CFIC Introduction
In the future, the valuation method of wealth management products will become stricter, and wealth management will usher in the era of "true net worth", and the signboard of "stability" may be lost.
In the context of deposit interest rate cuts and manual interest payments, some deposits moved to wealth management, boosting the wealth management market to reach the 30 trillion yuan mark.
However, with the strengthening of de-channeling and de-nesting regulatory measures, the space for wealth management funds to help achieve low-volatility stability through special purpose vehicles (SPVs) has been compressed.
Recently, some local regulatory authorities have "window guidance" trust companies, requiring them to rectify the closing price valuation in their wealth management cooperation with banks, especially for investments in which the underlying assets are private placement bonds.
Industry insiders expect that in the future, the valuation method of wealth management products will become stricter, and wealth management will usher in the era of "true net worth".
Outsourcing to stabilize net worth
"Some companies have received guidance from the window that the business of providing closing price valuation services for wealth management can no longer be done in the future, and the existing business also needs to be rectified." A person from a trust company in the north told reporters a few days ago.
According to a number of trust industry sources, this kind of service is quite common in the industry, and the investment varieties are mainly private placement bonds of the Shanghai Stock Exchange, which is also one of the important reasons for the rapid growth of many trust companies in the past two years.
It is understood that a large part of the reason why bank wealth management is entrusted to trust companies and other institutions to do bond transactions is that bond transactions need to open a lot of accounts, and if the product scale is very small, the transaction is difficult to do, and the workload of different accounts is large and cumbersome. In addition, through special purpose vehicles (SPVs) such as trusts and insurance asset management, the demand for low-volatility stability can also be realized.
There are three main paths for low-wave robust implementation. The first is to increase the proportion of assets with no market value fluctuations, such as increasing deposits and non-standard assets; The second is to optimize the valuation methods of assets with market value fluctuations, such as the amortized cost valuation method, the closing price valuation method, etc.; The third is to adopt a smooth trust mechanism to realize the movement of income in different periods.
The person in charge of fixed income investment of an asset management institution in Beijing told reporters that many private bonds cannot be invested in the pool of insurance asset management, which has given birth to the cooperation between bank wealth management and trust companies.
It is understood that last year in the exchange private bond market, the scale of trust holdings increased at the trillion level, and the trust company undertook the influx of wealth management funds under the condition that the standard investment experience is still shallow, to a large extent, the smoothing mechanism and the closing price valuation played a role.
Valuation Law Controversy
"Exchange bonds are mostly negotiated transactions, and the two parties to the transaction privately negotiate the quantity and price and other elements, and trade through the fixed income platform of the Shanghai Stock Exchange." A person from a medium-sized trust company said, "The private placement bonds of the Shanghai Stock Exchange have not released the closing price, so when many valuation systems are set, it is set that if the market cannot be obtained, it is the closing price." ”
According to a recent research report by Kaiyuan Securities, as of July 26, there were 30,477 bonds on the fixed income platform of the Shanghai Stock Exchange, of which 22,430 bonds were closed at 100 yuan for five consecutive trading days, accounting for about 74%. Taking a Shanghai Stock Exchange bond as an example, the net valuation price of the CSE fell rapidly in the redemption wave of the bond market in November 2022, but its closing price was always displayed at 100 yuan.
"The regulator encourages everyone to use third-party valuations such as China Securities and China Bond as much as possible. We have observed third-party valuations before, and they seem to be relatively accurate, but for example, in the stage of bond surge last year, many urban investment bonds, the market transaction has reached more than 3 o'clock, and the third-party valuation is still at 4.5, and there will be a lag in changes. A person in the trust industry said.
"Third-party valuation is a relatively fair value, but it lags behind in some more extreme or fast-changing market conditions, which is why many asset management institutions hope to use various ways to make net worth smoother." The person added, "The market moves ahead of the valuation, and when the investment manager makes the right decision, he will have some negative impact on the product because of the valuation." ”
"How much risk is hidden in the market by using valuation methods to smooth out? This is actually more important. A person in the trust industry in Shanghai said that the valuation deviation is an important issue, "for example, the market price fluctuates from 99 yuan to 101 yuan, and the valuation with the closing price of 100 yuan does not bring much problem." However, if it is a default debt whose value or transaction price has reached 20 yuan, and it is a defaulted debt, it is indeed very problematic to use 100 yuan for valuation. ”
"The better state now is that everyone can use the closing price, and the exchange will improve its market data as soon as possible." The above-mentioned person in the Shanghai trust industry said.
Net worth to real
Behind the above-mentioned window guidance and valuation debate, it also points to the fact that the 30 trillion bank net worth products actually contain "false net worth". Under the norms, many industry insiders expect that the fluctuation of the net value of wealth management products will be more real, and the overall net value fluctuation of fixed income wealth management will increase.
"For wealth management companies, in a low-interest rate environment, the continuously growing wealth management scale is facing greater pressure on asset allocation. Under the regulatory constraints, in order to standardize the operation of wealth management products in the future, it may face the reality of lowering the performance benchmark, and it is necessary to carry out net-worth management of wealth management products in a more standardized manner. Senior asset management industry sources told reporters.
Since the implementation of the new asset management regulations, bank wealth management products have undergone a huge net-worth reform. However, the reporter learned that the market and customers' expectations for the steady income of bank wealth management have not changed with the transformation of product net worth. Investor education still needs to be done.
Many industry insiders believe that the return of wealth management products to "true net worth" is also a good opportunity for investor education. "Promote everyone to accept that the market has fluctuations such a healthy and scientific investment philosophy. In the current context of relatively limited other investable assets, investors need to moderately relax their tolerance for daily fluctuations in wealth management net worth. ”
However, after the transformation of net worth, the premise of "buyer responsibility" should also be "seller responsibility". Industry insiders said that there are still many deficiencies in the information disclosure of bank wealth management, the quality of information disclosure of wealth management products is not good, the completeness and timeliness of disclosure need to be improved, and there is still a lot of room for improvement in "seller responsibility".
Source of this article: China Securities Journal
Author: Xue Jin
WeChat editor: Wang Ziqing
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