The 2020 Wealth Management in China Report
The case for going onshore in mainland China is clear. Between 2013 and 2018, China had an average annual economic growth rate of 7%, significantly higher than the world average of 2.9%. Despite the global economic slowdown caused by the Covid-19 pandemic, China remains among the largest and most attractive markets for wealth and asset management worldwide.
This is largely due to the innovation and rapid growth of the digital economy in the last few years, which both foreign and domestic wealth managers can capitalise on by focusing less on developing extensive physical branch networks with large headcounts, and more on digital infrastructure and distribution channels to speed up market penetration with continuous coverage. Another opportunity for wealth managers is the large and growing population of mass affluent and high net worth individuals, many of whom are seeking greater product diversity and new investment opportunities while increasingly demanding more diversified, portfolio-based solutions for wealth protection purposes. This emerging trend is not only driven by a shifting investor attitude towards risk, but also by the wealth transfer to the next (mostly second) generation and very likely accelerated by the market turbulence caused by Covid-19.
From a regulatory perspective, the phasing in of wealth management product regulations issued by the People’s Bank of China, China Securities Regulatory Commission and China Banking and Insurance Regulatory Commission in 2019 is expected to be completed by the end of 2020, which should help to level the playing field for foreign entrants with regards to investment product requirements, suitability checks, disclosure and asset value calculation, as well as curbing shadow banking. The new regulation also provides an opportunity for foreign entrants to leverage their overseas wealth management expertise and experience.
Mainland China also continues to open up its economy to foreign investment in its financial services sector. From a shareholding perspective, in the past foreign banks could only hold a minority share in their mainland China operations. However, there has been a continued loosening of foreign investment restrictions. In 2018, shareholding limitations were dropped for foreign institutions investing in local Chinese banks, with the latest development involving the scrapping of foreign ownership limits for public fund management and securities firms from April 1st, 2020. Under the new US-China trade rules the management of pension funds is also opening up to foreign financial institutions.
The report also evaluates the current competition in China’s wealth management industry, benchmarks the best practices in the market, the key products that are being sold and outlines the future of the competition and regulatory environment of the market.
The report also consists of a survey of 100 senior bankers working in wealth management in China, many of them coming from the country’s big-four banks to the joint stock banks, along with relationship managers for international banks.
Table of Contents
1. Executive Summary
2. The Dragon Banker’s methodology
3. HNWI’s Opportunities in China for HNWIs
4. The Current State of the Wealth Management Market in China
5. Unique Wealth Management Services in China
6. Current Insights into the Drivers of China's HNWIs’ Wealth
7. Note on Regulations Impacting China’s Wealth Management Sector
8. The Psychological and Behavior Makeup of China’s HNWIs
9. Market Sizing of China’s HNWI
10. Growth Challenges for Banks in China’s Wealth Management Industry
11. Current Competition Amongst Banks for HNWI Clients and SWOT Analysis
- Bank of China
- Agricultural Bank of China
- China Construction Bank
- China Merchants Bank
- Bank of Communications
- China CITIC Bank
- Shanghai Pudong Development Bank
- China Minsheng Bank
- China International Capital Corporation
- Ping An Bank
- China Guanfa Bank
- Standard Chartered
- JP Morgan
- Credit Suisse
12. How to leverage The Dragon Banker for IT firms and Financial Institutions