In the post-pandemic era, China's wealth management industry has ushered in new development opportunities. By the end of 2022, the personal financial assets of Chinese residents had reached nearly 250 trillion yuan, making it the world's second largest wealth management market. McKinsey**, by 2032, the proportion of personal non-deposited financial assets of China's wealthy and above will exceed 55%, bringing new growth opportunities to the wealth management market.
In this new blue ocean of wealth management, many financial institutions have invested in competing for market opportunities. McKinsey pointed out that it is particularly important to comprehensively promote the transformation of the wealth management business, and suggested that financial institutions should develop a differentiated customer group strategy, such as focusing on serving the entrepreneur group and creating a differentiated value proposition.
As an important part of its "wealth banking" strategy, IB Private Banking has long focused on serving the executive needs of listed companies and growing enterprises. By integrating the advantages of commercial banks and investment banks, we will deepen the linkage between regions and industries, and strive to become a major wealth management bank for domestic entrepreneurs. As early as 2015, IB established the "Xingcheng Shijia" family office in a forward-looking manner, and in 2019, it registered the brand trademark separately to provide integrated and comprehensive financial service solutions to help customers achieve wealth inheritance and sustainable development of enterprises in an all-round way.
"Passing on the torch" is easier said than done
More than 40 years of reform and opening up have brought about the rapid development of the domestic economy, and also gave birth to a large number of energetic entrepreneurs. According to the "Hurun Report 2023 China High-net-Worth Family Cash Flow Management Report", the high-net-worth group represented by entrepreneurs is approaching the peak of wealth "delivery". Time is tight, the task is heavy, and passing on the torch is not easy.
In the process of serving customers, we noticed that the first batch of entrepreneurs who benefited from reform and opening up are approaching their twilight years. Starting a business is more difficult than keeping a business. Many entrepreneurs hope that the successor will think outside the box and lead the company and family to transform agile in the torrent of historical changes. The relevant person in charge of the private banking department of Industrial Bank said.
Not only that, the rapid development of new economy industries such as the Internet, biotechnology, artificial intelligence, and new energy has given rise to a new generation of entrepreneurs, whose average age is around forty or fifty years old, and their children are either young or just entering the society.
In this regard, the relevant person in charge of the private banking department of IB believes that the inheritance across cycles and generations is related to the cultivation of wealth and people, involving entrepreneurship, family values and cultural inheritance, and that a single wealth management, financing or account service alone cannot solve the complex problems, and only by making forward-looking preparations and precise planning from multiple perspectives such as heirs, family governance, legal and tax affairs, and inheritance tools can we truly provide a guarantee for a happy life for the younger generations.
"Xingcheng Family" has a way to break the game
According to the definition of the Family Office Association, a family office is an institution that provides a full range of wealth management and family services for ultra-high-net-worth families, so that the long-term development of their assets meets the expectations and expectations of the family, and can smoothly carry out intergenerational inheritance and value preservation and appreciation.
In recent years, with the slowdown of domestic economic growth and industrial upgrading and transformation, more and more entrepreneurs want to seek wealth management solutions through family offices. The Financial Services Development Council of Hong Kong pointed out in the China Family Office Report 2022 that from a domestic perspective, the first generation of private entrepreneurs is facing increasingly severe challenges in intergenerational succession. According to the 2022 New Fortune 500 Rich List, entrepreneurs aged 50 and above account for 82%;31% are aged 60 and above;70 years old and above accounted for 11%, and the inheritance pressure of private enterprises in the next ten years is imminent. "More than 47 million private enterprises are facing the pressure of concentrated inheritance of the 'dammed lake' brought about by the aging of the first generation of entrepreneurs in the past 40 years of reform and opening up, rather than the intergenerational inheritance of European and American enterprises in the long course of development, so it may bring greater systemic risks, which must be fully valued. As an important infrastructure for intergenerational inheritance in the international mainstream, family offices will play a more critical and positive role. ”
In fact, IB Private Banking is keenly aware of the changes in customer needs and provides comprehensive, professional, customized and sustainable services through the family wealth management brand "Xingcheng Shijia". Founded in 2015, the family office focuses on the needs of ultra-high-net-worth clients for family wealth protection and inheritance, customized wealth management, family business and capital market, and provides solutions covering investment management, asset allocation, risk diagnosis and isolation, wealth protection and inheritance, corporate governance, charity and public welfare.
In 2019, IB Private Banking registered the brand trademark of "Xingcheng Shijia", creating a precedent for the registration of family office brand trademarks in China. At present, IB Private Banking has set up "Xingcheng Shijia" offices in branches across the country, and has established a comprehensive and professional team composed of head office offices, investment consultants of head offices and branches, private bank account managers, trust and family offices, internal and external legal and tax experts, and value-added service teams, so as to provide customers with long-term, stable and professional services under the common brand of "Xingcheng Shijia". Taking personalized inheritance as an example, the "Xingcheng Family" family office considers the pros and cons of various inheritance tools, and selects financial service solutions that meet the diversified inheritance needs of customers, such as using family trusts to provide personalized services such as estate planning, risk isolation, asset allocation, children's education, family governance, and charity, and realizes the protection and inheritance of family wealth through professional portfolio management (figure below).
Keep working on the "next shot".
As the first joint-stock bank private banking institution in China, IB Private Banking has always adhered to the "people-oriented" principle of wealth management, given full play to the advantages of "commercial bank + investment bank", built a diversified market of "domestic + overseas", "online + offline" closed-loop services, and a "financial + non-financial" service system, and made every effort to build a boutique private bank with distinctive IB characteristics. As of the end of November 2023, it has nearly 70,000 private banking customers and an AUM of nearly 900 billion yuan.
With the service tenet of "the trust of Xingcheng and the sustainability of the family business", the family office of "Xingcheng Shijia" extends its services to individual entrepreneurs, their families and enterprises with the innovative model of the capital market, and the service content is expanded from high-quality retail financial services and personalized non-financial value-added services to a comprehensive and one-stop "people's enterprise" comprehensive service. On the one hand, while carrying out hierarchical management through the scale of customer assets, customer portraits are generated according to the customer's natural attributes, industry attributes, job attributes, asset allocation preferences and other tags, further refining the customer group classification, matching differentiated service solutions, and deepening the business boundaries of the capital market from the multi-dimensional needs of "people-family-enterprise".On the other hand, relying on IB Group's service capabilities and strong asset management capabilities, it is equipped with a strong core team including family office operation management, investment research, investment managers, legal and tax experts, etc., to provide effective empowerment for family office service capabilities.
Looking at the service logic of family offices, the most urgent demand of domestic high-net-worth individuals for family offices is "top-level design", and the institutional thinking must shift from "selling products" to "serving customers" and start taking action. IB Private Banking is committed to building a family office ecosystem, and by integrating partners such as investment banks, trusts, securities firms, industry**, private equity**, legal and tax consulting institutions, overseas branches, high-end value-added service platforms, business schools, etc., to expand the AUM radius of family office customers, and provide real family office level customers with integrated service platforms for investment and financing, financial and non-financial integration, and domestic and overseas business integration.
As various institutions compete on the same stage in the big wealth management track, the competition is fierce, and only by building differentiated products and services can we firmly grasp the major opportunities brought about by the rapid growth of the wealth management market and the reallocation of residents' wealth. "While upgrading your wealth management capabilities end-to-end is a long-term and arduous undertaking, it is the only way to succeed in a more regulated and competitive world. As far as family offices are concerned, the sell-side thinking and marketing method of wealth management of commercial banks can no longer meet the core needs of customers at the family office level, and only by making continuous progress and making further progress can we promote the leapfrog development of wealth management business. The relevant person in charge of the private banking department of Industrial Bank said.
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