Kim Lee: Third-party wealth management institutions have a lot to offer in the future

On April 9-11, The 2021 Annual Star Glory Ceremony of Xinhu Fortune was held in Sanya, Hainan, where Jin Li, deputy director of the Faculty of Economics and Management of Peking University, chair professor, director of the National Financial Research Center of Peking University, and special adviser of Zhixin Investment Research Institute, conducted an in-depth analysis of "Research on China's Third-Party Wealth Management Industry".

Jin Li believes that in the past ten years, under the background of the continuous improvement of residents' financial management needs and the fact that traditional financial institutions have not yet fully developed their wealth management business, third-party wealth management institutions have undertaken the information intermediary function of connecting the capital end and the asset side, and have grown rapidly. 2020 is an unforgettable year, and the advent of the new crown pneumonia epidemic has also brought a lot of shock to the third-party wealth management industry.

Third-party wealth management institutions are independent of financial institutions such as fund companies, securities companies, insurance companies and banks, and they do not represent the issuers of financial products, but stand in an objective and neutral perspective to help customers manage their wealth. A qualified third-party wealth management institution needs to have a wealth of assets and capital, strong professional ability, and a legal basis to ensure that the responsibilities and rights of "third parties" are clearly demarcated.

At the same time, compared with traditional financial institutions or financial product sales platforms, qualified third-party wealth management institutions need to have the following advantages: First, the origin of wealth management is to pay attention to the needs of customers, provide customers with services to analyze financial status and wealth management needs, help customers judge and select investment products, and implement wealth management solutions. Second, provide tailor-made wealth management services. Unlike traditional wealth management consultancies, independent third-party wealth management institutions do not have the main purpose of selling financial products, but provide overall solutions according to the individual needs of customers. Third, pay attention to investor education. China's wealth population is rapidly improving their wealth capacity, in large part because of the investor education provided by wealth management institutions and practitioners led by third-party wealth management institutions.

He further pointed out that the current transformation pressure of third-party wealth management institutions is very urgent. After the New Regulations on Asset Management in April 2018, the consignment of bank wealth management and trust products requires licensed financial institutions, the consignment sales of public funds and private securities funds require the qualification of public fund sales, and the consignment of insurance products requires the qualification of insurance brokers or agents. "For a small number of third-party wealth management companies with strong fundraising ability and capital strength, obtaining the corresponding consignment license and charging more considerable commissions and back-end shares to the providers of financial products is a good time to expand and strengthen the consignment business."

The sudden epidemic in 2020 has enveloped the world, which has also profoundly affected people's demand for professional wealth management business at multiple levels, making the wealth population rethink how to better realize the appreciation, preservation and inheritance of wealth, and the wealth management industry will also enter a new stage. The next 20 years will be a critical period for the vigorous development of China's wealthy class, and third-party wealth management institutions will also have great potential.

Jin Lee also said that the basic principle of "customer-centric" in the wealth management industry, as well as the comprehensive wisdom-intensive business positioning and asset-light operation mode, have become the focus and must be contested for the transformation of retail business, including traditional financial institutions. At the same time, in response to the continuous development of the wealth management industry and the increasingly diversified and personalized wealth management needs of wealth groups, the service capabilities of third-party wealth management institutions need to be improved. For third-party wealth management institutions, stricter and more specialized will contribute to the steady development of the industry in the long run. For Third-party wealth management institutions in China, the model of digital process management and offline professional investment advisory services can meet the in-depth wealth management needs of high-net-worth customers and help improve the coverage of high-net-worth customer services.