Streamlining the wealth management market


BEIJING: China is expected to form a standardised, unified and highly-efficient wealth management market with fair competition and high standards, according to a recent report by Zhixin Investment Research Institute.

The country’s new asset management rules will have a deep impact on its wealth management market, which will enter an increasingly regulated track of development, and will push leading players to become more professional by enhancing the quality of products and services, the China Wealth Management Report said.

As of the end of 2020, assets under management in China’s wealth management sector reached 85.01 trillion yuan (US$13.1 trillion or RM55.4 trillion), up 10.98% year-on-year.

The growth of the wealth management sector in China was backed by government policies such as the 14th Five-Year Plan (2021-25), its continuous, stable and sustainable macroeconomic measures, and the development of regional wealth management centres as a new growth driver in the sector.

It is estimated that investable assets in the country will increase to 300 trillion yuan (RM195.3 trillion) by 2030, up from the current level of 200 trillion yuan (RM130.2 trillion), as the population of high net worth individuals may more than double during the period, said Lian Ping, chief economist at Zhixin Investment and head of the Zhixin Investment Research Institute.

A growing number of leading asset managers will speed up their deployment in the China market as the country has accelerated the opening up of its financial sector since 2018.

More and more asset managers are actively exploring how to provide their clients with personalised one-stop wealth management services across businesses, markets and currencies. At the same time, China is expected to become a frontrunner in developing wealth management technology applications, the report said.

The wealth management sector has made significant contributions to corporate direct financing in support of the development of the real economy – the part of the economy that produces goods and services – as well as China’s economic transition and technology innovation.

Up till now, commercial banks’ wealth management subsidiaries have issued a number of environmental, social and governance-themed (ESG) wealth management products (WMPs), with a focus on supporting green and low-carbon development in the fields of energy saving, environmental protection and clean energy, Pan said. Many experts expect green and ESG-themed WMPs will continue to be popular among investors and regulators.

Looking ahead, Pan advised wealth management institutions to strengthen their capabilities in regulatory compliance, internal control, asset allocation, financial technology and operations with distinguishing features.

In this way, they will strictly adhere to the bottom line of being free of systemic risks. — China Daily/ANN


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