Does bank wealth management "migration" increase product risks?

　　Economic Daily · China Economic Net reporter Qian Qingni

　　With the steady progress of bank wealth management transformation, as of September 30, 11 banks have begun to migrate their parent bank products to wealth management subsidiaries, and 6 state-controlled banks have all started the migration work-for investors, How does this "migration" affect personal investment and financial management?

　　I have heard of bank wealth management issues, but never heard that bank wealth management can be “migrated”.

According to statistics, as of September 30, 11 banks have successively migrated their parent bank products to wealth management subsidiaries.

What is interesting is what does this "migration" mean to investors?

Will it increase the risk of purchased products?

Why "migrate" some products

　　According to the “Administrative Measures for Wealth Management Subsidiaries of Commercial Banks” issued by the China Banking and Insurance Regulatory Commission in December 2018, commercial banks can establish wealth management subsidiaries to carry out asset management business on a voluntary basis, and integrate wealth management business into other subsidiary institutions that have already carried out asset management business. After the subsidiary, the bank itself will no longer carry out wealth management business (except for continuing to dispose of existing wealth management products).

Since then, many banks have accelerated their preparations for the establishment of wealth management subsidiaries, and at the same time, the bank’s parent bank has successively started the migration of existing products to wealth management subsidiaries.

　　It is worth noting that for banks approved to establish wealth management subsidiaries, the parent bank’s asset management business and wealth management subsidiary development can be integrated through the following three ways: The first is that the wealth management subsidiary only issues new assets management regulations For the required new products, all stock products remain in the parent bank; the second is that the parent bank relocates part of the stock products that meet the requirements to the wealth management subsidiary; the third is that the parent bank relocates all the stock products to the wealth management subsidiary.

Judging from the current situation, all banks have chosen the second method.

　　In the opinion of many people in the industry, the reason why banks choose the second method is mainly based on the consideration of reducing the risks of wealth management subsidiaries.

"The parent bank migrates some of the stock products that meet the requirements to the wealth management subsidiary, and other products are digested by the parent bank. The main consideration is that the parent bank has a stronger overall strength and its ability to digest products that do not meet the requirements of the new asset management regulations and high-risk products. It is also stronger.” said Lou Feipeng, a researcher at China Postal Savings Bank. “Wealth management subsidiaries have been established in a relatively short time. This migration method helps reduce the risks faced by wealth management subsidiaries and promotes wealth management subsidiaries to quickly become healthy and sustainable. This is also the protection of the legitimate interests of investors."

　　Dong Ximiao, the chief researcher of China Merchants Finance, also said that if all the stock products are moved to the wealth management subsidiary, on the one hand, it will increase the capital pressure on the wealth management subsidiary, and on the other hand, it will also increase the pressure on the rectification of the wealth management subsidiary because it is not in line with the new asset management. The stock products required by regulations shall be rectified during the transition period.

"However, if some products are not migrated, the wealth management subsidiary will start from scratch, and it will not be easy to expand in the short term. Therefore, the parent bank will move the stock products that meet the requirements to the wealth management subsidiary, which will not only help the wealth management subsidiary to scale up, It also helps to reduce the pressure on rectification and capital, which is the best choice." He said.

Will "migration" affect revenue

　　So, what impact does "migration" have on investors?

The answer is: no substantial impact.

　　"Under the supervision and guidance, each bank has made careful arrangements and deployments for the migration of wealth management products to wealth management subsidiaries. During this process, although there will be changes in product sales documents, there may also be changes in wealth management product managers. , But it will not have a substantial impact on product investment and operation, nor will it affect investor returns." Lou Feipeng said.

　　After analyzing the product migration announcements issued by various companies, it can be found that after the relevant wealth management products are migrated to the subsidiaries, the parent bank will change to the agency sales agency of the migrated products, and continue to provide product sales services for investors.

After the product is migrated, sales documents such as relevant product manuals, risk disclosure statements and sales agreements will be updated together.

According to relevant regulatory regulations and industry rules, the registration and issuance date of the product in the national banking wealth management information registration system will be changed to the migration date, but the actual starting date and duration of the product will not be affected, and the product manager will automatically The investor opens a share registration account.

　　Lou Feipeng reminded that investors can pay attention to the announcements and migration dates of each bank in time. If investors accept the product migration, they don’t need to pay too much attention except the timely confirmation of the sales documents; if they do not accept the product migration, they can also choose to redeem the product. .

　　According to statistics from the Puyi Standard, a third-party organization, as of September 30, six state-controlled banks have all started the migration work. Among them, the Industrial and Commercial Bank of China has the fastest migration progress, with a total of seven batches of products, and the number of migrated products ranks among all banks. First, there are a total of 253 products; the migration progress of Postal Savings Bank and China Construction Bank is relatively slow, and the number of products involved is only 2 and 1.

Among the joint-stock banks, China Industrial Bank was the first to start this work, with 6 migration batches and 113 products, second only to ICBC.

Among the city commercial banks, the number of products relocated by Bank of Ningbo and Bank of Hangzhou is also in the forefront; Rural Commercial Bank has not yet started the migration of wealth management products.

　　Why is the "migration" fast and slow?

In this regard, Dong Ximiao said: “The banks that have established wealth management subsidiaries are the leaders in their respective types of banks, and technical issues are not the key issue.” In his view, there are two main factors affecting the migration progress: First, the recognition issues .

Due to the prolonged transition period, the time flexibility for rectification and migration of stock products has increased. Different banks have different understandings of migration work, and thus have different migration schedules.

The second is personnel issues.

Some banks’ wealth management subsidiaries and asset management departments are actually two brands and one set of personnel, and some banks’ wealth management subsidiaries and asset management departments are two sets of personnel. The former will migrate faster.

Which products are "migrated"

　　"The products migrated from the parent bank to the wealth management subsidiary are all net-worth non-principal-guaranteed products that meet the requirements of the new asset management regulations. Different bank products have different characteristics." said Chen Xuehua, a researcher at Puyi Standards.

　　Specifically, in terms of investment maturity, the average maturity of the migration products of each bank is more than 1 year, and the shortest maturity is Bank of Hangzhou, which is 307 days; ICBC, Everbright Bank and Bank of China have a larger maturity span, and short-term products It is related to long-term products, and includes a variety of products with no fixed term.

In terms of risk levels, most banks have relatively low product risks, with levels 1 and 2.

However, the products transferred from Industrial Bank, China Everbright Bank and Industrial and Commercial Bank of China also include high-risk products with a risk level of 4, especially the "Bo-Share Tongli" private equity special series products of ICBC with higher risk levels.

　　In terms of product types, it is mainly fixed-income products, accounting for 81.8%, and equity and mixed products accounting for 7.1% and 11.1%, respectively.

From the perspective of product issuance targets, except for a few products issued to private banks by Bank of Communications, Bank of Ningbo and Bank of China, all other products are issued to individual investors.

　　It is worth noting that industry experts reminded that potential risks still need to be vigilant in the "handover" of wealth management products.

Chen Xuehua said that at present, the financial technology system of the wealth management subsidiary is not yet complete, and the products migrated to the wealth management subsidiary are still sold by the parent bank.

At the initial stage of the development of a wealth management subsidiary, the parent bank's wealth management-related supporting services can be migrated to the wealth management subsidiary to ensure that the subsidiary passes the initial stage smoothly.

In the future, wealth management subsidiaries will need to invest a lot of energy in the BTA (Wealth Management Registration and Transfer System), investment transaction system, valuation system and other technical aspects, as well as the establishment of the subsidiary's own direct sales system and cooperation with external investment advisory institutions to ensure products After being transferred to a wealth management subsidiary, it can operate independently and complete risk isolation from the parent bank.

　　"In addition, under the fund pool operation mode, there are currently a large number of financial products with mismatched maturities in the bank's stock products. In the process of migrating the parent bank stock products to the wealth management subsidiary, it is necessary to ensure the liquidity of the parent bank's retained products The products are divided into batches and withdraw safely." Chen Xuehua said.

　　Qian Qingni