Why is there frequent early termination of bank wealth management?

Mondo Finance Updated on 2024-01-31

Affected by macroeconomic, market and emergencies, it is normal for bank wealth management products to change their performance, especially in recent years, the global economic environment is complex, the financial market is volatile, and there are many early termination of wealth management products.

In the long run, wealth management companies should continue to improve their investment research capabilities and investment strategies, and enhance their ability to allocate large types of assets. At the same time, we should continue to strengthen investor education to help customers rationally understand the risk-return relationship and bring investors a better investment experience.

Recently, many investors have reported receiving SMS messages from banks that their bank wealth management has been "terminated early". For example, a bank wealth management subsidiary issued four announcements in a day, stating that according to the market and investment operation, in order to protect the interests of investors to the greatest extent, after prudent assessment, its four wealth management products were terminated early.

In 2023, there will be more cases of early termination of wealth management products by wealth management subsidiaries of banks. According to the data, more than 2,000 wealth management products have been terminated in advance in 2023, most of which are fixed-income products, and the risk levels are mainly R2 and R3.

Talking about the reasons for the early termination of some wealth management products, some people in the industry believe that the current bank wealth management has entered the era of net worth, and the early exit of wealth management products may be a way for bank wealth management subsidiaries to adapt to net worth management.

Affected by macroeconomic, market and emergencies, it is normal for bank wealth management products to change their performance, especially in recent years, the global economic environment is complex, the financial market is volatile, and there are many early termination of wealth management products. Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, said that the performance of some wealth management products may deviate from the expected returns, so some institutions choose to terminate related products early, which will help reduce potential losses and better protect the rights and interests of investors.

Dong Ximiao, chief researcher of Zhaolian and part-time researcher of the Institute of Financial Research of Fudan University, said that sometimes bank wealth management is terminated early to protect the rights and interests of investors. With the continuous improvement of the regulatory system of the wealth management market, in order to standardize the operation and management of wealth management products and better meet the requirements of the system, some wealth management products may be terminated in advance. Affected by the previous two "net breaking tides", the risk appetite of some investors has declined, and the demand for redeeming wealth management products has increased significantly. In addition, the volatility of the financial market has intensified, the difficulty of investing in wealth management products has increased, and the net value has withdrawn, which may also trigger the early termination clauseAffected by multiple complex factors, the uncertainty of the future investment income of wealth management products has increased, and some wealth management products choose to terminate their operations in advance in order to realize the existing returns.

In the announcements of early termination of products issued by the wealth management subsidiaries of many banks, there are similar expressions such as "market conditions" and "protecting the interests of investors". Zhou Maohua said that from the perspective of institutions, under the condition of maintaining information transparency and smooth customer communication, some institutions choose to terminate relevant wealth management products in advance, which will help save operating costs and reduce potential losses. From the perspective of investors, the proportion of products that are terminated early is relatively small, and institutions can flexibly adjust products according to changes in the macro environment, which can better protect investors and enable them to stop losses in time.

According to Liu Yinping, an analyst at the Rong 360 Digital Technology Research Institute, the bank's wealth management subsidiaries chose to terminate the operation of wealth management products ahead of schedule, reflecting the sluggish investment environment on the one hand, and showing that the asset management level of the bank's wealth management subsidiaries still needs to be further improved.

In the long run, wealth management companies should continue to improve their investment and research capabilities and investment strategies, and in the context of increasing global uncertainties and pressure on macroeconomic operations, bank wealth management should build an effective all-round research system, strengthen the management of net worth fluctuations, timely study and judge macroeconomic and financial market trends, and improve the ability to allocate large types of assets. At the same time, we should continue to strengthen investor education to help customers rationally understand the risk-return relationship and bring investors a better investment experience. Dong Dannong, a researcher at Puyi Standard, said.

In addition, Dong Ximiao reminded that at present, most wealth management products have relevant provisions for early termination, but investors often do not notice that with the increase in early termination of wealth management products, bank wealth management subsidiaries also need to remind investors in an appropriate way, and explain the reasons for early termination, and do a good job in the payment of relevant funds and aftermath.

Next, the wealth management subsidiaries of banks need to continue to strengthen investment education and cultivate investors' long-term investment and value investment concepts. In addition, institutions also need to further improve their asset allocation capabilities and risk management capabilities. Liu Yinping said. (*Reporter Su Xianggao Yang Jie).

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