Bank's New Year Marketing Resource Reallocation: Insurance "Attracts Funds," Wealth Management "Cools Off"

Jiang Jialin, China Securities Journal

“Are bank wealth management products still worth buying?” On February 26, at a bank branch in Beijing, an investor inquired at the wealth management counter. Amidst market fluctuations, some bank wealth management products are under pressure, with multiple investors reporting that their products yielded zero or even negative returns for the day.

To cope with market volatility and attract more customer funds, wealth management institutions have launched special products such as “Lantern Festival Exclusive” and “Chinese New Year Exclusive.” Meanwhile, the industry has initiated a fee reduction wave, with many institutions lowering fixed management fees and sales service fees for their products. However, investors seem unconvinced.

Industry experts believe that the contradiction between investors’ return expectations and risk preferences will fully surface by 2026. The two main ways for wealth management firms to address this are: first, extending the duration by allocating mid- to long-term assets to lock in returns; second, improving product yield performance through diversified asset allocation. However, both approaches have pros and cons and face multiple practical constraints.

Limited Growth in Scale

January is typically the month for banks to achieve a “good start” in the wealth management market, but this year, the industry performed relatively restrained. According to Guoxin Securities, in January 2026, the stock of bank wealth management products remained basically flat month-on-month, with slight growth. The reason is that commercial banks focused on their loan “opening red” campaign and prioritized marketing of higher-commission products like dividend insurance over wealth management products.

“Banks’ priorities at the start of the year are not on selling wealth management products,” said Kong Xiang, Chief Analyst of Non-Banking Financial Industry at Guoxin Securities. During visits to bank branches, many client managers actively promoted insurance products such as dividend and annuity insurance. In the context of declining market interest rates, insurance products, which can lock in long-term returns in advance, have become popular. Especially, dividend insurance has rapidly risen with its “guaranteed return + floating dividends” model, sparking a sales boom through bancassurance channels.

Moreover, product net value fluctuations have caused some investors to adopt a wait-and-see attitude toward bank wealth management products. “In March, a deposit matures, and I planned to buy a wealth management product with that money, but recently the yields of several products haven’t been good, so I plan to wait. If I renew my fixed deposit, I can at least get over 1% interest annually without worrying about losses,” said investor Xiao Li.

Xiao Li showed the reporter a fixed income, bi-weekly open-ended wealth management product rated R3. From February 4 to 25, its holding return shrank from about 320 yuan to around 280 yuan. “This product is relatively stable. I bought two products in early January, but so far, their returns are far below what I expected,” he said.

During the visit, some client managers said that some clients came with year-end bonuses or matured fixed deposits, but after hearing about the products, they preferred to stick with principal-protected fixed deposits or insurance products that lock in current interest rates. “Clients first ask about the returns and risk levels of the products, and we explain that fluctuations in net value are inevitable,” said one client manager.

Multiple Strategies to Attract Funds

Before and after the Spring Festival is often a key period for residents to manage idle funds and plan wealth, and the bank wealth management market has seen a new wave of product launches: many banks have introduced special products like “Lantern Festival Exclusive” to attract customers.

For example, Hecheng Rural Commercial Bank launched the “Harvest Harvest 2026 No. 045 Closed-End Net Value Wealth Management Product (Lantern Festival Exclusive),” with a risk level of R2, a fundraising period from February 26 to March 4, and a term of 3-6 months. Hunan Bank launched the “Fuying Series (Net Value) No. 26005 Wealth Management Product (Lantern Festival Exclusive),” also R2, with a fundraising period from February 25 to March 3, and a term of 1-3 years.

Lou Feipeng, researcher at China Postal Savings Bank, said that after the Spring Festival holiday, many wealth management institutions have launched new products mainly to attract returning funds and maturing deposits. In a low-yield environment, they also aim to enhance customer stickiness and brand penetration through differentiated product design, meeting the needs of investors with different risk preferences, and achieving growth in both assets under management and customer base.

Some institutions attract customers with newly issued special products, while others lower product fee rates. Currently, many wealth management firms are reducing fixed management fees and sales service fees for their products.

On February 26 alone, Zhaoyin Wealth Management issued more than ten notices on fee discounts. For example, they plan to offer a temporary fee reduction for the “Zhaoyin Wealth Management Zhaoying Daily Gold No. 139 Cash Management Product,” lowering the fixed management fee from 0.3% to 0.02% from March 1 to April 1. They also plan to reduce the sales service fee for the “Zhaoyin Wealth Management Zhaorui Tainli 90-Day Holding Fixed Income Product” from 0.2% to 0.06% from February 28 to March 29.

“To thank customers for their long-term support and reward new and old clients, the company is offering fee discounts,” said China Bank Wealth Management on February 25. For example, from March 5 to June 5, they will reduce the management fee of the “Bank of China Wealth Management - Stable Rich Fixed Income Enhanced Global Multi-Asset 60-Day Holding No. 1” from 0.20% to 0.05%, and the sales service fee from 0.20% to 0.10%.

“Since the start of this year, the industry’s fee-cutting wave has temporarily boosted sales, but the effect is limited and phased,” said Xue Hongyan, a special researcher at Suzhou Commercial Bank. Regarding the impact of fee reductions, he noted that lowering fees directly reduces investors’ holding costs but is unlikely to attract new clients, mainly serving as a “price subsidy” for existing customers. When choosing bank wealth management products, clients pay more attention to the issuing institution’s creditworthiness and the product’s performance stability.

Exploring Two Paths to Enhance Returns

Several industry insiders said that fee reductions are mainly temporary discounts and cannot be sustained long-term. For wealth management firms, the most urgent task is to resolve the contradiction between investors’ expected returns and their risk appetite.

A wealth management officer from a city commercial bank told the reporter that, despite investors’ conservative and prudent risk preferences in the context of breaking the “guarantee” promise, some clients still expect higher returns from low-risk products due to the good performance of fixed income products in recent years.

“Under the current low interest rate environment and the deepening of the net value transformation of bank wealth management, it is quite challenging for asset-side wealth management to meet investors’ higher return expectations,” said a representative from Hangzhou Bank Wealth Management. Banks are leveraging their expertise in investment research to improve product yields within existing risk constraints. Currently, the industry is mainly exploring two paths to increase returns:

First, extending duration to lock in yields. By increasing allocation to medium- and long-term bonds, earning from maturity spreads and capital gains during rate declines, thus amplifying returns in a falling interest rate cycle. However, this strategy faces multiple constraints: one, in a declining rate environment, the narrowing of the yield curve reduces the strategy’s space and sustainability; two, lengthening duration makes product net value more sensitive to interest rate fluctuations, which can lead to increased net value volatility, conflicting with the goal of improving investor experience.

Second, improving yields through diversified asset allocation. This involves using fixed income as a stable core, supplemented by equities, convertible bonds, and other assets, seeking enhanced returns through diversification. This “fixed income + equity” approach aligns well with investor demands and has become a consensus strategic direction. However, challenges remain: on one hand, increasing asset classes requires higher asset selection, allocation, and timing abilities from wealth management firms; on the other hand, adding equities and other assets inevitably introduces net value fluctuations, requiring firms to strengthen suitability management of their products.

(Edited by: Qian Xiaorui)

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