A "baton" reshaping the new pattern of wealth management

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Recently, the National Financial Regulatory Administration released the “Interim Measures for the Regulatory Rating of Wealth Management Companies” (abbreviated as the “Measures”). This is another major institutional arrangement following the end of the transition period for the asset management new regulations.

In recent years, the scale of outstanding products of wealth management companies has continued to grow. By the end of 2025, wealth management companies had 33,700 outstanding products, with a total outstanding scale of RMB 3.071 trillion, up 16.72% from the beginning of the year, and accounting for 92.25% of the entire market. However, behind the rapid expansion of the industry, some institutions still have issues such as the need for further clarification of their development positioning, improvement still needed in professional investment capabilities, continued deepening required for the shift to net-asset-value-based management, and risk controls that are not yet sufficiently in place. The introduction of the Measures is intended to guide the industry via a “rating scorecard” to move from extensive development focused on “scale” to refined, quality-oriented operations, thereby strengthening the foundation for steady and sound industry development.

The most notable change in the Measures is the establishment of a scientific and rigorous scoring framework. In the 100-point total score system, “asset management capability” and “risk management capability” each account for a 25% weighting, standing side by side as two pillars that determine the level of the rating. Meanwhile, the asset management scale indicator—once regarded as the industry’s “hard currency”—has been explicitly removed. This adjustment highlights the core positioning of wealth management companies as “entrusted by others to manage assets on behalf of others.” It is conducive to pressuring institutions to enhance their investment research and risk control capabilities, continuously improve investment returns, ensure that funds are allocated with precision, reduce risks, and minimize losses for investors.

Investor rights and interests protection accounts for 15%, which will bring investor protection into practice and focus on addressing long-standing pain points in the industry, such as inadequate customer service and untimely handling of complaints. This will strengthen investors’ confidence in the professional capabilities of wealth management companies, attract more capital into the market, and inject more “fresh liquidity” into real-economy enterprises; in turn, it will also create greater returns for both wealth management companies and investors. Ultimately, it will drive institutions to strengthen compliance and risk control, return to the original purpose of asset management, and achieve a transformation from scale expansion to prioritizing quality.

Differentiated regulation is the biggest highlight of the Measures. The Measures break down rating results into Levels 1 to 6 and an S level. This is an important basis for regulatory authorities to allocate regulatory resources, carry out market access, and implement differentiated regulatory measures. Among them, Level 1 represents excellent performance. For top institutions rated Level 1, regulators will provide policy inclinations in areas such as expanding business scope and piloting new products. Levels 5 and 6 imply the presence of serious risks or major violations. The S level applies to wealth management companies that are undergoing restructuring, have been taken over, or are implementing market exit; they do not participate in that year’s regulatory rating. This “reward the good and punish the bad” mechanism aims to accelerate industry exit through market-based means, push resources to concentrate on high-quality wealth management companies, and avoid “driving out good with bad.”

Guided by the “rating scorecard,” the wealth management industry will move toward differentiated development. From the trend, the Measures will further promote the industry’s concentration to shift toward leading institutions, and the differentiation of smaller institutions will accelerate under rating constraints. For smaller institutions, they must elevate “investor rights and interests protection” to a strategic level. On the one hand, they need to develop in-depth regional featured asset portfolios; on the other hand, they can explore cooperation with leading institutions to make up for their own shortcomings. For investors, besides paying attention to institutional ratings, they should also consider their own risk tolerance and focus on information such as the product’s risk level and investment scope, in order to choose products rationally that fit their needs.

Good policies are valuable only when implemented. Based on strengthening communication with wealth management companies, financial regulatory authorities will carry out rating work in an orderly manner in accordance with regulations, further reshaping the industry landscape and building a risk protection barrier for investors. (Author of a column in China Economic Net: Mo Kaiwei)

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