Guosen: The transformation of bank wealth management from "deposits-like" to "multi-asset"

Guosen released a research report stating that in the long term, the differentiation transformation of wealth management subsidiaries comes from the diversification of product forms, and the "race" of product rectification and transformation will continue. It is judged that the space for banks' wealth management to use smoothing profit means (including but not limited to smoothing funds, closing price valuation, etc.) will gradually shrink, which will force wealth management subsidiaries to increase risk budgets in product design and increase income through multi-assets and multi-strategies. Specifically, for fixed-income assets, institutions will continue to allocate high-coupon assets, while increasing product income through bond trading strategies; for diversified assets, convertible bonds, gold, equities, commodity CTAs, etc., are effective asset strategies other than traditional bonds and deposits. In this situation, to adapt to the large-scale operation of wealth management funds, wealth management subsidiaries will also increase the transformation of platformization, industrialization, and integration of investment research models. Guosen's main points are as follows: Since the implementation of the new regulations on asset management, bank wealth management transformation has gone through two stages (1) Before the new regulations on asset management, wealth management business belonged to the extension of commercial bank on-balance sheet operations. After the new regulations on asset management, bank wealth management business was formally included in the large-scale asset management system, opening up a comprehensive net worth transformation under unified regulatory policies. During 2019-2021, with the promotion of the transformation of non-standard products, wealth management increased the allocation of diversified assets such as equities, expanded product innovation, and shifted from the original "asset-liability" fund pool management mode to the independent operation and separate accounting of net worth products; (2) In 2022-2024, under the impact of market fluctuations in stocks and bonds, products experienced a wide range of net worth declines and net worth breakages. Channel maintenance and customer complaint pressures intensified. Wealth management strengthened low volatility and stable means in product layout and asset allocation, emphasizing the absolute income strategy of performance targets and customer experience. However, it also made breakthroughs in net worth management in response to the requirements of the new regulations on asset management, attracting regulatory attention. By April 2025, the scale of the bank wealth management industry had exceeded 30 trillion yuan, but further development faces structural obstacles On the one hand, the positioning of low-volatility products and even deposit substitutes in wealth management products in recent years has not only met customer needs and stabilized market size but also further strengthened the low-risk attributes of products, leading to a significant shortening of product duration and the need to rely on quasi-fund pool models (such as trusts) and adopt "amortized cost valuation" to achieve net worth stability. On the other hand, 95% of products are fixed-income products in terms of product structure, with asset allocation mainly in deposits and credit bonds, limited active management space, and a profit model predicament for wealth management subsidiaries of scale increase and income contraction. Risk warning: Market volatility; decline in long-term interest rates, etc.