No more fee wars: the changing competitive dynamics in brokerage asset management

Securities Times Reporter Xu Ying and Wang Rui

As the reform of public fund fee rates continues to advance, the wave of fee reductions has spread to the securities firm’s asset management industry. The industry currently faces a key choice: compete on fee rates or compete on service? When price is no longer the core competitive advantage, only institutions that truly address customer pain points and create sustainable value can stand firm in future asset management competition.

Investigation by Securities Times reveals that securities firm asset management is forming a dual-track development pattern of “public fund fee reductions and private fund quality improvements,” with reasonable premiums mainly derived from customized services and excess return capabilities. As investor education deepens and channel bargaining power increases, narratives on the liability side are driving a reconstruction of the industry ecosystem.

After the implementation of new regulations on public fund fee rates, Caitong Asset Management announced that starting February 24, it would waive subscription and redemption fees for its direct sales public funds. A relevant person in charge stated that the core logic of fee reduction is “to benefit investors and enhance their sense of gain,” while managers need to shift towards “winning the market with higher-quality and more diverse financial services.”

This approach also resonates in the private fund sector. Fang Qiang, General Manager of Guoxin Asset Management, said that although the company currently has no obvious fee reduction, it is willing to dynamically adjust quotes based on market interest rate fluctuations—for example, by referencing clients’ actual yield levels and the performance benchmark achievement rate of bank channels, deeply binding performance fees with client returns.

Guangzheng Asset Management also stated that under the trend of public fund fee reductions, securities firm asset management should fully leverage its advantages, focusing on “multi-strategy, absolute return, and customized services” to build core competitiveness. They can optimize fee structures and tiers for different products, and by linking fees to product performance, achieve a win-win situation for both parties.

However, from a longer-term and broader perspective, all securities firm asset managers unanimously reject fee competition and prefer to gain reasonable premiums through stable performance and professional services. “In the context of rapid advancement of indexing and tool-based strategies, the scale effect of public funds far exceeds that of securities firm asset management, and simply competing on fees is not an advantageous path,” noted Guolian Minsheng Asset Management. The key to breaking the deadlock lies in maintaining price competitiveness under equal service quality.

To this end, Guolian Minsheng Asset Management is reducing marginal service costs through systematic, engineering-based account management; simultaneously increasing the density and professionalism of post-investment services, emphasizing clear definitions of return and risk characteristics, and process review, transforming transparency and certainty into sources of premium.

Meanwhile, as wealth management transforms further, the bargaining power of banks and third-party platforms has significantly increased, guiding securities firm asset management to reposition its relationship with channels. “The change in bargaining power is real and profound—liability-side entities are actively constructing their own narratives and then using these to infer the asset side,” said Guolian Minsheng Asset Management. Leading wealth management institutions are continuously raising entry standards for product managers, requiring in-depth assessment of their investment research systems, strategic performance, and comprehensive client service capabilities. At the same time, the importance of ongoing marketing has greatly increased, as clients’ investment experience during the product’s lifecycle will directly influence future cooperation opportunities.

Guojin Asset Management believes that the increasing channel bargaining power requires securities firm asset management to focus more on customer needs, providing integrated products and services. For example, channels are demanding deeper and more refined ongoing marketing, which includes offering financial education content and establishing tiered service systems; jointly engaging with channels through online and offline methods to accompany investors; and providing quantifiable service indicators such as response speed and customized report frequency. Guoxin Asset Management also revealed that at the channel level, high-net-worth and institutional clients have very advanced asset allocation concepts, and this trend is strengthening, which means that the product structure of securities firm asset management must also be optimized accordingly.

(Edited by He Chong)

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