news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Our reporters Gu Mengxuan and Xia Xin reported from Guangzhou and Beijing

Xi Que Wealth Fund Sales Co., Ltd. (hereinafter referred to as "Xi Que Wealth") has not had a good time recently because many fund companies want to "break up" with it.

According to incomplete statistics from a reporter from China Business News, after the "breakup wave" in July, since August, about 10 fund companies and securities asset management companies, including Bohai Huijin Securities Asset Management Co., Ltd., have terminated their fund sales business at Xi Que Wealth. In addition, some fund companies have also terminated their fund sales business at Beijing Zhongzhi Fund Sales Co., Ltd.Public FundsMainly companies, but alsoPrivate Equitycompany.

An insider of a public fund that terminated its cooperation with Xi Que Wealth revealed to reporters that the termination of cooperation was a decision made by both parties after consultation. "In terms of the selection of sales agencies, the company has an internal sales agency admission mechanism and a sales agency upper limit management system. The third-party fund sales companies that cooperate must comply with the fund sales management regulations and other regulations. At the same time, factors such as whether the sales agency's governance structure is sound and whether its business operations are standardized are considered."

"Breakup" after punishment

The reporter noticed that this was not the first time that Xi Que Wealth had been "broken up". In November 2023, several funds of Caitong Fund terminated their cooperation with Xi Que Wealth; in September 2022, several funds of Guolian An Fund terminated their cooperation with Xi Que Wealth.

The reporter logged into the official website of Xi Que Wealth, and its homepage showed that due to business development and adjustment needs, Xi Que Wealth Fund Sales Co., Ltd. decided to stop fund sales business. The reporter then called Xi Que Wealth, and the staff who answered the phone told the reporter that the decision to stop fund sales business was a collective decision made by the company's management, but he did not know the specific reason.

The reporter noticed that Xi Que Wealth had been punished by regulators for poor management. On July 7, 2022, the Tibet Securities Regulatory Bureau issued an announcement ordering Xi Que Wealth to suspend relevant business for 6 months. The relevant penalty announcement stated that Xi Que Wealth had problems in business management, internal control, and information technology. As far as fund sales and risk control are concerned, according to the penalty letter, in terms of internal control, Xi Que Wealth had sold private equity fund products without the compliance and risk control personnel issuing special compliance and risk assessment reports on private equity fund sales access. The sales manager and compliance and risk control personnel did not conduct internal compliance reviews of the fund promotion and recommendation materials used for sales, and did not issue compliance review opinions; in terms of information technology, there were problems such as not having a chief information officer, not regularly organizing key personnel to conduct emergency drills according to the emergency plan, not establishing a disaster backup system, and not conducting an effectiveness assessment of the risk monitoring mechanism and implementation.

A small and medium-sized fund company confirmed to reporters that being punished was also the reason why they terminated their cooperation with Xi Que Wealth.

In addition to Xi Que Wealth, the reporter found that the fund company also terminated its cooperation with some other fund sales agencies.

On July 15, Xinhua Fund issued the "Announcement on Terminating Beijing Zengcai Fund Sales Co., Ltd.'s Handling of the Company's Fund-Related Sales Business and Subsequent Investor Service Measures". Xinhua Fund will terminate its fund sales business cooperation with Beijing Zengcai Fund Sales Co., Ltd. from July 19.

What factors do fund companies generally consider when choosing third-party sales agencies? A person from Xiangcai Fund told reporters that the company has a complete system and process for introducing and exiting sales agencies. In establishing and maintaining sales relationships, the company will focus on the compliance management system, internal control, and regulatory penalties of the third-party sales agencies to ensure that the cooperation between the two parties is based on legality and compliance. In addition, from a business perspective, the company will also examine the resource endowment, sales capabilities, business cooperation, and other factors of the third-party sales agencies to promote in-depth and win-win cooperation between the two parties.

An insider of a medium-sized public offering told reporters that when choosing a third-party sales agency to cooperate with, the first thing to look at is the number of collaborations between the third-party sales agency and industry companies; the second is the stock size of the sales agency itself; and finally, the qualifications and background of the sales agency, such as whether the shareholders are individuals or banks.

Rate reform affects third-party agency sales revenue

With the advancement of fee reform, the ecological structure of the fund agency industry is being reshaped. Some small third-party agency sales agencies have lost out in the fierce competition due to their lack of strength.

The above-mentioned person from Xiangcai Fund pointed out that under the current sales structure dominated by agency sales, large third-party institutions in particular have a strong position and hold a greater say in trailing commissions and marketing expenses, squeezing the profit margins of fund companies; on the other hand, third-party fund agencies currently still adopt a "product-centered" sales model, which is unable to reverse the situation of "funds making money, but investors not making money", restricting the healthy development of the fund industry.

A person from the Tianxiang Investment Consulting Fund Evaluation Center pointed out that, as shown in the case of Xi Que Wealth, third-party fund sales agencies mainly have the following problems: First, some sales agencies may have loopholes in compliance and risk control, which may lead to regulatory penalties and reputation risks. Second, the service quality varies. The service quality of different sales agencies varies, which may affect the sales of fund products and customer experience. Finally, there is a lack of information technology. The inadequacy of information technology in some small and medium-sized sales agencies may affect their business continuity and customer data security.

The above-mentioned Xiangcai Fund person pointed out that the decline in the management fee of public funds and other fees will directly affect the income of third-party sales agencies, and the reduction of their trailing commissions is an inevitable trend; the reform of public fund fees will accelerate the reshuffle of the industry, especially for small third-party agencies, whose own profit level is limited. In the new market environment, they will face a more severe living environment. In addition, in order to adapt to the trend of fee reform, sales agencies may need to adjust their business models.

How to solve the problems currently faced by third-party fund sales agencies? The above-mentioned Tianxiang Investment Consulting Fund Evaluation Center personnel put forward two points: First, strengthen cooperation screening. When selecting sales agencies, fund companies should pay more attention to their compliance records, service quality and information technology capabilities. Second, establish a supervision mechanism: Fund companies should establish an effective supervision mechanism to regularly evaluate the business performance and compliance of sales agencies.

Resource endowment + differentiation is the breakthrough

In the fund sales market, third-party fund sales agencies have always occupied their own place. The larger ones include Ant (Hangzhou) Fund Sales Co., Ltd. (hereinafter referred to as "Ant Fund") and Shanghai Tiantian Fund Sales Co., Ltd. (hereinafter referred to as "Tiantian Fund").

According to data from the Asset Management Association of China (hereinafter referred to as "CAAM"), as of the end of the fourth quarter of 2023, two of the top three non-monetary market public funds were held by third-party sales agencies. Ant Fund and Tiantian Fund ranked first and third among all fund sales agencies in terms of public fund holdings, with public fund holdings of 1,272.3 billion yuan and 773.5 billion yuan, respectively. If we only look at the size of stock + mixed public funds, Ant Fund and Tiantian Fund ranked second and third in terms of holdings, with public fund holdings of 459.2 billion yuan and 402.9 billion yuan, respectively.

Even when competing with banks and securities firms, third-party fund sales agencies are not "weak". According to data from the China Securities Association, in the fourth quarter of 2023, a total of 18 third-party sales agencies entered the top 100 in terms of scale, and the total non-monetary public funds held by the 18 companies totaled 285.9 billion yuan. Although this figure is not as high as that of banks (382.93 billion yuan), it is much higher than that of securities firms (173.29 billion yuan). However, judging from the scale of stock + mixed public funds held, the scale of third-party sales agencies has not yet exceeded that of banks (229.27 billion yuan) and securities firms (142.18 billion yuan), and the total scale in the fourth quarter of 2023 was 121.11 billion yuan.

"Internet C-end customers are more sensitive to product rate discounts, sales convenience, digital operations and services. By utilizing the huge Internet traffic group, the coverage is wider and can better fit the customer group with lower net worth that banks cannot cover, which will help to expand the pie of the public offering industry and promote market development." A person from the Golden Eagle Fund said that due to their natural Internet attributes, third-party institutions pay more attention to user experience and more diverse investment education content and methods. "In addition, the business of independent third-party institutions has begun to develop, allowing the agency business to expand from the retail market to the entire market, and the customer base has also expanded from retail investors to professional asset management institutions." The above-mentioned person from the Golden Eagle Fund said.

Talking about the future development direction of third-party fund sales agencies, the above-mentioned person from Xiangcai Fund said that different third-party fund sales agencies have different resource endowments. On the one hand, for large third-party agencies, such as Ant Fund, Tiantian Fund, Teng'an Fund, etc., they are expected to continue to convert a large number of potential C-end customers by virtue of their own platform traffic and operational advantages; on the other hand, for third-party agencies that mainly focus on institutional business, such as Jiyu Fund and Huicheng Fund, they will benefit from the general trend of institutional transformation of the capital market, but they will also face more intense market competition. In addition, other small and medium-sized third-party sales agencies will face greater survival challenges and need to combine their own resource endowments to find breakthroughs in the path of differentiated and characteristic development.

"At present, with the further deepening of the fee reform in the public fund industry, it is expected that third-party sales agencies will gradually shift to a 'customer-centric' buy-side investment advisory model, effectively enhance investors' sense of gain and experience, and help the positive cycle of the public fund industry." The above-mentioned person from Xiangcai Fund said.

The above-mentioned person from the Tianxiang Investment Consulting Fund Evaluation Center said that third-party sales agencies should be more professional and refined, and provide more professional services for specific types of fund products or customer groups, so as to enhance their competitiveness. At the same time, strengthen compliance and risk management. As supervision becomes stricter, third-party sales agencies will pay more attention to compliance and risk management to avoid regulatory penalties and maintain their reputation. "In addition, third-party sales agencies can provide diversified services and give full play to their flexibility, which is different from traditional sales agencies, in addition to traditional fund sales services, such as wealth management, asset allocation, etc., to increase income sources." said the above-mentioned person from the Tianxiang Investment Consulting Fund Evaluation Center.

(Editor: Xia Xin Reviewer: He Shasha Proofreader: Yan Jingning)