"No management fee if the net value is less than 1" and "no management fee if you don't make money" ......Last year, the wealth management company broke the tradition and innovated the management fee model. On February 28, a reporter from Beijing Business Daily learned from CMB Wealth Management and IB Wealth Management that the excess return of the "CMB Wealth Management Zhaozhuo Value Select Equity Wealth Management Plan" (hereinafter referred to as "Zhaozhuo Value Selection") reached 29 since its establishment5%；Since the establishment of the "Xingyin Li Fortune Lixing and Fidelity Dividend, the one-year minimum holding period No. 1" (hereinafter referred to as "Fuli Xinghe Fidelity Dividend") wealth management product has an annualized rate of return of 374%, all of which are positive.
All achieved positive returns.
In 2023, a class of wealth management products will be "out of the circle", these products will break the industry's "drought and flood income" rules, and adopt the strategy of "no management fee if the net value is less than 1" and "no management fee if you don't make money". On February 28, a reporter from Beijing Business Daily got the answer from the two wealth management companies of CMB Wealth Management and IB Wealth Management.
Among them, "Zhaozhuo Value Selection" was established on May 30, 2023, which is an equity product with a risk level of R5 high risk, and adopts the design idea of "profit-making" management fee, and no management fee will be charged when the net value of the product is less than 1 yuan. As of February 19, 2024, the product has an excess return of 295%。CMB Wealth Management said that from the perspective of investors' holding experience, simply put, it means that at any point in time** and held so far, the probability of positive return reaches 100%. In addition, the redemption rate of Zhaozhuo Value Select is only about 20%, and nearly 30% of the initial customers have repurchased.
The "Fuli Xinghe Fidelity Dividend" launched by IB Wealth Management has also achieved positive returns, which was established on December 19, 2023, and uses a dividend strategy to invest in high-quality and high-dividend listed companies in AH and AH, with a risk level of R3. In terms of charging mode, the product stipulates that "within one year from the date of establishment of the product, if the cumulative net unit value of the day before the valuation date of the product is less than 1, no investment management fee will be charged on the valuation date". IB Wealth Management said that since the establishment of the product, the market has experienced a round of depth, but the investment is based on the idea of absolute return, and there is no "broken net" in the operation process. As of February 27, 2024, the net value of Fuli Xinghe Fidelity Dividend Products is 100728, annualized rate of return since its inception 374%, with an annualized rate of return of 4 this year1%。
"No Profit, No Fee" breaks the "industry rule" of charging fixed management fees for public offerings, and also deepens the income of managers with the interests of investors. CMB Wealth Management said, "The original design intention is based on customer needs and for the sake of customers, with the aim of further enhancing the experience of customers' wealth management products." At the same time, mainly combined with the absolute return positioning of this product, the calm and introverted management style of the investment manager and the market low level of A-shares and Hong Kong stocks at the time of issuance, etc., the terms of net value less than 1 and no fixed management fee are operable and closely bound to the customer's experience. Judging from the actual operation of the selected products after the recruitment, this attempt is still relatively suitable for this product."
The innovation of the rate structure is a measure taken by wealth management companies to further benefit investors. Yin Lingyue, a researcher at Puyi Standard, said in an interview with a reporter from Beijing Business Daily that investors pay more attention to the income acquisition ability and risk control ability of the product itself than the institutional rate concession. At present, the innovation of the rate structure of "no profit, no fee" is mostly applied to high-risk equity products, and the main purpose is to boost customers' confidence in equity allocation.
Yin Lingyue emphasized that rate collection is one of the main incomes of wealth management companies, and it is difficult to apply the rate innovation model of "no money and no charge" to all products due to the impact of management and sales costs. However, rate innovation is still one of the investment highlights of wealth management products, and wealth management companies can actively optimize the rate design to enhance the attractiveness of products.
According to Liu Yinping, an analyst at the Rong 360 Digital Technology Research Institute, the innovative charging method breaks the model of charging fixed management fees for public wealth management products, and is a method of publicity and customer acquisition, which can enhance the customer experience, and also reflects the confidence of wealth management companies in their own asset management capabilities, which helps to retain customers.
Rate innovation should be balanced with pricing.
In order to attract the attention of customers, various wealth management companies usually reduce the various rates of wealth management products to make profits for investors, but the rate "discount" usually has a time limit, and there is still room for recovery in the future. Recently, a number of wealth management companies have adjusted the rates of their wealth management products. According to Everbright Wealth Management, in order to better serve new and old investors, from March 1 (inclusive) to April 30 (inclusive), the "Sunshine Blue Institutional Profit Wealth Management Products" preferential rate activity will be launched, and the management fee rate will be 02% discount to 01% year.
In order to better meet the financial needs of investors, the company plans to carry out preferential rates on March 1 (inclusive) on the "Huaxia Wealth Management Cash Management Wealth Management Wealth Management Product No. 10 New Issue F Shares", and the sales fee rate of F shares after the discount is 015% year.
Strategically lowering product rates can increase yields and attract investors' attention, but for wealth management companies, more exploration can be made in fee innovation in the future. Liu Yinping further pointed out that fee innovation can better meet the needs of different investors, for example, for cash management products and other high-liquidity, low-risk products, the adjustment of product fixed management fees can be directly reflected in the actual rate of return of products; For medium and high-risk hybrid and equity products, more flexible strategies can be set in terms of floating management fees according to market conditions.
However, some wealth management companies are still conservative about rate innovation. A person from a wealth management company told a reporter from Beijing Business Daily, "the model of 'breaking the net and not charging management fees' has not triggered the industry to follow suit, the reason is that wealth management companies generally have concerns, unable to locate which type of risk level and product scale is suitable for this model, under normal circumstances, the products that propose innovative management fees are usually equity products, and the risk of such products 'breaking the net' is higher, and it is not the current main product of the wealth management company;."The investment targets of low-risk wealth management products are usually treasury bonds, bank bills, bank deposits, interbank certificates of deposit, etc., which are less likely to break the net, and this charging method is easy to form a gimmick, so how to 'test the water' needs to be reconsidered."
Talking about rate innovation, Yin Lingyue suggested that, first of all, wealth management companies can consider implementing performance-related rates, and the level of fees is linked to the performance of investments. For example, when an investment income exceeds a certain benchmark, the wealth management company can charge a higher management fee, and vice versa. In this way, investors can feel that the interests of the wealth management company and them are aligned. Secondly, wealth management companies can adjust the fee rate according to the customer's investment amount, encouraging large investors to increase their investment through more favorable rates. In addition, there are tiered rates that can be offered that decrease over time to attract long-term investors.
In addition, wealth management companies can also provide more options for self-selected rates, such as allowing investors to choose between front-end or back-end fees, and even variable fees, so that such flexibility can meet the needs of different investors. At the same time, the innovative adjustment of the rate structure of wealth management products requires wealth management companies to have higher risk management capabilities and pricing technology. How to balance returns and risks, and maintain competitiveness without reducing profit margins, is also a problem that wealth management companies need to carefully consider. Yin Lingyue said.
Beijing Business Daily reporter Song Yitong.