Source: Associated Press of Finance
Reporter Cao Yunyi
In April, the scale of wealth management continued to rise, but the pressure behind wealth management products should not be underestimated.
Today, a number of financial subsidiaries lowered their performance benchmarks and rates. Some financial subsidiaries adjusted the accrual rules for excess earnings, or even directly reduced the management rate to 0%. The industry pointed out that the reduction of the performance benchmark of the product would give investors the expectation of a decline in future product income, which might cause some customers to lose. At this time, the bank launched a rate preference, which could not be ruled out for the purpose of retaining customers.
Many experts told the Associated Press of Finance and Economics that the income pressure caused by the scarcity of high-yield assets has become the main problem facing current financial management. The lower limit of performance benchmark shows a downward trend, whether it is for existing or new products. Bank financing is one of the effective ways to resolve the contradiction between assets and liabilities by moderately lowering the lower limit of expected yield of products and actively reducing the cost of liabilities. However, in the future, after the deposit interest rate continues to decline, the financial returns may also continue to decline, which will further reduce the attractiveness to investors.
Several wealth managers cut management fees and performance benchmarks
Recently, a number of financial management subsidiaries announced that they would let investors make profits, and the management rate was reduced to 0.1% on average. Some financial management subsidiaries adjusted the yield of the excess part, and when the annual yield of the product was less than 4%, no management fee was charged, or even directly reduced the management rate to 0%.
On April 18, Everbright Financial released the announcement of preferential rates for a number of financial products, with the management fees reduced to 0.1%, and the sales service fees for I share and K share of some products reduced from 0.3% and 0.26% to 0.05% and 0.01% respectively. On April 17, various fixed income financial products of Xingyin Wealth Management also reduced the rate, and the management fee decreased by 0.1% from the original 0.3%, to 0.05% at the lowest.
On April 18, CCB Financial announced that it would adjust the provision rules for excess performance remuneration of a fixed income financial product. When the annual return rate of the product in a single operation cycle is lower than 4.0%, no excess performance remuneration will be charged; Only when the annualized rate of return within a single operation cycle of the product is higher than 4.0% (inclusive), the excess performance compensation will be accrued at 20% of the part exceeding 4.0%. In addition, CMB Financial also announced that the rate of fixed income financial management plan of Zhaorui Jinding (Gain) Closed No. 3 was adjusted to 0% from April 17.
"Financial management companies generally make appropriate adjustments to the product rate according to the investment environment, the performance of financial management products, and other conditions. Recently, there have been many rate cuts. On the one hand, the investment environment is poor, the net value of financial management products is declining, and financial management companies cut fees periodically to give way to investors. On the other hand, financial management companies actively seize market share and supplement prices with quantity." Liu Yinping, an analyst at Rong360 Digital Technology Research Institute, told the Associated Press of Finance and Economics that rate discounts would be common in the future.
Why do financial management subsidiaries frequently reduce the rate to let investors benefit? There is also the pressure that the product is difficult to reach the performance benchmark. According to the industry, the purpose of lowering the rate of wealth management products is to cope with the decline or slow growth of product net value in special periods, and to make periodic concessions to investors, so that investors can easily obtain performance benchmarks.
West China Securities Tian Lemeng, chief macro analyst, said: "In sales, the performance benchmark of financial products is often used as one of the publicity methods to attract customers. There is a large gap between the actual yield and the expected yield, or hidden dangers of redemption risk for financial products." He pointed out that in March, the actual yield of other products, except for daily products, was lower than the lower limit of the performance benchmark, And the performance inversion of long-term financial products is more significant.
Under the pressure of "asset shortage", a number of financial subsidiaries have recently lowered the performance benchmark of new products. On April 18, CCB Financial released an announcement that since 2024, the bond market has adjusted significantly. The risk-free yield represented by the 10-year treasury bond yield has declined significantly, and the yield level of bond assets has decreased significantly. Therefore, the performance benchmark of CCB Financial Ruixin fixed income products in 14 months is adjusted from 2.6-4.2% to 2.2-4.0%
In addition, Huaxia Wealth Management lowered the performance standards of many of its financial products. Taking Huaxia Wealth Management's exclusive fixed income products for the first three months as an example, the performance benchmark was lowered from 3.15% to 2.95%; Guangda Financial Sunshine Orange Anying quarter opened 5 Hao financial product k from 3.0% - 3.4% to 2.9% - 3.3%.
The lower limit falls below 3%, and the benchmark of performance declines
In the industry as a whole, the performance benchmark of financial products showed a downward trend, especially for products with high performance benchmark lower limit. In March, the average lower limit of benchmark performance of fixed income and mixed products of financial subsidiaries of joint-stock banks fell below 3%.
By product, according to Wisdom Xinhong Financial Research Institute, as of the end of March, the average lower limit of benchmark performance of fixed income products of state-owned bank financial products was only 2.80%, the average lower limit of benchmark performance of fixed income products of joint-stock bank financial products was 2.85%, and urban commercial behavior was 3.15%. The benchmark lower limit of mixed product performance of state-owned banks and urban commercial banks' wealth management subsidiaries also fell below 3%.
Liu Yu, chief economist of West China Securities, said that the decline of performance benchmark of bank financial products was mainly due to the fact that the decline of financial quotation could not catch up with the downward speed of bottom asset income, resulting in the narrowing of the price difference between financial quotation and bottom asset, or even upside down. In this case, bank financing is one of the effective ways to resolve the contradiction between assets and liabilities by moderately lowering the lower limit of expected yield of products and actively reducing the cost of liabilities.
"The income pressure caused by the scarcity of high-yield assets has become the main problem facing the current financial management. The lower limit of the performance benchmark has shown a downward trend, regardless of the existence or new products, but there are still more than 82% of the stock non cash management financial performance benchmark in the market exceeding 2.5%." Tian Lemeng said that, subject to the pressure of the sales side, The speed and extent of financial management to continue to reduce the performance benchmark are also limited, and the performance pressure will continue in the short term.
The industry pointed out that the reduction of the performance benchmark of the product would give investors the expectation of a decline in future product income, which might cause some customers to lose. At this time, the bank launched a rate preference, which could not be ruled out for the purpose of retaining customers. However, investors are not sensitive to the decline of the rate and pay more attention to the performance benchmark. Therefore, the continuous decline will also give investors a negative impression.
"Behind the continuous decline in deposit interest rates, financial returns may continue to decline, investment attraction will also decline, and investors are not looking for many reliable ways to maintain and increase value." Guo Shiliang, an independent financial commentator, told the Associated Press of Finance and Economics that the equity market has not performed well since the first quarter, and the capital risk preference is more cautious, leading to the increase in the scale of bank financial management, However, the pressure on future financial returns will not decrease.
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