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many banks were named for violations in fund sales. on september 17, beijing business daily found that banks such as industrial and commercial bank of china, china merchants bank, and china guangfa bank and their branches have been issued warning letters or ordered to rectify due to violations in fund sales this year. among the violations, the relevant business personnel did not obtain fund practitioner qualifications, and the fund sales product promotion was not compliant, which became the "hardest hit areas". in the field of fund sales, banks play a leading role with their advantages in outlets and customer base, but with the continuous efforts of securities companies and independent fund sales institutions, as well as the influence of market conditions, many banks are facing challenges in fund sales. analysts pointed out that in order to enhance the competitiveness of fund sales, banks need to cooperate with publicity under the premise of compliance, and at the same time, they need to enhance their business capabilities, sales capabilities and professional level.

compliance issues in business development

in the field of fund sales, the role of banks as the main force is undeniable, but the compliance issues in the process of business development cannot be ignored. on september 17, beijing business daily reporters found that this year, icbc chongqing branch, icbc ningxia hui autonomous region branch, construction bank qinghai branch, postal savings bank qinghai branch, bank of china qingtian county branch, ping an bank, china merchants bank chongqing branch, china guangfa bank chongqing branch, citic bank changchun faw branch have been issued warning letters or ordered to rectify due to violations of fund sales regulations.

from the perspective of illegal behaviors, "working without a license" has become a "hard-hit area" for fund sales violations. for example, the chongqing branch of the industrial and commercial bank of china was issued a warning letter by the chongqing securities regulatory bureau because some employees who did not obtain fund practitioner qualifications were engaged in fund sales management. the changchun faw branch of citic bank was also issued a warning letter by the jilin securities regulatory bureau due to inadequate qualification management of fund sales staff. the qinghai branch of the construction bank was ordered to correct by the qinghai securities regulatory bureau because the heads of fund sales business in some branches did not obtain fund practitioner qualifications, and the compliance and risk control personnel responsible for fund sales business did not obtain fund practitioner qualifications.

compliance is the bottom line for financial institutions to conduct fund sales business. since the release of the "supervision and administration measures for publicly offered securities investment fund sales institutions" (hereinafter referred to as the "sales measures") in october 2020, the supervision of fund sales business has been further standardized. according to the "sales measures", the number of personnel who have obtained fund business qualifications in the department responsible for fund sales business shall not be less than 1/2 of the number of employees in the department. the head of the department shall obtain fund business qualifications and have more than 2 years of experience in fund business or more than 5 years of work experience in financial institutions; the person in charge of fund sales business of a branch shall obtain fund business qualifications.

in addition to "working without a license", some banks also have problems such as non-compliance in the promotion of fund sales products. take the chongqing branch of china merchants bank as an example. during the application process for ordinary investors of fund products to become professional investors, the branch did not explain to investors the differences in fulfilling suitability obligations for different types of investors, and did not warn them of possible investment risks; some promotional materials used in the fund sales process published the past performance of specific products of fund managers, and did not cover the past performance of all similar products managed by the fund manager; some promotional materials had one-sided and exaggerated promotion of fund managers' past performance, and were issued a warning letter. ping an bank also received a warning letter from the regulator for conducting fund sales business in the form of giving away fund shares.

financial commentator guo shiliang believes that bank fund sales violations are related to compliance. engaging in fund sales without obtaining fund practitioner qualifications violates the principle of compliance. "unlicensed employment" and exaggerating past performance may be related to banks' eagerness to expand sales channels and business scope, but compliance is not up to standard and violations are not conducive to the standardized development of the industry.

still need to improve service professionalism

for a long time, the fund sales landscape has been dominated by banks, securities companies, and independent fund sales institutions. due to their large number of outlets and strong customer stickiness, banks are often the main force in fund sales.

however, with the continuous efforts of securities companies and independent fund sales institutions, as well as the influence of market conditions, many banks faced challenges in fund sales in the first half of this year, leading to a decline in banks' intermediary business income.

taking industrial and commercial bank of china as an example, the 2024 semi-annual report shows that the bank's net income from fees and commissions was 67.405 billion yuan, a year-on-year decrease of 8.2%. in this regard, the bank said that due to factors such as the reform of public fund rates, the implementation of the insurance "reporting and bank integration" policy, capital market fluctuations, and changes in investor risk preferences, personal financial management and private banking, corporate financial management, and asset custody income have decreased. for example, china merchants bank's wealth management fees and commission income in the first half of 2024 was 11.437 billion yuan, a year-on-year decrease of 32.51%, of which agency fund income was 2.132 billion yuan, a year-on-year decrease of 25.35%. the bank said that this was mainly affected by the reduction of fund fees and the decline in the scale and sales of equity funds.

according to the list of the top 100 fund sales institutions in terms of the scale of public fund sales in the first half of 2024 disclosed by the asset management association of china, from the perspective of the scale of equity fund sales, there are still 25 commercial banks in the top 100, but ant fund has surpassed china merchants bank and jumped to the first place with a scale of 692 billion yuan. china merchants bank has a scale of 467.6 billion yuan, followed by tiantian fund, industrial and commercial bank of china, and china construction bank, with scales of 343.3 billion yuan, 326.1 billion yuan, and 246.2 billion yuan respectively.

at a time when the fund sales landscape is becoming increasingly fierce, how can banks continue to improve their fund sales capabilities on the basis of compliance? zhou yiqun, a senior financial policy expert, believes that in recent years, with the rise of internet channels, non-bank institutions have formed a positive impact on the traditional commercial banks in the field of fund sales. the competition landscape of fund sales is very fierce, and commercial banks are under great pressure. however, this is not an excuse for banks to lower their compliance requirements. fund sales are a traditional strength of commercial banks and one of the important sources of intermediary business income. commercial banks should attach great importance to the training of fund sales personnel, improve the comprehensive quality of professionals, and strengthen qualification management and certification management. improve the bank's agency risk control system and continue to promote the healthy development of fund sales business.

guo shiliang said that in order to improve the competitiveness of fund sales, banks need to cooperate with publicity under the premise of compliance, and at the same time they need to enhance their business capabilities, sales capabilities and professional standards.

"fund sales will continue to be diversified in the future." wang hongying, director of the china (hong kong) financial derivatives investment research institute, suggested that commercial banks should first establish a better incentive system to increase sales, and then use financial technology to vigorously develop internet financial sales methods such as apps. in addition, investor education methods should be improved to further increase sales share.

beijing business daily reporter li haiyan