Opportunity 1: The wealth management industry will face unprecedented development opportunities.
The "Proposal" first puts forward the long-term goal of basically realizing socialist modernization in China by 2035, including "the economic strength, scientific and technological strength and comprehensive national strength have greatly jumped, the economic aggregate and the income of urban and rural residents have reached a new level", "the per capita GDP has reached the level of moderately developed countries, and the middle-income groups have expanded significantly".
At present, the domestic standards for judging moderately developed countries are not uniform. Previously, some places took "per capita GDP reaching 1000 USD" as the standard of "moderately developed countries", but this obviously did not conform to the literal meaning of "moderately developed countries". According to the data released by the National Bureau of Statistics, the per capita GDP of China in 2065.438+09 has exceeded 1 10,000 USD. Therefore, the per capita GDP threshold of moderately developed countries needs to be raised.
From the international comparison, the per capita GDP of relatively developed or highly developed countries, such as Britain, France, Japan and other countries in 20 19 is more than 40,000 US dollars, and the per capita GDP of the United States is as high as 65,000 US dollars. Therefore, the per capita GDP of 20,000-40,000 US dollars, such as the current level of Czech Republic (23,000 US dollars), Portugal (23,000 US dollars), South Korea (30,000 US dollars) and other countries, can be roughly considered as moderately developed countries, which is also in line with general cognition, and 20,000 US dollars is the entry level of moderately developed countries.
In the future, driven by technological innovation, China will get a new round of growth bonus, and then continue the medium and high-speed growth of about 5% in 15 years. By 2035, the per capita GDP is expected to reach $20,000 at constant prices. We think this goal is feasible. Of course, if factors such as RMB appreciation are added, China's per capita GDP may reach 30,000 US dollars or even higher by 2035.
In addition, the "Proposal" also puts forward the goals of "the gap between urban and rural regional development and the gap between residents' living standards has been significantly narrowed" and "the common prosperity of all people has made more obvious substantive progress". In the next 5- 15 years, there will be a large number of emerging high-net-worth or relatively wealthy people in the vast towns and villages of China, which will make the original 2 million high-net-worth people in China grow rapidly. According to the above per capita GDP growth forecast, by 2035, the number of high-net-worth people will be 2-3 times that of the current one, that is, 2-4 million people will be added, and the scale of investable financial assets will increase by 2 -400 trillion on the basis of the current 200 trillion. If we further consider the equally rapidly expanding middle class or quasi-high net worth people, it is entirely possible for China to form an unprecedented wealth management market, which is second to none in the world.
Opportunity 2: The wealth management market will be more mature and standardized.
In addition to the long-term goals in 2035, the Proposal focuses on the main goals of China's economic and social development during the 14 th Five-Year Plan period. In terms of market construction, it is proposed to "adhere to equal access, fair supervision, openness and order, honesty and law-abiding, and form an efficient, standardized and fair domestic unified market" and "implement high-standard market system construction actions".
20 18 new asset management regulations have been issued, which has a far-reaching impact on China's wealth management market. First, it helps to promote the unified standards of wealth management industry, break the exchange, accelerate the net value of products, and prevent and resolve potential financial risks. Second, it is conducive to promoting the wealth management industry to return to its original source and improving the quality and efficiency of financial services to the real economy. Third, it will help wealth management institutions to strengthen the capacity building of investment and research, and change the previous pattern of weak innovation ability and relatively single asset allocation type. China's wealth management market has since entered a more and more standardized development track. At the same time, in recent years, government functional departments and regulatory authorities have intensified their efforts to crack down on Internet financial fraud and rectify P2P chaos. A large number of unlicensed institutions have been cleared by the market, and the wealth management industry has accelerated its return to standardized operation, which will form a positive incentive for wealth management head institutions that are licensed according to law and operate in compliance, and promote their efforts to improve the quality of products and services and further move toward specialization.
The "Proposal" puts forward that "the efficiency of state governance will be improved, the construction of socialist democracy and the rule of law will be improved" and "the people's ideological and moral quality, scientific and cultural quality and physical and mental health quality will be significantly improved". Under the guidance of the above development goals, investor education in the wealth management industry is expected to be greatly strengthened, residents' financial literacy and awareness of the rule of law will be continuously improved, and a clean legal environment and credit environment will be further formed. In the future, wealth management institutions and investors will clearly define their rights and obligations within the legal framework, rationally resolve disputes, truly realize "the seller is responsible, and the buyer is responsible", and enter a more mature and rational development stage like other financial markets such as banks and stocks.
Opportunity 3: Financial opening will bring more products and services.
The proposal emphasizes "forming a strong domestic market", "persisting in opening to the outside world in a wider scope, in a wider field and at a deeper level" and "opening the service industry in an orderly manner", which will undoubtedly help attract more international leading wealth management institutions to speed up the layout of the China market.
In recent years, China's wealth management industry has developed rapidly, the institutional ecology has gradually diversified, and innovative products have become increasingly rich, developing in a standardized, healthy and orderly direction. However, compared with the internationally developed wealth management market, the products and services in China's wealth management market still have some shortcomings, such as relatively single types and extensive service models, which are difficult to meet the differentiated and personalized needs of some high-end investors. To some extent, there are few financial instruments to choose from in China's wealth management market, which is one of the reasons why financial assets account for a low proportion of total household wealth.
Since 20 18, the pace of China's financial opening has obviously accelerated. In 20 18, China announced 15 measures to open the banking and insurance industry, cancel or greatly relax the upper limit of foreign shareholding ratio, and expand the business scope of foreign financial institutions; In 20 19, two rounds of *** 19 opening measures were further introduced, which created a good institutional and market foundation for improving the ability of China's financial industry to serve the real economy and its international competitiveness, attracted a large number of foreign banks, insurance companies, investment banks and other institutions, and greatly promoted the construction of asset management centers or wealth management centers in domestic cities such as Shanghai, Qingdao and Shenzhen. Taking Shanghai as an example, the construction of Shanghai International Financial Center is developing in depth. In the field of asset management and wealth management, the goal of building a "global asset management center" and an "Asian asset management hub" has been put forward, attracting a large number of internationally renowned asset management institutions and private equity investment institutions such as State Street Bank, Faba Asset Management, Hebao Assets and Carlyle Investment to settle in Shanghai.
The arrival of foreign-funded institutions has brought advanced business concepts and service models, which will attract domestic asset management institutions and wealth management institutions to cooperate with foreign-funded institutions in terms of equity, products, management and talents, and apply internationally mature investment concepts, business strategies, incentive mechanisms and risk control systems to China. For example, recently, BOC Wealth Management and Oriental Credit Suisse established Huahui Wealth Management, and Jianxin Wealth Management was approved to set up wealth management companies with BlackRock and Fu Deng, all of which reflected this trend. At the same time, many foreign asset management institutions and private equity institutions are actively applying for foreign public offering fund licenses after entering China. For some domestic third-party wealth management organizations mainly selling funds, this means that their product lines will be richer in the future, which will help meet the cross-border, cross-industry and cross-currency investment and wealth management needs of domestic high-end customers and make the supply and demand adaptability of wealth management more perfect.
Opportunity 4: The wealth management market for the elderly is huge.
The Proposal proposes that during the Tenth Five-Year Plan period, China will "implement the national strategy of actively coping with the aging population" and "develop the silver-haired economy".
With the deepening of aging in China, the importance of wealth management is further highlighted. From the policy point of view, in 20 19 1 1 year, the Central Committee of China and the State Council issued the "National Medium-and Long-Term Plan to Actively Respond to Population Aging", which comprehensively deployed the tasks of China to cope with population aging from 2020 to 2050. The first thing to do is to "consolidate the social wealth reserve to cope with the aging population", for example, by improving the national income distribution.
From the perspective of market supply and demand, driven by factors such as the imperfect old-age security system and the risk of early overdraft of family wealth caused by the greatly extended life expectancy, the demand for wealth management among the elderly in China is very urgent at present, but the supply of domestic wealth management has not fully matched the demand, and there is still much room for improvement in accelerating product and service innovation in the future.
Opportunity 5: Improve the multi-level social security system and create new opportunities for the wealth management industry.
The proposal suggests "perfecting multi-level social security system", "developing multi-level and multi-pillar endowment insurance system", "steadily establishing long-term care insurance system and actively developing commercial medical insurance".
After years of exploration, China has basically formed a "three-pillar" pension system. Among them, the first pillar is the basic old-age insurance system led by the government, the second pillar is the annuity system independently developed by some enterprises and institutions, and the third pillar is mainly personal savings old-age insurance and commercial old-age insurance. At present, the development among the three pillars is unbalanced: the first pillar is absolutely dominant, covering 970 million urban and rural residents nationwide, accounting for 70% of the total pension assets in the country; The progress of the second pillar is slow. Most of the participants are state-owned enterprises (enterprise annuities) and institutions (occupational annuities), with more than 20 million participants, accounting for 30% of the total pension assets. There are some problems such as narrow coverage, heavy economic burden of institutions and lack of willingness to continue to join. As for the third pillar, it is still in the initial stage of the pilot project, and its proportion is almost negligible. However, considering that the first pillar has been running at full capacity, which is a heavy financial burden for the public, and the general enterprises of the second pillar are unwilling to join, the third pillar has the greatest potential and the most promising development prospects, which has become the consensus of the regulatory authorities and all walks of life. On the eve of the Fifth Plenary Session of the 19th Central Committee, Guo Shuqing, Chairman of the China Banking Regulatory Commission, pointed out that vigorously developing the third pillar of old-age security can effectively alleviate the pressure on China's old-age insurance expenditure and meet people's diversified old-age needs; At the same time, we can also concentrate long-term stable funds and explore cross-cycle investment models, which will become an important force for long-term investment and value investment in the capital market and meet the capital needs of infrastructure and scientific and technological innovation. Chairman Yi Huiman of the China Securities Regulatory Commission also said that it will promote the optimization of the policy environment for medium and long-term funds such as the third pillar pension to enter the market. It is predicted that if the third pillar of China approaches or can reach the development level of the United States, it is likely to form an emerging market with a scale of several hundred trillion.
Relevant policy practices have also been actively promoted in recent years. From April, 2065438 to April, 2008, many departments jointly issued the Notice on Launching the Pilot Project of Personal Tax Deferred Commercial Endowment Insurance, and some of them piloted the tax deferred endowment insurance, which made a useful exploration for enriching the third pillar of endowment insurance. Since 20 19, Ministry of Human Resources and Social Security, Ministry of Finance and other departments are actively studying and formulating the third pillar policy document of endowment insurance, and plan to adopt the account system and establish a unified information management service platform. Eligible financial products such as bank financing, commercial endowment insurance and funds can all become the third pillar products of endowment insurance. From the perspective of business practice, in order to enrich the third pillar pension products, it is necessary for the regulatory authorities and financial institutions to speed up the training of qualified pension management personnel and build an authoritative third-party fund rating agency.
Opportunity 6: Great health and wellness industry has broad prospects.
It is clearly stated in the proposal that during the Tenth Five-Year Plan period, it is necessary to comprehensively promote the construction of a healthy China, speed up the development of modern service industries such as health and pension, vigorously develop the cause of traditional Chinese medicine, promote the coordinated development of pension undertakings and pension industries, and build a pension service system combining medical care with nursing care.
Since the reform and opening up, remarkable achievements have been made in the reform and development of China's health field, and the people's health level has been continuously improved. At the same time, China is also facing new challenges brought by industrialization, urbanization, population aging and changes in disease spectrum, ecological environment and lifestyle, and it is necessary to solve major and long-term problems related to people's health as a whole. In 20 16, the Central Committee of China and the State Council issued the Outline of Healthy China 2030, which comprehensively and systematically put forward the objectives and measures such as improving the physical quality of the whole people, strengthening public health services covering the whole people, and developing new formats of health services.
In 2020, an COVID-19 epidemic sweeping the world profoundly revealed that all countries in the world today, whether developed or developing, are facing the same severe challenges in the face of public diseases. The epidemic situation further reminds China to accelerate the "healthy China" strategy. During the "Tenth Five-Year Plan" period, China will promote the tasks of popularizing healthy life, optimizing health services, improving health security, building a healthy environment and developing health industries. In this context, new health industries, new formats and new models will continue to emerge and expand their extension, and the big health industry will enter a golden period of rapid development.
In this process, the demand of high-net-worth people for big health care services will undoubtedly be stronger. This provides an excellent development opportunity for wealth management institutions that mainly serve high-net-worth people. On the one hand, the importance of health insurance will be further highlighted. From the experience of the United States, in the last 20 years, active management health insurance, which provides "pre-hospital, in-hospital and post-hospital" health risk management services, has replaced medical services as the core of the whole health industry chain. On the other hand, wealth management institutions are most suitable to build bridges between customers and advanced medical resources and health medical resources at home and abroad, and regard them as an important part of a comprehensive package of services to meet customers' diversified needs.
Opportunity 7: Wealth management technology will accelerate development.
According to statistics, in the proposal of the Fifth Plenary Session of the 19th Central Committee, the word "innovation" was mentioned as many as 15 times. There are many expressions to encourage innovation or technological innovation, such as "insisting on the core position of innovation in the overall situation of China's modernization", "enhancing the technological innovation ability of enterprises, stimulating the innovation vitality of talents, perfecting the system and mechanism of technological innovation" and "accelerating digital development".
In recent years, financial technology represented by Internet of Things, artificial intelligence, big data, blockchain, virtual reality and cloud computing. With the rapid development, the combination of technology and finance is getting closer and closer, and it has been widely used in banks, securities firms and other industries, infiltrating into all links before, during and after. Internationally, financial technology innovations such as smart investment, financial planning software, portfolio management software, digital platform and robot process automation have been fully demonstrated in some advanced wealth management industries, and financial technology is having a far-reaching impact on the wealth management industry.
Although the application of financial technology in China's wealth management field is still in its infancy, it is full of confidence in the future development prospects. First, local governments and regulatory authorities have great determination and strength to promote the accelerated development of financial technology from top to bottom. 20 19 In August, the People's Bank of China formulated and issued the Financial Science and Technology Development Plan (20 19-202 1), proposing that by 20021,it is necessary to establish and improve the "four pillars and eight pillars" of China's financial science and technology development; Xiong'an new area, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, etc. It also puts forward the goal and vision of building a financial technology center. Second, China's wealth management industry has the advantage of catching up and will reach the level of developed countries in Europe and America relatively quickly. In some sub-sectors of wealth management, it may even take the lead in applying some financial technologies and become a leader in related fields. Judging from China's practice in the fields of mobile payment and digital currency in recent years, related fields have been at the forefront of the world in the application of related technologies.
It can be predicted that in the future, China's wealth management industry will plug in the wings of financial technology and provide customers with better, more accurate and direct products and services through the combination of "financial consultants and wealth technology". In the future, the application of financial technology in the field of wealth management will mainly focus on promoting the digital transformation of wealth management industry, improving the customer service efficiency of wealth management industry, reducing the operating cost of wealth management, and enhancing the adaptability of wealth management. Driven by wealth management technology, accurate, personalized and customized high-quality wealth management services that only a few high-net-worth and ultra-high-net-worth people can enjoy in the past will "fly into the homes of ordinary people" and benefit a wider range of quasi-high-net-worth or middle-class families.
"Until the river bank widens at low tide, no wind blows my lonely sail". In the next 5- 15 years, from the demand side, driven by the dividend of scientific and technological innovation, China will accelerate its March into the ranks of moderately developed countries, and the residents' wealth accumulation and the consequent demand for wealth management will continue to increase substantially. From the supply side, the market environment will be increasingly standardized, the opening-up will be further developed, and financial technology will be rapidly iterated, which will greatly enhance the wealth management and supply capacity of financial institutions. China's wealth management market will be full of vitality, and the wealth management industry will usher in a new round of great development, thus entering a new golden opportunity period.
About the author:
Lian Ping, Chief Economist and Dean of Zhixin Investment Research Institute
Tamia Liu, vice president of Trust Investment Research Institute.