I. A Popular Summary of the Core Content
This article essentially exposes the “financial assets” that bankers have hidden for many years: The bank wealth management subsidiaries, which were established collectively in 2019, are 100% wholly-owned by the banks and can be considered the “legitimate heirs” of the banking industry. They hold a much higher status than the bank-affiliated funds established earlier in collaboration with foreign investors, which were invested with just over 100 million yuan and then dismissed. These subsidiaries receive substantial support from their parent banks, with billions of yuan being allocated to help them grow. Today, these “legitimate heirs” have reached a scale of 33 trillion yuan, and six of them have achieved a semi-annual net profit of over 1 billion yuan, making them almost on par with the leading public funds and becoming absolute players in the domestic asset management market. However, behind their seemingly glorious success, they face three structural challenges: their products are almost all low-risk, fixed-income types; they are unable to sell their products on internet platforms; and they struggle to attract younger customers. Whether they can maintain their current position or even capture a larger share of the asset management market remains uncertain.
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II. Detailed Analysis of Each Challenge
1. Why Are Bank Wealth Management Subsidiaries Considered the “Legitimate Heirs” of Banks?
Many people are unaware that banks have been operating asset management subsidiaries for a long time. In 2005, a number of bank-affiliated fund companies were established, but these were all joint ventures, with banks holding at most 50% of the shares, with the remaining shares going to foreign institutions. It was as if these subsidiaries had a “half-foreign” identity, and the parent banks only invested just over 100 million yuan as start-up capital, without dedicating all their resources to them.
However, the bank wealth management subsidiaries established after 2019 are completely different: they are all 100% owned by their parent banks, with no external shares at all. The minimum registered capital for these subsidiaries is 800 million yuan, and large banks like ICBC and CCB have invested as much as 12 billion to 15 billion yuan each. The treatment given to these “legitimate heirs” is hundreds of times that of the joint venture funds, making it no exaggeration to call them the legitimate successors to the bank’s asset management business.
2. What Level Have These Wealth Management Subsidiaries Reached?
Ten years ago, the status of bank wealth management products was much higher than it is now. In 2013, the total scale of public and private funds in the market was just over 3 trillion yuan, while bank-managed wealth management products alone exceeded 10 trillion yuan, and even the scale of trusts had just reached 10 trillion yuan. At that time, bank wealth management products were the undisputed leaders. Later, with the implementation of new asset management regulations, public funds benefited from the surge in demand for funds and their total scale reached 39.66 trillion yuan by the end of the second quarter of 2026, seemingly leaving bank wealth management products behind. However, the scale of bank wealth management products also reached 33.66 trillion yuan during the same period, narrowing the gap between the two significantly. Even more impressive is their profitability: six of these subsidiaries achieved a net profit of over 1 billion yuan in the first half of the year, compared to only seven public funds. This means that bank wealth management subsidiaries are no longer newcomers but two of the dominant players in the asset management market. The R2-level, stable wealth management products purchased by older investors from banks are likely issued by these subsidiaries.
3. The First Challenge: Product Structure
96.49% of the products offered by bank wealth management subsidiaries are fixed-income types with low risk. There is little room for developing high-yield products.
The product structure of these subsidiaries is highly skewed: less than 4% of the products invest in stocks or are hybrid types, which is completely different from the approach of public funds, which rely on stock investments for profitability. This is not because the subsidiaries don’t want to profit from stock market booms, but because they are constrained on both sides. On one hand, their existing customers rely on the belief that bank wealth management products are stable, and they would be immediately dissatisfied if a stock-based product lost 5%. On the other hand, the long-term profitability of the A-share market is unstable, and pushing equity products often results in losses, potentially damaging the bank’s reputation for stability. While fixed-income products provide stable returns, it also limits their ability to innovate and benefit from market gains during bull markets.
4. The Second Challenge: Policy Restrictions on Sales
These subsidiaries can only sell their products through their own bank branches and mobile banking apps or through cross-bank partnerships. Policies prohibit them from selling on third-party internet platforms like Alipay and TianTian Fund. Young investors have developed the habit of managing all their investments through a single app, and the growth of sales through these platforms has far outpaced that of bank channels. As a result, these subsidiaries have access to billions of yuan worth of good products but are unable to reach the younger audience on these popular online platforms, leading to a decline in customer traffic. Public funds, on the other hand, have made internet channels a core sales channel, with many smaller and medium-sized funds selling more than half of their products through third-party platforms, without relying on banks at all.
5. The Third Challenge: Customer Base
The customer base of bank wealth management subsidiaries consists mainly of older adults over 50 years old, who are loyal fans of bank products. Although these products no longer guarantee principal, they still buy them based on their trust in the bank and the relationship with their account managers. However, the younger generation (those born in the 1990s and 2000s) is largely disconnected from the banking system. They rarely visit bank branches and use mobile banking apps, preferring to manage their expenses and investments through WeChat and Alipay. Bank wealth management subsidiaries cannot meet the needs of both generations: their stable products are unsatisfying for younger investors, while higher-risk equity products may scare away their older customer base. If the current stable customer base gradually withdraws from the market in 10 to 20 years, it could lead to a significant gap in the market.