Original title: Zhang Jun et al.: The development trend of the wealth management market in 2024 - the road to a balance between bottom-line security and sustainable development.
The international environment in 2023 has not been improved as expected, although the new crown has come out, the global economic malaise is still continuing, the continuation of the Russia-Ukraine conflict and the Palestinian-Israeli conflict and other geopolitical conflicts, as well as the resulting far-reaching impact on the world, resulting in increased uncertainty, and there is no possibility of substantial changes in fundamentals in the short term, which have profoundly affected the development direction of the wealth management market.
China's high-net-worth individuals and wealthy families (collectively referred to as "wealth groups") have not changed the five basic scenarios of bottom-line security, comprehensive compliance, value balance, sustainable development and system inheritance, and there are more extensive demands in the fields of private wealth management, family (enterprise) top-level structure design, overall improvement of family power, family (enterprise) investment, financing and sustainable development, crisis resolution and dispute resolution, etc., and the wealth management market is still extremely active and bound to continue to grow.
Here are eight important trends to watch in 2024. Of course, these trends are already emerging in 2023 and even 2022, and these trends must not be short-term, but the long-term direction of the wealth management market.
1. From wealth management to value management.
In the wealth management service market, while realizing the preservation and value-added services of wealth of wealthy people, more and more institutions pay more attention to the continuous improvement of family value, enterprise value and wealth value, and begin to pay extensive attention to ESG, innovation and entrepreneurship, sustainable development and other fields, focusing on more long-term goals. As a result, we have noticed that more institutions are positioning themselves as value management to carry out corresponding wealth management services.
2. From the strengthening of the local perspective to the growth of the global perspective.
From a local perspective, wealth management institutions generally continue to improve their service capabilities in terms of systematization, digitalization, ecology and customization. Large financial groups are further deepening the synergy capabilities of various institutions within the group;Law firms such as Dentons and DeHeng have preliminarily completed the layout of family office services in China.
With the development of the global layout of "people, wealth and affairs" of the wealth group, all kinds of domestic wealth management institutions are actively deploying and building overseas institutions and service capabilities, and the collaborative services with overseas institutions have been significantly enhanced, which is also unprecedented.
3. Multi-scenario overall solution starting from key scenarios.
With the prominence of specific key scenarios of wealth management, the connection between family services and corporate services, domestic services and overseas services, and financial services and non-financial services has attracted unprecedented attention, and wealth management institutions are striving to build overall solutions in multiple scenarios.
Based on factors such as traffic acquisition, capacity support and common services, the boundaries of wealth management institutions are opening, the willingness to cooperate between institutions is increasing, and collaboration and cooperation have become the main theme, which creates conditions for the planning and implementation of the overall service plan of wealth management.
4. The balance between family value, enterprise value and social value.
In the context of Chinese-style modernization, the attention of wealthy people to the balance between family value, corporate value and social value is gradually increasing, which is reflected in how to make their enterprises a responsible enterprise, how to more effectively plan the top-level structure of charity, and how to build better stakeholder relationships.
What is different from the past is that the focus on value balance is no longer limited to the wealthy people in the coastal areas, but is a common concern of the wealthy people in all regions.
5. In-depth attention to structural forces such as ownership structure and system governance.
It will be a historic trend for the wealthy people to have a new understanding of the allocation of ownership, control, management and income rights of operating assets and major non-operating assets, and gradually evolve from the property rights of natural persons to the property rights of legal persons and trust property rights, so as to more comprehensively realize the protection, management and inheritance of wealth.
With the optimization and reconstruction of the ownership structure, as well as the application of family trusts, family holding companies and family limited partnerships, the governance of family governance, corporate governance and structure has received increasing attention, and the coordination of multi-dimensional governance has become the top priority.
6. Discovery and application of the functions and values of various types of family offices.
The development trend of single family offices (SFOs), multi-family offices (MFOs) and institutional family offices (FFOs) is certain, the number of SFOs has increased significantly, MFOs have become more active, FFOs are generally established, and wealthy people have a new understanding of the function and value of family offices, and are more willing to try to cooperate with family offices.
Of course, the call for regulating the family office industry is also getting higher and higher, and the development from disorder to order is also a definite trend, which is a prerequisite for the sustainable development of the industry, which is exactly what the market is particularly looking forward to.
7. A new pattern of wealth management service ecology.
More and more entities are participating in the wealth management market, and most importantly, with the increasing maturity of the wealth management market, more institutions are adjusting their corresponding market strategies and entering the wealth management market with a new attitude.
For example, the investment of the leading companies in the wealth management market has increased significantly, and entrepreneur offices have been established, and the entrepreneur office with similar functions to the family office has become a new market entity with Chinese characteristics, which is worth observing and looking forward to.
The entry of more powerful institutions into the wealth management market will inevitably change the competitive landscape of the market and reconstruct the wealth management service ecology, which is very obvious, and all wealth management institutions are making corresponding adjustments and optimizations.
At the same time, the adjustment of policies will also have a profound impact on the pattern of the wealth management market. For example, the implementation of the "integration of newspapers and banks" will have a very profound impact on the cooperation pattern and model of banks and insurance institutions, and possible changes in the future are worth exploring.
8. Innovation and improvement of wealth management tools.
More possibilities and prosperity of the wealth management market are inseparable from the exploration and innovation of wealth management, which should be continuously paid attention to.
For example, donor suggestion (DAF) has received extensive attention in China, and market entities such as financial institutions and associations are doing corresponding practical exploration; Another example: the tool innovation of charity insurance, in which a number of financial institutions and charities are jointly involved, is also underway.
In practice, the continuous optimization and improvement and innovation of the functions and value of wealth management tools are equally important.
For example, in recent years, the functional value of family trust has been more fully extended, and has gradually evolved from the functions of vesting management, flow management, flow management and security management to a platform for rights allocation, family governance, value management and system guarantee.
Overall, starting from the bottom line security, ensuring the fruits of victory, starting from comprehensive compliance, achieving value balance, starting from sustainable development, and realizing system inheritance will be the main theme of wealth management in 2024, among which how to achieve a balance between bottom line security and sustainable development will be the core concern of the wealth management market.
With the development of the wealth management market, the changes in the wealth management legal service market are obvious. More and more influential legal service institutions have begun to systematically carry out legal services in the field of wealth management; More and more lawyers with different professional backgrounds such as family, tax, corporate, investment, finance, and dispute resolution have turned to the field of wealth management legal services, which is also very exciting and expected by the market.
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