Core Viewpoint - The public fund industry is undergoing significant reforms, leading to a transformation in fund sales institutions as they adapt to shrinking income from trailing commissions and upcoming sales fee reductions [1][2][3]. Group 1: Impact of Fee Reductions - The first major impact on fund sales institutions is the reduction of trailing commissions, with management fees and trailing commissions both decreasing since the initiation of the public fund fee reform in July 2023. The management fee income is projected to be 124.73 billion yuan in 2024, down 8.1% from 2023, while trailing commissions are expected to be 35.48 billion yuan, a decrease of 8.7% [2]. - Many fund sales institutions, such as China Merchants Bank and Tonghuashun, reported a significant decline in their distribution income, with reductions around 20% [2]. - The second wave of impact is anticipated with the upcoming sales fee reductions, which are expected to be implemented by May 2025, further constraining the income potential for sales institutions [3]. Group 2: Transition Strategies - Fund sales institutions are shifting from a seller-driven model to a buyer service model in response to the fee reductions. This includes adjusting product offerings from fixed-income products to multi-asset and equity products to meet diverse investor needs [4][5]. - Companies like Yingmi Fund are focusing on deepening their buyer advisory model, moving towards a fee structure based on advisory services rather than sales commissions [5][6]. - The industry is also seeing a push towards enhancing investor experience and focusing on long-term performance, with institutions like Tencent Licai Tong implementing comprehensive advisory services to improve investor decision-making and outcomes [8][9]. Group 3: Evaluation and Performance Metrics - The regulatory framework is evolving to include a classification evaluation mechanism for fund sales institutions, emphasizing metrics such as investor returns and holding periods, which will guide internal assessment and incentive structures [6][7]. - Companies are increasingly focusing on aligning their performance metrics with investor outcomes, with organizations like Yingmi Fund integrating user satisfaction and trust into their performance evaluations [7][10]. - The emphasis on improving investor holding experiences is becoming a common goal across the industry, with strategies aimed at enhancing investor education and risk awareness to foster better long-term investment behaviors [10].