Consumers purchased 5-year wealth management products in 2018 received early termination notice not long ago

　　Why do bank wealth management products "exit" early?

　　Not long ago, Ms. Wang received a notice from the bank that a 5-year wealth management product she bought in 2018 will be terminated early. “It is clear that it will expire in 5 years, and now it will end in a little more than two years. This product has an annual yield. It can be 6%, which is much higher than the current financial management." The Beijing Youth Daily reporter learned that since this year, many investors have suffered the early termination of bank financial products like Ms. Wang.

Obviously it is not due, why does the bank compel "early withdrawal"?

Is it reasonable for the bank to unilaterally "cancel the contract"?

Wealth management products terminated early

The annualized rate of return is as high as 5.5%-6.1%

　　It is understood that the name of the product purchased by Ms. Wang is the 1829-day "Anxiang Changying" ICBC Wealth Customer Exclusive Wealth Management Product, which was issued in March 2018, with a term of up to 5 years. The original expiry date was On March 8, 2023, ICBC issued an early termination announcement. The product expiration date has been advanced to July 29, 2020. The product period has changed from 1829 days to 877 days. The annualized return rate of this product has been 6.1% since its establishment.

　　According to ICBC’s announcement, the 1158-day product of "An Xiang Changying" ICBC Wealth Customer Exclusive Wealth Management Product (Issue 2018-15) was also terminated early, and the product expiration date was changed from July 5, 2021 to July 29, 2020. The product period has been changed from 1158 days to 817 days. The annualized rate of return of this product has been 5.5% since its establishment.

　　Public information shows that the "Anxiang Changying" series of wealth management products are sold for wealth customers, with a risk level of PR3. They are issued in 2018 and the expected return rate is between 5.5% and 6.1%.

　　Industry insiders pointed out that the "Anxiang Changying" wealth management product is an "old product" issued before the release of the new asset management regulations, and it sets an "expected rate of return"; and now the net value "new product" adopts "unit net value" and "performance comparison" "Benchmarks" and other terms have made financial product customers no longer have the psychological expectation of "guarantee capital and return".

Many banks since last year

Early termination of wealth management products

　　In fact, the bank's mandatory early redemption of some wealth management products is not recent, nor is ICBC alone.

　　In November 2019, China Everbright Bank announced on its official website that the bank will stop the "Current Treasure" wealth management service from November 30, 2019, and the balance of the "Current Treasure" will be transferred back to the investor's contract card.

　　In the same month, the Bank of Communications issued the "Announcement on Stopping the Processing of Ward Salary Fixed Investment Portfolio Products" on its official website, stating that in order to implement regulatory requirements, it will stop processing Ward's Salary Fixed Investment Portfolio Products and terminate Ward early on November 20, 2019. Salary fixed investment portfolio product agreement.

　　On May 20 this year, Beijing Rural Commercial Bank announced on its official website that in accordance with the new asset management regulations and the requirements for the transformation of wealth management products, the bank will terminate "Beijing Rural Commercial Bank's "Golden Phoenix Financial Management" on May 20, 2020. Rong Jin Shi Tian Tian Tian Xin Yue enjoys RMB wealth management products".

　　In late August, some depositors of Yealink Bank received a research notice from the bank, saying that they are investigating smart deposit products that rely on file interest, and plan to clear these products before the end of the year.

The previous annualized rate of return of related products was as high as 5% or more.

　　New asset management regulations

　　Depression of illegal inventory financial management

　　In April 2018, the Central Bank issued the "Guiding Opinions on Regulating the Asset Management Business of Financial Institutions", which is the new asset management regulations.

Among them, it is clearly required that bank financial management must break the rigid payment, break the multi-level nesting and prohibited fund pool model, and realize the transformation of net worth, and the capital preservation type and other illegal financial products must be withdrawn.

　　According to various banks, the premature termination of some wealth management products is precisely to comply with the requirements of the new asset management regulations and to promote the transformation of wealth management products.

　　The relevant person in charge of ICBC stated that one of the reasons for the early termination of unexpired wealth management products is that since the release of the new asset management regulations, the bank has promoted the implementation of the rectification of wealth management business operations.

The early termination of some products that do not meet the requirements of the new regulations and are difficult to rectify is also part of this work.

　　The Bank of Communications and Beijing Rural Commercial Bank also stated that it is to meet the requirements of the new asset management regulations and the transformation of the net value of wealth management products.

Pan Guangwei, the full-time vice chairman of the Banking Association, recently stated that as of the end of June this year, the net-worth wealth management products had a scale of approximately 13.2 trillion yuan, a year-on-year increase of 67% and accounted for 53% of all wealth management products.

　　The chief analyst of fixed income at CITIC Securities pointed out that through the issuance of wealth management, it can be seen that banks have already actively adopted various measures to gradually reduce the scale of capital guaranteed wealth management in accordance with regulatory requirements. On the one hand, the proportion of capital guaranteed wealth management has continued to decrease. 30.3% dropped to 9.6%; on the other hand, the overall wealth management issuance period is also shortening, the proportion of wealth management over 6 months has dropped from 29.8% at the peak to 19.4%. This is for the smooth natural transition period. Prepare for expiration.

However, because some old products are affected by investor acceptance, regulatory review and other factors, it is difficult to issue new products to undertake.

The early removal of a batch of non-compliant products has also become a necessary step to promote the transformation of wealth management products.

　　Banks cannot afford the high yields of "old products"

　　The relevant person in charge of ICBC pointed out that since November 2019, market interest rates have accelerated and the sharp decline in the income of new investment products has dragged down the performance of the wealth management investment portfolio.

In order to protect the level of customer income and safeguard the interests of investors, the bank decided to terminate the wholesale bank's products with high expected performance benchmarks in advance.

　　According to the monitoring data of Puyi Standard, in recent years, the yield of bank wealth management products has been in decline. It has fallen for 45 consecutive months, and the average annualized yield has dropped to about 3.75%.

　　According to the analysis by the research team of CITIC Securities, the traditional bank wealth management products default to the "rigid redemption" rule, and the expected rate of return actually becomes the bank’s debt cost, and the bank ultimately obtains a "spread" that exceeds the expected rate of return by operating the funds. "The part is the profit margin of the bank.

The expected yields of ICBC and Yealink’s products are both above 5%, which is significantly higher than the current market average expected yield. Under the just-compliance expectations, the bank’s profit margins have been greatly compressed, and even the costs and returns have been reversed.

　　Take ICBC's 5-year product as an example. Since its establishment, the annualized rate of return has been as high as 6.1%, and the maturity has been as long as 5 years. In the past two years, the market interest rate has fallen sharply. 3%. According to the expected raised scale of 2 billion yuan in the product description of the wealth management, it is equivalent to the bank's annual loss of 60 million yuan for the product.

If interest rates continue to fall for a long time in the future, bank losses will continue to expand.

　　Observed

　　Is the bank’s unilateral termination of contract a “overlord clause”?

　　"The promised five years have expired, and now it has been over two years earlier. Isn't the bank unilaterally breaking the contract?" Ms. Wang was very angry when she received the notice of early termination.

But when she found out the manual for this product in the mobile bank, her aggrieved mood turned into helplessness.

　　It turned out that the product manual clearly stated: "In order to protect the interests of customers, ICBC may terminate this product early in accordance with market changes. Except for early redemption as stipulated in Article 7 of this manual, customers shall not terminate this product early. "

　　In fact, most banks have similar regulations for wealth management products.

Xu Guilin, a partner of Beijing Times Jiuhe Law Firm, said that although the early termination of wealth management products will cause losses to investors, from the point of view of the contract, the bank’s early termination of wealth management products due to changes in laws, regulations or policies is legal and legal. Regular.

Of course, the forced withdrawal of wealth management products is very likely to cause investor dissatisfaction, which will affect the reputation of banks.

Therefore, when banks terminate stock products early, it is best to avoid centralized disposal to ensure a smooth and orderly exit.

　　Mingming's research team believes that in the short term, early termination will have an adverse impact on customers and banks.

For investors, if the redeemed funds are used to buy new products, the current yield of wealth management products will be much lower than the previous yield, and the actual income will shrink significantly; for banks, in addition to paying a large amount of capital in the short term Jin, his own image will also suffer to some extent, and even face the permanent loss of some customers.

However, in the long run, the transformation of net wealth management behind the "strong withdrawal" of products will bring broader prospects to the development of China's asset management market.

　　"Forced Retreat" is not expected to appear on a large scale

　　The research report of Mingming's research team believes that banks are currently responding to the requirements of new asset management regulations to accelerate the reduction of the scale of existing wealth management products. Therefore, early "forced withdrawal" of wealth management products may still occur, but it should not become a common phenomenon.

　　First, the transition period of the new asset management regulations has been extended for one year, stabilizing the expectations of financial institutions.

The transition period of the new asset management regulations is extended to the end of 2021. Banks have more time to digest the stock of old assets, and financial institutions are given more time to cultivate long-term funding sources and improve their ability to issue new products to take over old assets.

　　Secondly, most of the wealth management products issued in the past were short- and medium-term, and banks can wait for them to expire by themselves.

For products that can be successfully exited within 1 year and before the end of the transition period, unless the income inversion is serious, the bank does not need to sacrifice its image in the hearts of investors to terminate the agreement early; finally, a large number of early redemptions will give the bank In the short term, it will bring a relatively heavy burden of repayment of principal and interest, which is not conducive to the stability of bank cash flow.

　　The report also believes that in the product transformation period, more and more old products will be withdrawn after expiration in the future, and it is a foregone conclusion that the illegal inventory of financial management will be gradually cleared.

In accordance with the requirements of the new asset management regulations, such wealth management products will be withdrawn from the market before the end of 2021, and net-worth wealth management products have become the future development direction of bank wealth management.

　　Client funds may be diverted by the fund

　　"If in the future, bank wealth management products do not mention the expected rate of return, and tell customers the net value, what is the difference with the fund?" Regarding the question of Ms. Wang, the person concerned believes that breaking the bank wealth management just after the exchange is in net worth In the process of transformation, strong competitors such as funds and brokerage asset management are bound to usher in.

　　Mingming's research team believes that after bidding farewell to the traditional financial management of rigid redemption, investors will also change the previous "depositor thinking" in the face of new net worth products.

With the reduction of expected return products, investors will increase their risk awareness, develop a psychological preparation for self-financing when purchasing financial products, gradually accept high-risk, high-yield products, and choose matching investments according to their own risk acceptance Financial management.

　　"There is a short-term gap on the supply side of China's asset management industry. We think it is an important opportunity for public funds." Mingming's research team pointed out that considering the gradual decrease in the number of bank wealth management products issued in recent years, the size of fund stock has increased significantly. .

On the one hand, this is because public equity institutions have more experience in the net worth product line, and on the other hand, it is also due to the stronger investment research genes and strategic combination capabilities of public equity institutions.

　　Among all types of public funds, he believes that bond funds and money market funds may be more attractive.

This is because investors in bank wealth management have a low risk appetite, and they are pursuing a steady return on the basis of capital preservation. The relatively low risk of the debt base and the cargo base can meet the above demands.

This has also become the root cause of the “fixed income +” deployment of many public offering institutions this year. More and more asset management institutions are paying more attention to the training of sound product managers.

　　Text/Reporter Cheng Jie