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Our reporter Fang Lingchen

Recently, many companies including Orient Fund, Ping An Fund, Baoying Fund, Huatai-PineBridge Fund, etc. have successively issued announcements stating that they will terminate their cooperation with the fund sales agency China Minsheng Wealth Fund Sales (Shanghai) Co., Ltd. (hereinafter referred to as "China Minsheng Wealth") in related sales business.

Since the beginning of this year, fund companies and fund sales agencies have frequently "broken up". For example, many fund companies have previously issued announcements to terminate their cooperation with Xi Que Wealth Fund Sales Co., Ltd. (hereinafter referred to as "Xi Que Wealth"), Beijing Zhongzhi Fund Sales Co., Ltd., Beijing Zengcai Fund Sales Co., Ltd. and other institutions in fund sales business. In the view of industry insiders interviewed, if the fund sales volume and other indicators of the sales agency do not meet the requirements of the fund company, the cooperation may be terminated. At present, against the background of intensified competition in the fund sales market and sluggish fund sales, the challenges of survival and development faced by sales agencies have intensified. Existing sales agencies should actively expand sales channels and improve fund sales capabilities.

Several fund companies officially announced

Breaking up with China Minsheng Wealth

Recently, many fund companies have officially announced their "breakup" with Zhongmin Wealth. For example, Galaxy Fund issued an announcement on August 16, saying that after consultation with Zhongmin Wealth, it decided to terminate Zhongmin Wealth's relevant sales business for Galaxy Fund's funds from August 16, 2024. On the same day, Huatai-PineBridge Fund also issued an announcement stating that in order to protect the interests of investors, after consultation with Zhongmin Wealth, it would terminate Zhongmin Wealth's handling of the company's fund subscription, application, regular fixed investment and fund conversion and other related sales business from August 28, 2024.

For investors who have held funds under fund companies through Zhongmin Wealth, the fund companies remind investors to handle redemption or transfer of custody before the relevant date. For example, China Universal Asset Management stated in the announcement that investors can handle the transfer of custody or redemption of fund shares by themselves before August 30, 2024. If investors do not handle it, the company will directly transfer the existing shares to the company's direct sales platform for investors. Subsequent investors can handle fund transaction inquiries and other services through China Universal Asset Management.

Public information shows that Zhongmin Wealth was established in Shanghai in November 2014. It is a professional fund sales platform under China Minsheng Investment Co., Ltd. with a registered capital of 100 million yuan. According to Wind data, as of August 18, Zhongmin Wealth has cooperated with 24 fund companies and has sold 947 funds on behalf of them. On August 1, the agency sold 1,345 funds on behalf of them.

Yang Delong, chief economist of Qianhai Kaiyuan Fund, told the Securities Daily reporter: "When fund companies choose sales agencies, they mainly focus on the sales agencies' fund sales and service capabilities. Specifically, the sales agencies' fund sales volume, the number of sales staff, the market influence they have and many other aspects will be taken into consideration by the fund companies. If the sales agency's sales capabilities and sales volume do not meet the fund company's requirements, the cooperation may be terminated."

Sales Agency

Active or passive "exit"

Judging from the current fund agency market situation, competition between different types of fund agency agencies (such as securities companies, banks, independent third-party sales agencies, etc.) and within each type of fund agency agency is relatively fierce, and the "Matthew effect" is significant. Wind data shows that as of August 18, the average number of funds sold by public fund agency agencies in the market was 2,235. Among them, 90 agencies sold more than 5,000 funds, but there were also agencies that sold less than 100 funds.

In the current environment, fund sales agencies as a whole face more challenges. Yang Delong said: "The current market conditions are relatively sluggish, and many fund sales agencies have relatively low sales. In addition, the public fund industry has generally reduced fees, and the income of sales agencies has also been affected to a certain extent. This is a problem currently faced by many fund sales agencies, especially some small and medium-sized fund sales agencies."

In the above context, some fund sales agencies have been "eliminated" either actively or passively. According to incomplete statistics from reporters, since the beginning of this year, Beijing Hengyu Tianze Fund Sales Co., Ltd., Qingdao Lehong Fund Sales Co., Ltd., Huarong Rongda Futures Co., Ltd. and other institutions have taken the initiative to apply for cancellation of public fund sales business licenses. Xi Que Wealth issued an announcement in mid-July that due to the needs of business development and adjustment, Xi Que Wealth decided to stop fund sales business. In addition, the public fund sales business license of Chengdu Huayi Hengxin Fund Sales Co., Ltd. was cancelled.

In Yang Delong's view, competition in the fund distribution market is intensifying, and various existing sales institutions should actively expand sales channels, improve fund sales capabilities, and enhance their service capabilities to customers.

Source: Securities Daily