Ensure the robust operation of the sales team while driving the business transformation of the trust company.
Image source: Visual China
Building your own sales team is no easy road
In the eyes of many trust industry insiders, the introduction of the above-mentioned new regulatory policies is more like the "improvement" of previous regulatory policies.
"In previous years, the relevant departments have restricted the third-party distribution of trust products of trust companies, but the relevant departments have not clarified whether trust products can be sold through institutions holding public fund sales licenses." The above-mentioned trust company person pointed out to reporters. Now, the relevant authorities have clarified that companies with public fund sales licenses approved by the China Securities Regulatory Commission are not allowed to sell trust products, which invisibly gives clear regulatory opinions on the above-mentioned gray operation areas.
A number of trust company people bluntly told reporters that this new regulatory policy has little impact on the sales of trust company products. Because in the past few years, they have successively built their own sales teams to undertake most of the sales of trust products.
However, the trust company has built its own sales team, which is a long road.
The director of the wealth management department of the trust company told reporters that he personally estimated that the sales team of the trust company where he works needs to complete the sales of trust products of about 5 billion yuan per month, and the sales commission can cover the salary expenses of the sales team and the daily operating expenses of the trust company's sales business.
"At present, what I am most worried about is that the trust company has a phased suspension of product issuance or a sharp drop in the number of issuances, which suddenly leads to the situation of more monks and less porridge, and many sales team employees may propose to resign when they see their income shrinking sharply, disrupting the stability and business development plan of the trust company's sales team." He confessed. Affected by factors such as the market environment, the probability of a trust company's phased product suspension or a sharp decline in the number of products issued is not low. Specifically, first, the increase in macroeconomic fluctuations and the continuous compression of non-standard asset business have made it difficult for trust companies to find enough high-quality assets for a while, resulting in a shrinkage in the number of related trust products; Second, the increased volatility of the equity market has led to a decline in the performance of trust products and complaints from investors, which will also cause trust companies to encounter pressure on the suspension of related products.
Previously, due to the sharp decline in the net value of a private placement trust product, which caused complaints from high-net-worth investors, the local financial regulatory department suspended the issuance of the products of his trust company, which suddenly increased the "survival pressure" of the sales team.
According to the head of the wealth management department of another trust company, another major challenge in building a self-built sales team is the shortage of professional talents. After all, on the one hand, the sales team of a trust company needs to accurately understand the personalized wealth management needs of different high-net-worth customers and provide targeted large-scale asset allocation solutions, and on the other hand, it needs to continuously track the fluctuations of portfolio returns and risks of high-net-worth customers, and give optimization suggestions in a timely manner according to the changing trends of the financial market.
"At present, the sales team seems to be more focused on how to sell trust products, and lacks professionalism in the asset allocation of high-net-worth customers and the continuous tracking and optimization of investment portfolios." He said bluntly. Previously, his trust company hired a number of relationship managers from third-party wealth management institutions to fill this gap, but due to differences in their high-net-worth customer service concepts and differences in remuneration packages, the actual results of this approach were not satisfactory.
The new gray operation zone is "getting harder"
The reporter learned that although many trust companies have suspended the third-party sales of products, in the actual operation, a new gray area looms.
The above-mentioned trust company told reporters that although the trust company no longer directly signs product distribution agreements with third-party institutions, in the product sales process, referral business still occurs from time to time.
Specifically, the third-party institutional staff will promote trust products to high-net-worth clients, and once the high-net-worth clients agree to subscribe, the third-party institutional employees will take the high-net-worth clients to the trust company and ask the latter to sign a product investment contract with the trust company.
The trust company privately settles product sales commissions to employees of third-party institutions through personal transfers by sales team employees.
In his view, this means that the third-party distribution of trust products has changed from the original "institutional cooperation" to "individual cooperation", and some third-party institutions "turn a blind eye" to this, because this helps them provide more diversified product choices and retain high-net-worth customers.
However, this practice also often leads to misleading sales behaviors such as "third-party agency personnel exaggerating the yield of products", which makes trust companies complain.
The trust company said bluntly that in this regard, they have added "double recording" to the signing of trust product investment contracts to ensure that high-net-worth customers can fully understand the risk characteristics of trust products.
In his view, the proportion of the referral model in the sales of trust products is relatively low, and the trust company is currently considering introducing another model. That is, third-party wealth management institutions, fund subsidiaries or securities subsidiaries first launch FOF products to raise funds from high-net-worth investors, and then invest in related trust products to help trust companies complete product sales tasks.
"After all, the relevant departments have relatively loose requirements for the nesting of FOF products, which brings a certain degree of convenience to this operation." The head of the wealth management department of the above-mentioned trust company believes. However, in terms of investment costs, the management fees and profit sharing of the FOF investment model are quite high, which makes them reluctant to get involved.
The head of the wealth management department of the trust company said frankly that with the tightening of financial supervision, the best solution for trust companies is still to build their own sales team. Although this will be a long and arduous process, it is a "hard bone" that must be gnawed down for trust companies to strengthen their active management capabilities and accelerate the pace of business transformation.
For more information, please download the 21 Finance APP