Core Viewpoint - The recent trend of early termination of bank wealth management products is attributed to increased market volatility and challenges in investment, which ultimately aims to protect investors' interests and reduce potential losses [1][2][3]. Group 1: Reasons for Early Termination - In 2023, over 2,000 wealth management products have been terminated early, primarily affecting fixed-income products with risk levels mainly at R2 and R3 [2]. - The early termination of products is seen as a normal response to macroeconomic conditions, market fluctuations, and unexpected events impacting performance [2][3]. - The trend reflects a shift towards net value management in the banking wealth management sector, indicating that early termination may be a strategy to adapt to this new environment [2]. Group 2: Impact on Investors - Early termination is intended to minimize investor losses and safeguard their interests, with many institutions citing "market conditions" and "protecting investor interests" in their announcements [3][4]. - The proportion of products being terminated early is relatively small compared to the total number of products, suggesting that the majority remain unaffected [3]. Group 3: Need for Improvement in Research and Management - The frequency of early terminations indicates a need for banks' wealth management subsidiaries to enhance their investment research capabilities and asset management skills [4]. - Long-term improvements in investment strategies and risk management are essential for better handling of market volatility and enhancing investor experience [4][5]. - There is a call for increased investor education to help clients understand the risks and benefits associated with wealth management products [5].

Core Viewpoint - The banking wealth management industry is undergoing a significant transformation towards true net value management, driven by regulatory reforms aimed at eliminating "pseudo net value" practices, with a key assessment scheduled for mid-2025 [1][3]. Group 1: Regulatory Changes - By the end of June 2025, all wealth management companies are expected to complete their rectification processes, with a mid-year assessment occurring at the end of June 2024 [3][5]. - Regulatory authorities have mandated that wealth management companies must not use closing prices, smoothed valuations, or self-built valuation models to mask product net value fluctuations, instead requiring the use of standardized valuations from recognized sources [3][4]. - The aim of these regulations is to dismantle the "pseudo net value" phenomenon, where companies previously used strategies like "using surplus to cover deficits" to create a false sense of stability for investors [3][4]. Group 2: Challenges Faced by Companies - Wealth management companies face several challenges in compliance, including the need to overhaul existing valuation systems, which involves system updates, process reengineering, and staff training [5][6]. - The methods for managing net value fluctuations are limited, and companies are struggling to control net value volatility in a challenging bond market environment [5][6]. - There is a concern regarding investor acceptance, particularly among older clients who may be sensitive to net value fluctuations, potentially leading to customer attrition [5][6]. Group 3: Investment Research and Asset Allocation - The core of wealth management product valuation lies in accurately assessing the value of underlying assets, with two main methodologies: cost method and market value method [6][7]. - The industry is expected to transition to true net value management, enhancing compliance and transparency, which will allow investors to experience net value changes more directly [7][8]. - Companies are encouraged to improve their investment research capabilities and optimize asset allocation strategies to mitigate the impact of individual asset volatility on product net value [8][9]. Group 4: Investor Education and Communication - Companies should focus on accurate, timely, and transparent information disclosure to help investors understand risks and make informed decisions [8][9]. - Enhancing the investor experience through better access to information and clear risk communication is essential for fostering long-term relationships with clients [8][9]. - There is a need for ongoing investor education initiatives to help clients understand the realities of net value fluctuations and the associated risks [8][9].

Core Viewpoint - Recent reports indicate that some elderly individuals have fallen victim to fraudulent "guaranteed return" investment products promoted by online "investment masters," leading to significant financial losses. The concept of "guaranteed return" in bank wealth management products is a product of specific historical stages in China's financial market, driven by investor demand for "risk-free returns," competitive pressure among banks, and previously lax regulations [1][2]. Group 1: Regulatory Changes - The introduction of the "Guiding Opinions on Regulating Financial Institutions' Asset Management Business" (referred to as "Asset Management New Regulations") in 2018 marked a significant shift in the market, requiring the dismantling of rigid guarantees and the implementation of net value management [1]. - The "Asset Management New Regulations" explicitly state that financial institutions are prohibited from promising capital protection and returns in their asset management activities [1]. - The "Measures for the Administration of Wealth Management Subsidiaries of Commercial Banks" also emphasizes that wealth management products cannot guarantee returns or engage in misleading promotions such as "risk-free profits" [1]. Group 2: Investor Awareness and Risk - Investors must recognize that there are significant differences in risk and return between wealth management products and traditional deposits, with the latter typically offering capital protection and guaranteed returns [2]. - It is crucial for investors to consider their investment experience, risk tolerance, and return expectations when selecting wealth management products to better balance asset safety and value appreciation [2]. - Consumers are advised to be cautious of "high return, no risk" promotional claims and to avoid being misled by short-term high returns. Continuous attention to educational content from financial regulatory bodies and banks is recommended to enhance risk identification and fraud prevention capabilities [2].