Bank Wealth Management Products' Performance Benchmarks Downgraded Intensively

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Recently, several wealth management companies such as China Merchants Bank Wealth Management, Ping An Wealth Management, Xingyin Wealth Management, Agricultural Bank Wealth Management, Bank of Communications Wealth Management, and China Post Wealth Management have successively adjusted the performance benchmarks of some of their products, with generally significant downward adjustments. Overall, traditional fixed values and interval-based benchmarks are gradually being phased out, shifting toward standardized pricing models linked to market interest rates and indices.

Xue Hongyan, a special researcher at the Shanghai Commercial Bank, stated that this move aligns with the downward trend of market interest rates and regulatory compliance requirements. It helps guide investors to establish rational return expectations and promotes high-quality development of the wealth management industry.

Specifically, Xingyin Wealth Management recently announced that the performance benchmark for “Xingyin Stable Growth ESG Daily Profit Increase No.74 Fixed Income Product” has been adjusted from a fixed annualized range of 1.7%—2.6% to the seven-day notice deposit rate of the People’s Bank of China (currently 0.75%), with the upper limit lowered by 185 basis points. The benchmark for “Xingyin Stable Growth Daily Profit Increase No.100A” has also been changed from an annualized 1.7%—2.6% to the seven-day notice deposit rate, effective March 10, with the same 185 basis point reduction in the upper limit.

Minsheng Wealth Management and Ping An Wealth Management have also followed suit with adjustments. Minsheng Wealth Management’s “Gui Zhu Fixed Income Enhancement Two-Year Open Product No.2” benchmark was lowered from 4.0%—6.0% to 2.6%—3.1%, with the lower limit down by 140 basis points and the upper limit down by 290 basis points. Ping An Wealth Management’s “Qiyuan Stable Profit Daily Open No.25 Fixed Income Product B” benchmark was reduced from 1.50%—2.10% to 1.10%—1.70%, with both upper and lower limits decreased by 40 basis points.

Yang Haiping, a researcher at the Shanghai Financial and Legal Research Institute, said that these adjustments are mainly driven by two reasons: first, compliance requirements— the “Management Measures for Information Disclosure of Asset Management Products of Banking and Insurance Institutions,” which will be officially implemented on September 1 this year, explicitly require disclosure of performance benchmarks, which must remain consistent and not be arbitrarily adjusted after disclosure; second, market fluctuations—since the beginning of this year, bond markets have experienced significant volatility. Continuing to use fixed or interval-based benchmarks could force mid-term adjustments due to market changes, conflicting with new regulations. Linking benchmarks to indices or market interest rates can better adapt to market fluctuations and meet compliance standards.

Yang Haiping believes that these adjustments will mainly impact the industry in three ways: first, further reducing expectations of rigid repayment, consolidating the achievement of “breaking the rigid guarantee”; second, standardizing marketing behaviors of wealth management firms, reducing false advertising and misleading sales; third, encouraging institutions to focus more on comprehensive, full-process investor services.

Tian Lihui, a professor of finance at Nankai University, stated that this adjustment will reshape the industry’s competitive logic, shifting from “attractiveness based on benchmark figures” to “strength in investment management,” thereby pushing institutions to focus on investment research capabilities.

Yang Haiping suggests that ordinary investors should actively adapt to the new performance benchmark presentation format, downplay the weight of benchmarks in investment decisions, and through learning or thorough communication with wealth managers, gain a deeper understanding of the underlying asset volatility, investment strategies, and return relationships of wealth management products. Investors should also consider the brand strength and full-process service level of wealth management companies when making investment choices.

(Source: Securities Daily)