CFIC Introduction
◆The total asset management scale of public funds has exceeded 31 trillion yuan, but in the past two years, the scale of active equity funds has been sluggish and the performance has been poor.
Original title: Reporter Observation | Let fund marketing return to the original intention, and it is time for fund marketing activities to really return to the original intention. There is no doubt that these are difficult times for mutual funds. Although the latest data shows that the total asset management scale of public funds has exceeded 31 trillion yuan, the scale of active equity funds has been sluggish and their performance has been poor in the past two years. The current difficulties faced by the fund industry have a lot to do with the excessive marketing in the past few years. In the core assets and new energy track market that started in 2019, many fund managers bet on track stocks to the extreme, and the net value of the funds under management also rose by the wind, and fund companies took advantage of the trend of marketing, attracting many investors to buy. However, after the market reversed, the performance of the fund "plummeted", and investors suffered serious losses. In the chain of fund investment interests, there are relevant parties such as fund companies, fund managers, fund distribution agencies and investors. From the perspective of the income source of fund companies, they mainly rely on management fee income, which makes them have a natural incentive to expand their scale. Issuing a new fund when the market is high can produce twice the result with half the effort, and fund companies are happy to follow the trend. Some fund managers choose to bet on the track to attract investors through short-term performance. The biggest problem with the above-mentioned fund marketing activities is that they do not start from the interests of investors, but more from their own interests, and do everything possible to get investors to buy funds. Especially for fund sales channels, as long as investors buy funds, they can get a lot of subscription fees, sales service fees and trailing commission sharing. Few people pay attention to whether investors make money after buying. The failure to "put the interests of investors first" is a direct cause of the current predicament of the fund industry. For fund marketing, the original intention should be to put the interests of investors first, stand in the perspective of investors, recommend suitable products to investors, so that investors can obtain relatively satisfactory returns. Philip Kotler, the father of modern marketing, believed that marketing is essentially value management, the purpose of which is to make all parties involved happy after the transaction. This requires creating real value for customers from the customer's point of view. From the perspective of the marketing process, it covers products, services, brands, prices, incentive mechanisms, customer relationships and other links. Kotler's early definition of marketing was still market-oriented, determining the characteristics and pricing strategies of products and services according to market demand and consumer expectations, and gradually transitioning to the classic 4P theory with the changes in the socio-economic environment, namely Product, Price, Place and Promotion. Later, Kotler put forward the theory of positioning and brand management, and finally refined the core goal of marketing: to create value for customers. At present, fund marketing is still in the market-oriented stage, and the purpose is only to sell the fund. However, fund products are different from ordinary products, and the sale of fund products is only the first step in the entire investment process, which ultimately satisfies investors and allows them to have relatively satisfactory returns. Due to the volatility and adjustment of the A-share market in the past few years, it is not easy for investors to obtain relatively satisfactory returns. But if we put the interests of investors first, we will not market at a high level, nor will we deliberately create various investment "stars". In fact, most of the fund products that make investors lose a lot of money are bought at the market highs in the middle and late stages of the bull market. Judging from the latest development trend of the industry, the current fund marketing field has ushered in multiple changes, whether it is Tencent Video Account, Alipay and other platforms to standardize live broadcast behavior, or banking channels to tighten the agency business, in essence, it is to strengthen the management of investor suitability, and it is also a move to clean up the source of the industry. Don't forget the original intention, you have to always.
Source of this article: Shanghai Securities News
Reporter: Zhao Mingchao
Changes in fund marketing are imminent
The mountain rain is about to come and the wind is full of buildings, and the fund sales field is ushering in a big change: first, live broadcast on large online platforms needs to re-apply for qualifications, and it will be restricted; Second, a number of fund companies announced that they would break up with tail fund distribution agencies and invest limited resources in high-quality channels; Third, the banking channel has tightened the fund distribution business and paid more attention to the management of investor suitability. Industry insiders said that it is necessary to make "the interests of investors first" become the consensus of the industry, and more emphasis is placed on investment advisory services, so as to alleviate the current fund sales dilemma and allow investors to regain trust in the industry. The platform live broadcast was suddenly tightened, and the supervision of fund live broadcast was suddenly tightened. Recently, the signal of a fund company was suddenly cut off during the live broadcast. According to company sources, they originally thought that the content violated the platform's regulations, but it turned out to be because of the lack of specific live broadcast qualifications. A relevant person from Tencent's marketing and public relations department said that the current live broadcast for financial investment is indeed tightened, and public fund companies not only need to apply for financial live broadcast qualifications, but also take measures such as traffic control during live broadcast. For private equity funds, applying for live streaming qualifications is not currently supported. Tencent has recently updated the Access Standards for Financial Science Streaming on Channels (hereinafter referred to as the "Standards"), adding a number of normative requirements and making detailed provisions on on-camera appearances, professional qualifications, and risk warnings. The above standards were first published on January 11, 2023, and the update will take effect on June 18, 2024. The so-called "financial science live broadcast" refers to the anchor's popular science explanation around finance-related knowledge through the live broadcast room, including but not limited to stocks, bonds, funds, banks, insurance, trusts, etc. For fund companies, live streaming has become an important channel for marketing services. The issuance of new funds, sudden changes in the market, and the need to output opinions can directly transmit information to investors through live broadcast channels, so the live broadcast of the platform has become a convenient channel for fund marketing services. Judging from the development status of the industry, many fund companies have made efforts to live broadcast and launched their own live broadcast columns. In terms of presentation form, each fund company also introduces multi-scene, episodic, dramatic and other content. During the live broadcast, in addition to the company's investment researchers, fund companies will also invite sell-side investment research experts in related fields, and some fund companies will also invite well-known people across borders to attract investors to watch. Thanks to the innovation of the live broadcast form and the convenience of transmitting information, the fund live broadcast has attracted the attention of many young investors. However, due to the overall weakening of the market in the past few years, many investors have not made money, so when some fund companies broadcast live, their comment message area was complained by many people. A fund researcher in Shanghai said that just as consumers are prone to impulsive buying when watching live broadcasts, investors are also prone to impulsive buying when watching live broadcasts of funds. Fund companies often show more of their glamorous side during live broadcasts, and under the halo effect, especially in the rising atmosphere, investors are easy to buy fund products impulsively. "If consumers buy clothes that are not suitable, they can return them unconditionally, and there is a hesitation period when buying insurance products, but for fund investment, it not only takes a long time to check whether they are buying correctly, but also it is impossible to return them unconditionally." said the above-mentioned person. In the eyes of industry insiders, the online platform raising the threshold for live broadcast is conducive to protecting the interests of investors, and it will bring new challenges to the marketing service work of fund companies. The tail distribution agency was abandoned, and the fund distribution industry is accelerating the reshuffle. Recently, a number of fund companies have announced the termination of contracts with risky or uncompetitive fund distribution agencies. Yimin Fund announced that since June 7, Haiyin Fund Sales Co., Ltd. has suspended the subscription, conversion and regular fixed investment of the company's funds. Recently, China Securities Construction Investment Fund, Caitong Fund, SPDB AXA Fund, Tongtai Fund, Ping An Fund, etc. have also announced the suspension of sales and cooperation services with Haiyin Fund. It is not only Hywin Fund that has suffered from termination. Sino Asset Management recently announced that it will terminate its cooperation with Beijing Lazy Cat Fund Sales Co., Ltd. in fund distribution business from July 26, including fund subscription, subscription, regular investment, conversion, redemption and other businesses. Manulife Fund issued a number of announcements saying that it reached an agreement with Shenzhen Jinhai Kyushu Fund Sales Co., Ltd. to terminate all public funds under Jinhai Kyushu Distribution Company from June 12. At the same time, since June 12, Beijing Huiteng Huifu Fund Sales Co., Ltd. has been suspended from handling the subscription, subscription, regular and fixed investment and conversion of the company's funds. "In the context of reducing costs and increasing efficiency in the public offering industry, many fund companies have chosen to actively shrink their fronts and choose to terminate their contracts with small and medium-sized fund distribution agencies." In the view of a fund analyst in Shanghai, fund companies have limited resources, some small and medium-sized distribution agencies have weak channel capabilities, and some institutions may also imply risks, so fund companies are more inclined to invest limited resources in high-quality fund distribution agencies. According to the data released by the Asset Management Association of China, as of the end of last year, the scale of "stock + hybrid" public funds held by China Merchants Bank, Ant Fund, Tiantian Fund and Industrial and Commercial Bank of China was more than 400 billion yuan. According to the statistics of Everbright Securities, the "stock + hybrid" public funds of the top 10 fund sales agencies accounted for 55.44% of the total scale of the top 100. While the banking channel strengthens risk management and control, the tail distribution agency is abandoned, and the high-quality distribution agency is also raising the threshold. Recently, a number of banks have not allowed investors to purchase public fund products beyond the risk level. Prior to this, if the risk level of investors is cautious, they can continue to buy high-risk products after the risk warning. Taking China Merchants Bank as an example, after risk assessment, if the investor's risk tolerance level is cautious and he chooses to buy an active equity fund with medium and high risk, he will be reminded that the risk level of the product is higher than his personal risk tolerance, and three options will be provided: first, continue to purchase, which needs to be confirmed by audio and video recording; the second is to re-conduct the risk assessment; The third is to cancel the purchase. According to industry insiders, this indicates that the banking channel is strengthening investor suitability management. The so-called investor suitability management is to allow investors to clarify their own risk tolerance, clarify the risk-return characteristics of different fund products, and make corresponding adjustments according to the changes in their own tolerance. "In recent years, the performance of funds has been poor, and some funds have suffered serious losses, causing dissatisfaction among investors. In particular, the sale of high-risk funds to investors with low risk appetite has caused more complaints. In the view of a fund company's channel, it is a good thing that it is "difficult" to buy high-risk funds in banks, and that the right funds should be sold to the right investors. The above-mentioned person bluntly said that in the past two years, a large number of popular funds have emerged, and these funds attract investors to buy under the banner of star fund managers, and the banking channel is an important driving force behind it. Judging by the results, many investors did not have a good experience. The asset management industry needs to learn from this. From the perspective of the latest trends, public funds are increasingly emphasizing the protection of investors' interests. Chen Xiaosheng, chairman of Shenwan Lingxin Fund, said bluntly that on the sales side, the sales model of the fund industry in the past generally had the problem of excessive fees, and various flows promoted investors to buy at the high point of the market. "In the future, the public fund distribution model will change to the buyer's investment advisory model." Chen Xiaosheng believes that the problem to be solved in the fund investment advisory business is mainly to buy funds from the perspective of investors. Chen Peng, senior strategic adviser at Morningstar, said that the "doping-style" fund sales model, which focuses too much on product promotion, has not adapted to the requirements of the current market and industry development. Fund sales need to change thinking, put the needs and interests of investors first, shift from a product sales-centric sales model to an investor-centric investment advisory model, and ultimately achieve a win-win situation for fund companies, fund distribution companies and investors. In the view of Tao Ronghui, general manager of Harvest Wealth, investor-oriented, buyer-agent wealth management institutions are becoming the consensus of the industry, but there is still a long way to go to truly achieve buy-side investment advisory. "We don't understand our customers well enough and not in place. Taking buying a house as an example, when a customer goes to buy a house, he is generally faced with a salesperson, who will tell you that the house is good, the location is good, the supporting facilities are good, the house type is good, and the price is cheap. Very few salespeople come forward to tell you that there is a problem with the house type, the package is not so good, and it is far from the city center. To do a good job as a buyer's investment advisor, you need the full cooperation of the assessment mechanism, company culture, and values, and you also need to have great courage. Tao Ronghui said.
Source of this article: Shanghai Securities News
Reporter: Zhao Mingchao
WeChat editor: Liu Sile