Three years after landing, the scale of existence exceeded 100 billion yuan, how about the development of pension financial management that has attracted much attention?
In September 2021, the former China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Launching the Pilot Program of Pension Wealth Management Products, selecting "four institutions in four places" to carry out the pilot, namely ICBC Wealth Management in Wuhan and Chengdu, CCB Wealth Management and CMB Wealth Management in Shenzhen, and Everbright Wealth Management in Qingdao to carry out the pilot of pension wealth management products. In December of that year, the four pilot institutions officially issued the first batch of four pension wealth management products. In February 2022, the former China Banking and Insurance Regulatory Commission (CBIRC) expanded the scope of the pilot to 10 cities and 11 wealth management companies.
In the three years since the launch of the pension financial management pilot, the operation has been generally stable, and the pension financial products have become one of the most important third pillar pension financial products in the mainland. According to recent data released by the State Administration of Financial Regulation, as of the end of May 2024, a total of 51 pension wealth management products have been issued, with an amount of 103.1 billion yuan and a total of 470,000 investors. 23 products of 6 wealth management companies were included in the list of personal pension wealth management products, with an amount of 4.5 billion yuan and a total of 410,000 investors.
However, the stable operation of pension financial products has been very "low-key" since last year, and no new products have been issued for more than a year. The reporter learned from China Wealth Management Network that among the 51 products, most of the products will be issued in 2022, and only 1 product will be issued in 2023, namely the "IB Wealth Management Anyu Five-Year Closed No. 3 Fixed Income Pension Wealth Management" issued by IB Wealth Management, and the fundraising time of the product is from January 10 to January 18, 2023, while there will be no product issuance in 2024.
For the reasons for the "stagnation" of the issuance of pension wealth management products, industry experts believe that it may be affected by many factors: first, the investment period of pension wealth management products is long, generally 5 years, and even the product period is as long as 10 years, and the liquidity is relatively weak, which affects the investment enthusiasm of investors; Second, pension wealth management products should pursue higher returns while maintaining stability, and the range of underlying assets is limited, which is difficult to meet diversified investment needs; Third, the distinction between pension wealth management products and ordinary wealth management products is not high.
In response to this phenomenon, Wang Yifeng, chief analyst of the financial industry of Everbright Securities, said that while the liquidity of long-term closed-end pension wealth management products is relatively low, if it is difficult to compensate investors with sufficient returns, the attractiveness of the products will decline accordingly.
It is worth noting that the annualized rate of return of pension financial products, which has always been known for its stability, has also fluctuated greatly in the past month. According to data from Puyi Standard, as of September 5, the scale of 51 pension wealth management products was 102.747 billion yuan, with an annualized rate of return of 2.7372% since its establishment, and an annualized rate of return of -2.3718% in the past month, which is far lower than the performance benchmark presented by the product when it was established. The reporter inquired about China's wealth management network and found that the overall performance of the current pension financial products has not broken the net, and the lower limit of the performance benchmark set by these products is mostly 5%, or even more than 5.8%, and the upper limit is 7%-10%.
Xiao Zhao, who works in Beijing, told reporters that he has held a five-year fixed-income pension wealth management product for more than two years, and the annualized rate of return since the establishment of the product is 2.66%, but the yield has fluctuated greatly in recent January, with an annualized rate of return of only -4.88%. The benchmark for performance in the product fundraising stage is 5.8%/year-8.0%/year.
"The performance benchmark does not constitute a commitment to the income of financial products, but the actual annualized rate of return is relatively large and my psychological expectations are relatively large, and the closed period of pension financial products is relatively long, I am afraid that I dare not invest too much in case of urgent money." Xiao Zhao's concerns are actually the common voice of many investors, and the industry has always been calling for optimizing the arrangement of the pension financial management system.
Recently, the State Administration of Financial Supervision responded to hot topics such as improving the liquidity of pension wealth management products, enriching the supply of long-term products, and improving risk protection mechanisms such as income smoothing funds in a reply. The State Administration of Financial Supervision requires that the pilot wealth management companies adhere to the prudent investment and operation of pension wealth management products, including but not limited to adopting a scientific, reasonable, mature and stable asset allocation strategy, prudently investing in non-standardized creditor's rights assets, improving risk protection mechanisms such as income smoothing funds, and implementing independent custody of third-party non-parent banks, so as to promote the steady operation of pension wealth management products. At the same time, we will explore and study the mechanism and arrangement to improve the liquidity of pension wealth management products to meet the liquidity needs of investors; Actively support pilot wealth management companies to further enrich product forms and increase the supply of long-term products with a term of more than 10 years under the premise of legal compliance and controllable risks.
In this regard, Wang Yifeng said that the biggest difference between asset management products with pension characteristics and public wealth management products is that the former needs to better match the pension asset allocation needs of different customer groups according to factors such as the life cycle and risk appetite of the target customer group. On the one hand, it can better meet the pension investment needs of young and middle-aged customers, on the other hand, the extension of the term will help the medium and long-term investment layout of wealth management companies, improve the allocation of equity assets to win income enhancement, and reduce the impact of short-term market fluctuations through cross-cycle arrangements, so as to achieve a more stable comprehensive investment return.
Of course, at present, mainland financial investors have a stronger preference for short-term products, and it is also objectively inevitable to actively support wealth management companies to increase the supply of long-term products with a maturity of more than 10 years, while optimizing the product liquidity mechanism arrangement and dispelling investors' concerns about capital liquidity. At present, pension wealth management products have generally established an early redemption mechanism. When an investor suffers from a critical illness or other circumstances, he or she may redeem it in advance in accordance with the provisions of the sales documents of the wealth management product.
Wang Yifeng suggested that, on the one hand, on the basis of the existing liquidity mechanism arrangement, we can further explore and optimize the arrangement of cash dividends and flexible redemption terms, so as to help customers better achieve a balance between long-term investment and liquidity needs; On the other hand, with the further improvement of financial infrastructure construction, we can try to explore the feasibility of pledging and transferring pension wealth management products under specific conditions.
Source | Financial
Edit | Wang Shu