Market demand is "stable" first, and finding the right product positioning is th
2024-08-14
154 CommentsThe development history and business characteristics of China's asset management industry are deeply rooted in the evolution of the national economy and financial markets. From the earliest issuance and subscription of government bonds, to the establishment of exchanges for stock trading, and then to the emergence of various public and private fund products, and the first issuance of wealth management products by commercial banks... to date, China's asset management industry has gone through several decades of rapid development, which is closely linked to the rapid economic development and the accumulation of residents' wealth in China.
With the "net value" transformation initiated by the 2018 asset management regulations, what is the truly diversified asset management tool that matches the needs of the general public, and how to effectively meet the public's demand for steady wealth appreciation has become an important issue for banks and many asset management institutions to deeply consider and explore. From the practice of bank wealth management in recent years, focusing on the real needs of investors and finding the positioning of product characteristics and differentiation is the key to the industry's breakthrough.
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I. Product is King, Finding Industry Positioning is Urgent
China's bank wealth management companies are born from commercial banks, managing products migrated from the original bank wealth management, and they naturally have business characteristics and mass base that are closer to depositors. In addition, before the introduction of the asset management regulations, the wealth management customer base was accustomed to the "what you see is what you get" investment experience, which made the bank's large customer base have an "deposit substitution" inertial cognition for wealth management.
With the advent of the full net value era, bank wealth management has fully transformed into net value-type products with non-guaranteed floating returns, and the product's returns are directly linked to market performance. However, against the backdrop of the bank channel advantage, there are many low-risk preference investors in the basic customer base of bank wealth management who are converted from deposit customers and pursue high certainty and stable returns. They have not yet been psychologically prepared and have not changed their investment concepts in the short term, and their understanding and acceptance of the "net value transformation" are temporarily lagging behind the transformation speed of bank wealth management. Especially when the market fluctuates, the change in the net value of wealth management products has caused many investors to react strongly and accelerate irrational redemption, which affects the trust of investors in bank wealth management products and institutions, and is not conducive to the long-term and healthy development of the industry.
It is precisely because of the unique development background of bank wealth management and the natural attributes of customer group needs that it is different from other types of asset management products, and does not take the pursuit of maximum returns as the core task. Starting from the real needs of customers, providing investors with long-term stable returns is the first consideration for bank wealth management companies. Compared with the increase in returns when the market rises, maintaining stable performance in market anomalies is the key to becoming the first echelon of bank wealth management. Therefore, wealth management institutions should give full play to channel advantages, deeply explore customer needs, accurately depict customer portraits, and design more high certainty, "absolute returns" as the core concept of high-quality products.
II. "Stability" is the Top Priority, Building a Characterized Product System is Key
According to the monitoring data of Puyi Standards, as of the end of April 2024, there are more than 57,000 net value-type wealth management products in the entire market, among which fixed-income products account for as high as 93%, and secondary (medium and low) risk products account for 75%. It can be seen that fixed-income products occupy an absolute position in the product map of the bank wealth management market. On the one hand, the main customer base is mostly individual investors with lower risk preferences, and the income composition characteristics of bond investments and the long-term stability of the bond market make fixed-income wealth management products widely popular; on the other hand, bank wealth management institutions have built a mature process mechanism and accumulated rich experience in fixed-income asset investment and product design, forming a unique business advantage.
However, at the same time, the current situation of homogenization and lack of refinement of bank wealth management products cannot be ignored, and clarifying product positioning and building a diversified product system is a problem that the wealth management industry needs to solve urgently. The existing product shelves may not be able to meet the increasingly diversified and personalized investment needs of the people, and wealth management institutions must find new paths to provide richer and more innovative wealth management solutions.In response to the public's pursuit of high certainty and stable returns, Ping An Wealth Management has acted in accordance with the trend, adhering to a customer-oriented approach and refined management. With the product layout philosophy of "increasing the minimum performance threshold rate and providing a long-term experience of absolute returns," it aims to safeguard the financial well-being of the people and achieve absolute returns. It has created a main product line that truly suits domestic wealth management clients, offering a better investment experience through multi-asset and multi-strategy applications. Ping An Wealth Management clearly recognizes that risk management and drawdown control capabilities during market fluctuations are more critical than the ability to generate returns during market upswings.
In terms of internal research and decision-making, Ping An Wealth Management has established a strict operating mechanism. This includes conducting market competitiveness analysis, investment opportunity assessment, customer demand research, and risk assessment, ensuring that product development meets market demands and customer expectations. Starting from the analysis of customer needs and sales opportunities, through close cooperation between investment, product departments, and sales teams, as well as the deployment of the sales management working group, a complete and rigorous internal research and decision-making mechanism has been formed, ensuring the quality and market adaptability of wealth management products.
In terms of product system construction, Ping An Wealth Management has built its unique product system based on four dimensions: asset categories, product forms, risk levels, and open periods. From cash-like to equity-containing assets and multi-asset strategies, including fixed income, fixed income+, and mixed categories, Ping An Wealth Management products are extensive, diverse in form, flexible in terms, and fully match the diverse needs of different types of investors. Looking forward, Ping An Wealth Management will continue to strengthen the layout of fixed income+ products, further enrich the product matrix through multi-term management strategies, and enhance the allocation of equity-containing assets to provide customers with a better return experience.
For the investment management of different categories of products, Ping An Wealth Management emphasizes professional division of labor and has equipped multiple teams for refined management.
In the large fixed income investment sector, Ping An Wealth Management has created multiple teams responsible for different product series management. The fixed income team mainly manages fixed income products with standard bonds as the mainstay; the cash team manages cash products; the mixed investment team, under the direction of absolute returns, strengthens research on the trends of major asset classes and asset allocation strategies, and carries out mixed investments through multi-strategy methods.
In the equity-containing investment sector, with the continuous introduction of multiple favorable policies for the capital market in China, the dividend and bonus advantages of some segments of the capital market have become apparent. Ping An Wealth Management is optimistic about its future growth space and has created multiple teams, including multi-asset investment, quantitative investment, and structured investment, to manage the corresponding product series.
Based on customer needs and risk preferences, Ping An Wealth Management insists on the characteristics of "active, stable, and excellent," further subdividing the product matrix into cash+, low-volatility fixed income, medium-low volatility fixed income, and medium-volatility fixed income, and has polished several flagship product series with outstanding performance. Among them, the cash management products represented by the "Daily Growth" series have established a good reputation among investors; the low-volatility fixed income products represented by the "Excellence and Stability" series, with a core equity position of 5%-10%, meet the needs of wealth management clients. Since the end of 2023, Ping An Wealth Management has launched a flagship equity-containing product - the "Star Profit" series. The three one-year fixed-open products have been established one after another in the past half year, with an annualized return of over 4% and a maximum drawdown of only 0.1%. It is understood that most of the positions of this series of products are invested in stable coupon-type assets, and the income enhancement part, in addition to the allocation of equity-type assets, also achieves diversified asset allocation through quantitative neutral strategies and other tools, meeting the more diversified investment needs of investors.
Third, customer orientation and precise product positioning are the keys to breaking the deadlock.
With the continuous construction of new asset management formats, the asset management industry is moving towards a new stage of development with distinct features and a hundred flowers blooming. The concept of "customer-centric" has gradually become a consensus in the industry. Keeping up with market demand and creating high-quality products with clear positioning is the future "royal road." Adhering to the fundamental purpose of "safeguarding the growth of residents' wealth," accurately positioning products, and building a distinctive product system have become the key to breaking the deadlock in bank wealth management.
In terms of construction ideas, Ping An Wealth Management's practical experience is one of the paths that wealth management companies can learn from - closely integrating the construction of the wealth management product map, focusing on creating a product line dominated by the goal of absolute returns, managing drawdowns and volatility by clarifying return and volatility targets, and providing stable investment options for customers with medium and low risk tolerance.When constructing a product portfolio, financial institutions must ensure consistency between product positioning, investment strategies, and customer perception. First and foremost, financial institutions need to clarify the risk-return characteristics and drawdown control objectives of each type of product to ensure clear and precise positioning. Secondly, based on the clear positioning, financial institutions need to formulate investment strategies that match through digital system monitoring or active management methods. Lastly, financial institutions also need to maintain consistency in subsequent investment strategy execution and customer communication, which is particularly crucial when the market experiences fluctuations. By conducting continuous product performance monitoring and tracking, and adjusting strategies in a timely manner to respond to market changes, financial institutions can better meet customers' fundamental needs for stable investments and help investors achieve the goal of preserving and increasing wealth.
In the future, financial institutions need to focus on the characteristics and needs of segmented financial customer groups, use innovation as the engine, and digital technology as the driver, to strengthen risk management and market adaptability, provide high-quality products and services, meet the increasingly diversified wealth management needs of residents, and promote the sustainable and high-quality development of the industry.