Seven suggestions on strengthening supervision of the third party wealth management industry

category:Finance
 Seven suggestions on strengthening supervision of the third party wealth management industry


What are the problems facing the operation and development of the third-party wealth management industry? How and who should supervise the industry? What should be the orientation of industries and institutions and what is the direction of transformation?

Under such background and problems, the 21st century economic report and the 21st century Asset Management Research Institute recently launched a research on the third-party wealth management industry, wrote the relevant research report, and held a closed door Seminar on the feedback from the industry. The responsible persons from the regulatory agencies and the head of the third-party wealth management companies participated in the meeting and had a full exchange of relevant issues And discussion.

After years of rapid development, the third-party wealth management industry has grown to a certain scale, and some head companies have emerged. They have extensive and close ties with other types of institutions in the financial industry and become a branch of the financial family. At the same time, it has accumulated a lot of problems, especially in recent years, product default and other risk exposure have gradually become a normal phenomenon in the industry, which makes the third-party wealth management companies face huge brand image pressure.

According to the feedback from major institutions, the main problems faced by the third-party wealth management companies include: firstly, under the macroeconomic cycle and policy adjustment, some assets have bad debts, and the old products sold in the form of fixed income are facing the problems of default and cashing; at the same time, the company is facing the heavy and long process of bad debt disposal. In this process, it is exposed that there are various compliance and moral problems in the internal operation of some companies, which reflects the existence of internal fund pool, the misleading sales of some sales personnel, and the disputes over whether the due diligence of some investments is in place.

Secondly, under the framework of unified asset management transformation, the third-party wealth management companies are faced with the problem of rectification and remodeling of the whole business structure. Due to the need to complete the complete rectification in a short time, the task is very heavy. Among them, the layout and investment of science and technology system is an important aspect, and the cost is high.

In addition, in the past years, the industry has been in a state of disordered development to a certain extent. Under the low threshold, a large number of enterprises without qualification have flooded into the industry. The unlicensed driving problem is prominent, and the industry lacks an effective credit accountability system.

Previously, institutions engaged in third-party wealth management only needed general industrial and commercial qualifications to develop their businesses, asset management companies only needed general corporate qualifications to develop their businesses, and private equity funds were issued for record according to the process, and there was no clear regulatory body. In the current financial regulatory framework, the CBRC supervises banks, trusts, insurance and other institutions, while the CSRC supervises financial institutions such as securities, funds and futures. The third-party wealth management institutions or asset management companies registered according to the requirements of general industrial and commercial enterprises are subject to market supervision by the industrial and commercial administrative Department on behalf of the state And supervise enterprise behavior in accordance with industrial and commercial laws and regulations. For example, only to confirm whether there is business beyond the scope of business, commercial bribery and other acts, but not the core content of the products sold, operation mode and other core content.

From the perspective of supervision, in addition to the low entry threshold, there is also a lack of continuous supervision and management in the business process. Compared with the industry scale, the regulatory power is seriously insufficient, and the regulatory framework is not clear. How to manage the behavior supervision and prudential supervision respectively, and what kind of capital requirements and risk provision requirements should be established in the prudential supervision? Behavior supervision needs to be further strengthened. In the past, many sales misleading and fraud phenomena have been exposed. Who is responsible for the specific supervision? In addition, financial industry regulation emphasizes the application of the same set of regulatory rules to the same kind of products. How to implement joint supervision?

In the process of studying the regulatory framework, there are also many issues involved, such as how to coordinate the relationship between different regulatory authorities? How to deal with the relationship between the central and local governments and who will take the lead in dealing with the risk disposal problems such as illegal fund-raising, fund pooling and lending?

Another practical problem is that many real controllers of third-party wealth management companies are involved in group operation. The group covers financial and non-financial businesses, and different types of business are involved in the financial business. There are complex nested and serial relationships among institutions, products and funds, involving different regulatory departments. How to work out the Division of labor and cooperation?

On the issue of licensing, all financial activities must be licensed. What kind of license should a third-party wealth management company hold? At present, most of the third-party wealth management companies are mainly engaged in product sales, but the sales licenses issued by the supervision can not cover the product types such as private equity funds and trust plans. For the sales activities of different products, is it necessary to apply for a license separately or to strengthen the function of the license plate? How to achieve it?

At present, there is still no clear answer to this series of questions.

The third-party wealth management companies are also faced with some other practical problems in the actual operation. For example, the companies positioning sales agencies sell all kinds of asset management products on a commission basis. Different types of products have different account establishment and management standards. For companies, the cost of payment and settlement in the process of decentralized management is very large; for example, in terms of trusteeship, third Fang wealth management companies often refuse to set up escrow accounts in banks by big banks, so they can only turn to small institutions. The development environment makes the institutions develop in the direction of non-compliance. It is hoped that this ecological soil will be changed.

From the perspective of the future development and positioning of the industry, how to deal with the relationship between different business lines of product sales, investment consultants and asset management, how to position the third-party wealth management company itself, whether it can do both asset management business and third-party wealth sales, whether there is conflict of interest, and what kind of firewall system should be established?

Although the development of the industry is facing various problems and challenges, there is no doubt about the development space and the necessity of the existence of wealth management industry. There are more than 1 million high net worth people in China, mainly entrepreneurs who have become rich after the reform and opening up. The investable assets are close to 100 trillion. On the one hand, there are reasonable allocation and management needs for these wealth; on the other hand, it is also a matter of benefit to the country and the people to guide these money out of the system into the new economy through reasonable means of asset allocation.

Suggestions on strengthening supervision

In view of the above problems faced by the industry and supervision, experts and practitioners participating in the research and closed door meeting of the 21st century Asset Management Research Institute have put forward many suggestions from their respective perspectives.

The first is to raise the threshold of access and license management.

Over the years, the third-party wealth management industry has been in chaos. One of the important reasons is that the threshold is low, which leads to many unqualified enterprises to enter the industry. Wealth management is the industry closest to money. If we do not strengthen supervision, it may lead to all kinds of chaos. Therefore, it is suggested that the industry access threshold should be greatly increased.

Second, we should embrace supervision, strengthen industry self-discipline, and strengthen management in and after the event.

A number of third-party wealth managers interviewed said that although the wealth management industry is currently free from regulation, they are eager to be regulated. However, the embarrassing situation is that the third-party wealth management institutions are mainly managed by the financial market department of the local financial bureau, whose responsibility is to urge the wealth management institutions to deal with the default of some products to avoid triggering social problems. The third-party wealth management institutions are supervised by the relevant regulatory authorities.

Therefore, it is suggested that the industry needs to operate with a license and raise the entry threshold. However, in addition to the access, it is also necessary to strengthen the in-process and post-mortem supervision, with reference to overseas countries, to promote the industry with licensed supervision and industry self-discipline.

Wealth management institutions with sales as their main business direction play an important role in investor education and investor protection. Wealth management is an ongoing process. In addition to the necessary institutional access review, it is also necessary to conduct in-depth study on the responsibilities and obligations to be performed during and after the whole process.

Information asymmetry and information opacity are common inducing factors of financial industry risk events, especially for some financial products with complex structure, without strict credit requirements, ordinary investors are difficult to master the final investment direction of funds and the real-time situation of underlying assets. It is necessary and urgent to strengthen information disclosure, and it is necessary to formulate corresponding rules for information disclosure.

The development of financial technology can make better use of the means of science and technology and the power of big data to improve the transparency of information and the efficiency of information transmission. For example, the United States has established a common regulatory database through the industry self regulatory organization finragateway, which helps to improve the transparency of the industry. In China, in the next stage, it is particularly significant and important to collect and analyze the return data of different private equity investment funds, form a standardized evaluation system, and disclose or benchmark them. Industry data is not standard and opaque, which is a key obstacle to investors long-term investment.

At the same time, it is suggested that the industry should implement the third-party trusteeship system and carry out risk control.

In the future, there will be great changes in the supply of asset management products. From fixed income products in the past to quasi public offering and net value products, it will take a long process for investors to change their ideas. In the sales process of asset management products, for the phenomenon of commission only ranking in the current market sales, it is suggested that the market establish an independent and impartial product rating agency to select and rank the products with good performance in the first place, rather than ranking according to the amount of commission, so as to provide an effective reference for the selection of product sales agencies and investors.

Fifthly, give full play to the supervision role of independent professional institutions and establish honest supervision.

At present, there is a lack of regulatory power for the third-party wealth management industry. In the process of establishing the regulatory framework, in addition to regulatory agencies and social forces, independent third-party professional organizations can also play an important role. Especially for the industry in the process of continuous operation in advance, in the event, after the continuous supervision. For example, we propose audit requirements for companies and products, and within the scope of the white list issued by the supervision, let the company introduce professional institutions for audit supervision, and the party that meets the requirements can operate sustainably; otherwise, rectification will be carried out until the requirements are met.

Build credit system and set up industry self-discipline organization. Credit is the lifeline of finance, and a mature and perfect credit system is the premise for the normal operation of financial activities. In view of the current widespread misleading, fraud and other phenomena in the industry, the establishment of a strict integrity accountability system, so that damage to credit institutions to pay the corresponding price. Compared with the overseas market, on the one hand, regulation itself is cross industry supervision; on the other hand, in addition to regulatory authorities, industry self regulatory organizations and other institutions also play a very important role.

The sixth is to manage the access of employees.

The seventh is to establish continuous investor education.

The seller is responsible and the buyer is responsible. Finance is a risk management industry. It is necessary to strengthen the popularization of financial knowledge and carry out effective investor education.

International experience of functional regulation and license regulation

From the perspective of the regulatory methods for financial activities in overseas markets, the SFC has set No. 1-10 licenses for different types of activities. Among them, license No. 4 and No. 9 are mainly related to wealth management industry, and their corresponding functions are providing advice on securities and asset management.

Regulatory authorities and licenses related to the sale of financial products in the U.S. region include: the Series3 certificate grants brokers the right to sell commodity futures contracts, which is supervised by the financial regulatory authority. Series6 holders can sell portfolio products, such as mutual funds, variable annuities and unit investment trusts, which are regulated by the FSA. Series7 holders can sell almost all kinds of personal securities, including common stock and preferred stock, call and put options, bonds and other personal fixed income investment products, as well as all forms of portfolio products; major securities or investment products that cannot be sold, including commodity futures, real estate and life insurance products, are regulated by the financial regulatory authority. The series65 license is held by staff members who provide financial investment advice or provide non Commission basic services, such as financial planners and consultants who provide investment advice and pay on time. The regulatory authority is the North American securities Managers Association.

In addition, in the U.S. market, companies and individuals specializing in investment consulting business need to apply for a registered investment adviser (RIA) license. Only a registered investment adviser (RIA) is qualified to provide investors with investment analysis suggestions on securities products and provide investment reports on a regular basis. Only the qualified institutions can charge the corresponding management fees and undertake the entrusted responsibility to the customers. The regulators are the securities and Exchange Commission and the American futures association.

In Hong Kong and the United States, the coexistence of investment advisory business and asset management business is common. In order to avoid conflicts of interest, it is a common international measure to establish an effective isolation firewall between investment advisory business and asset management business, so as to reduce the conflict of interest and maintain the effective use of resources. As an investment advisory service provider, when providing investment advice to clients, it should fully consider the financial products available in the market, including the products of asset management business of the same company and external products, and give customers a comprehensive asset allocation proposal. The products generated by asset management business should not only be provided to customers of investment advisory business, but also be open to all investors who meet the subscription conditions. As for the issues of functional supervision and license management concerned by all parties, some organizations suggest that the combination of license plate supervision and territorial supervision should be considered. In terms of licenses, we are looking forward to the increase of the number of registered investment advisers, which can register wealth management institutions that provide comprehensive asset allocation consultation, conduct penetrating supervision, and conduct unified standard supervision. Third party wealth project report Co ordinator: Wang Fangyan members: Fang Haiping, Zhou Yanyan, Chen Zhi source: 21st century economic report author: Fang Haiping, responsible editor: Wang Xiaowu_ NF

In Hong Kong and the United States, the coexistence of investment advisory business and asset management business is common. In order to avoid conflicts of interest, it is a common international measure to establish an effective isolation firewall between investment advisory business and asset management business, so as to reduce the conflict of interest and maintain the effective use of resources. As an investment advisory service provider, when providing investment advice to clients, it should fully consider the financial products available in the market, including the products of asset management business of the same company and external products, and give customers a comprehensive asset allocation proposal. The products generated by asset management business should not only be provided to customers of investment advisory business, but also be open to all investors who meet the subscription conditions.

Third party wealth project report Co ordinator: Wang Fangyan members: Fang Haiping, Zhou Yanyan, Chen Zhi