China’s economy has entered into a new normal. The macroeconomic development is slowing down and going through the constructional adjustment, and the traditional industry is increasingly facing fierce competition. There is a rapid growth in Internet+, logistics network, and other emerging industries. The fast changing macroeconomic environment and industrial innovation exacerbates challenges in corporate transformation.

On December 16th, in the conference themed “Corporate Restructure in the New Normal, Brand Operation and Wealth Management”, Professor Jin Li, Director of the National Center for Financial Research (NCFR) and the Associate Dean of Guanghua School of Management, Peking University,  shared his views on the present wealth management issues in China. The below is extracted from his speech.

China's fast growing wealth population has been accumulating tremendous wealth. However, in this rapid accumulating process, the wealth management service targeted to this group has not caught up with the trend. The slow development of wealth management industry cannot effectively meet the needs of China’s rapid growing new rich and has hence created a huge gap in between.

Upon my observation, Chinese money invested in China usually has a poor performance. Indeed, there are a lot of problems in China's current investment market, such as moral crisis, lacking of supervision, and inefficiency in dealing with the comprehensive management of wealth and the growing effective demands to maintain value and further to appreciate money.

Many people presented in today’s meeting who are involved in this industry know clearly, that after the capital market has developed into a relatively high level, a more specialized and layered financial service intermediary would emerge. This is in fact closely associated with asset management. The current situation in China is that the new wealthy people haven’t formed the habit of paying fees for the wealth management service they receive.

We believe that beyond this unwillingness to pay for wealth management is a market in lack of education and right order. We observe the fast growth of high-end population investing overseas. Many families  consider to immigrate. The immigration to neighboring countries like Southeast Asian countries, including economic entities such as Taiwan and Hongkong,  finds no easy way to turn back. Hence, the wealth management industry faces challenges of not only bad money expelling good ones, but also the fierce international competition. If it fails, it would fall really hard. So, what can we scholars do about it? Many people may stereotype scholars good at talking not acting. But the financial field is, as the matter of fact, quite practical. On the current primary stage of financial development, Peking University is determined to take some actions. We may not succeed, but we hope to fill in the gap as much as we can.

At present, under this highly distrust atmosphere toward wealth management service, the so-called "shopping guide" and "nutritionist" model in China is hard to make money. We thus attempt to advocate free service and educate the rich about the wealth management, while cultivating trusts between two parties.

Peking University would like to build up a platform, a showcase of real shopping guide and nutritionist. It’s like to go to a financial supermarket. All products are in one basket to be chosen. Some products are good for pregnant women; some are good for aged people. And there will be some simple and straightforward analyses as well. What we really want to do is to teach the wealth people how to deal with their money, how to regard value preservation and appreciation. A free platform would greatly help people to get used to the wealth management idea and realize the benefits they can achieve through this incubator.

We also plan to cooperate with professional institutions, output the analyzed results to them to help their business development. The idea is to offer a game demo. You could play the first 20 rounds with no charge. If you want to play more, then you would be introduced to a professional agency. Our purpose is to make people aware the value of this product. We deliver the initial entry level of service to the crowd. After slowly purification,  we then hand over the people in great need to high-end service agency. By doing this, we will actually foster customer consumption habit, and provide an export service to high-end commercial institutions for their survival.