1. Asstt. Professor, Govt. Degree College Boys Anantnag, Kashmir, India; bilalsheikhphd@gmail.com
2. Institute of Business Management, Karachi Pakistan; mrferooq_ahmad @gmail.com
3. Institute of Business Management, Karachi Pakistan; amnaqureshi1093@gmail.com

*             Correspondence: amnaqureshi1093@gmail.com

Keywords: bank wealth management; net product worth; management strategy

1. INTRODUCTION

Unit net value refers to the value of the net equity after subtracting the assets and liabilities of wealth management products measured at fair value [1]. It is one of the indicators used to reveal the current value and risk of wealth management products. Investors’ Subscription and redemption are usually carried out at net value and distribution at early termination. To promote the transformation of bank wealth management net value [2], banking financial institutions should take cash management products as the main transformation direction in the short term, actively deploy net value products in the long term, establish investment research teams in a timely manner and actively prepare for the establishment of wealth management subsidiaries [3]; regulatory authorities should improve basic accounting. The system standardizes management requirements, strengthens public risk education to improve customer awareness, and improves the information disclosure system [4].

2. ANALYSIS OF NET VALUE OF BANK WEALTH MANAGEMENT PRODUCTS

2.1-Issue of Non-Net-Worth Management Products

The current operating status of the bank’s wealth management business is: new and old products and assets coexist, and the asset management business of the bank’s parent bank and the business of its wealth management subsidiaries run in parallel [5]. Although regulation still tolerates Old businesses, the surviving scale of old products should continue to decline. According to regulatory requirements, all old products that do not meet the new regulations must be withdrawn from the market before the end of the year. Less than half a year is left before the transition period ends. However, in order to avoid the financial gap caused by the accelerated withdrawal of old products and the insufficient supply of new products, many banks are still issuing non-net-worth financial products [6]. According to the query results of China Financial Network, there are about only non-net-worth products that exist on the date of year, month, and day, and the issuing institutions include state-owned banks, joint-stock banks, and some city commercial banks, such as China Construction Bank, Huaxia Bank, and Bank of Jilin [7]. Transparency of information disclosure still needs to be improved after the net worth transformation; the disclosure of information by banks has improved significantly. As of the end of the year, among all newly issued net worth products, the proportion of products that have disclosed net worth data reached 10%. However, compared with funds and international banks, the disclosed [8]. In terms of timeliness and completeness, there is still a big gap. It is mainly manifested in the following two aspects: First, in terms of disclosure frequency, a few institutions have not formed a system for regularly releasing product-related reports, and some products have not disclosed net worth data according to the open frequency [9]. A number of products in the “Zhaozhi” series and “Zhaorui” series have not publicly released quarterly reports on the bank’s website. Second, in terms of disclosure content, the disclosure of product balances is not optimistic. According to the statistics of Puyi Standard, as of the end of the month, the number of products with product balances disclosed in regular reports only accounted for % of all net worth products; the top ten holding asset data were disclosed [10]. Currently, state-owned banks disclose such data in the best situation, and the proportion of disclosed products is only about 10%. Net value management strategies of bank wealth management products to strengthen the industry standardization of wealth management net value and information disclosure [11]. The managers of wealth management products, banks, or wealth management companies, are obliged to disclose information about wealth management products. Information disclosure involves the protection of investors’ rights and interests, which is an important part of investor suitability management and an important guarantee for ensuring the authenticity of net worth [12]. According to the requirements of the new wealth management regulations that should be fully disclosed, wealth management product managers should strengthen the disclosure of wealth management information, which can be disclosed through multiple channels such as the bank’s official website, mobile terminals, and China wealth management website [13]. It is recommended to clarify the numerical elements, disclosure frequency, channels, penetration disclosure requirements, etc., of financial products and financial information disclosure to ensure that the description of relevant valuation methods is accurate and clear. In accordance with the unified requirements for information disclosure, banks or wealth management companies should ensure date and data consistency when disclosing information through different channels. It is suggested to further play the role of the unified information disclosure platform of the wealth management industry of China Financial Network so that investors can understand that wealth management products have codes and can be checked, prevent “flying bills,” facilitate query and comparison, help “sellers do their best” and “buyers are responsible,” protect Investor rights [14]. There must be a clear system, system support, and personnel management for the release of net worth, and it must be able to accept questions from customers. Reasonable and standardized financial net worth disclosure is conducive to improving the recognition of net worth wealth management products [15].

2.2 Strengthen public risk education and improve customer awareness

Regulatory departments should give full play to their guiding role, actively stimulate the self-discipline spirit of commercial banks, continue to strengthen the self-education of investors, make overall plans, and take multiple measures simultaneously in order to create a transparent, standardized, and healthy bank wealth management market [15]. Regulatory agencies should actively encourage commercial banks and related professional media to give full play to their advantages, help the public recognize and understand the true characteristics of wealth management products in various forms, accept the concept of “buyer emptiness,” and make ordinary investors passively accept wealth management products recommended by banks [17], to actively pay attention to and compare various products and make independent investment choices, cultivate rational investors, and promote the healthy development of the wealth management market [18]. Banking institutions should strengthen their construction and improve their software and hardware capabilities. First, banking institutions should strictly follow regulatory requirements, improve the content of disclosure reports, unify product disclosure indicators, including net worth, income performance [19], investment strategies, operations, underlying assets, etc., and disclose net worth and income-related information according to the frequency of product opening data. The second is to establish an investment research team. Cultivate own investment and research talents to make product design more reasonable and more in line with market expectations. Effectively control product deviation within a certain range, and try to meet investor expectations [20]. The third is to focus on the improvement of financial technology strength. Recruit and train talents, innovate and develop financial investment, sales, management, and other systems that meet regulatory requirements and the needs of banks and investors [21]. Relying on system construction, develop new ways and models of publicity and sales. Online publicity and sales can be added to the user experience new elements, such as providing investors with experience funds and experience time so that investors can get in touch with more investment markets and perceive investment risks, and promote the growth of investors and the financial market [22].

2.3 Increase Product Innovation

Small and medium-sized banks should firmly grasp the fundamental goal of serving the real economy, fully understand market demand, and combine their resource endowments to define key product categories. Each development stage seeks opportunities within its circle of competence [23]. Customer characteristics can be subdivided from product minimum purchase amount, term, risk preference, etc., to understand investor behavior and to meet the diversified investment needs of ordinary individual customers, high-net-worth customers, corporate customers, and interbank customers [24]. Vigorously develop financial technology, apply it to intelligent recommendations, customer group portraits, etc., build a net-worth wealth management product system around the entire life cycle of customers and further enrich product supply. On the product investment side, various investment scopes and operating modes can be used to meet the diversified investment needs of customers [25].

2.4 Role of Third-Party Independent Custodians

Custody institutions have participated in the operation of wealth management products, and their role as the person responsible for net worth accounting should be strengthened. The new regulations on financial management require “realizing substantive independent trusteeship,” which clarifies the responsibilities of trusteeship institutions from the institutional level [26]. During the operation of wealth management products, custody institutions should strictly perform their duties in independent custody, valuation, accounting, clearing, settlement, investment supervision [27], information disclosure, etc., and implement penetrating custody throughout the entire life cycle [28]. The manager should give full play to the role of the custody institution when making investments and measuring assets and liabilities, and the asset and liabilities measurement plan needs to be implemented after consultation and agreement with the custody institution [29].

2.5 Strengthen the Construction of net worth Management Team

There is uneven progress in transforming banks’ wealth management net worth and the phenomenon of “polarization.” It is recommended that banks strengthen the construction of wealth management teams and professionalism [30]. Specifically, the first is to strengthen the capabilities of management personnel in research, product design, asset allocation, risk prevention and control, etc., and enrich the types of net worth wealth management products to meet the needs of different customer groups [31]. The second is to do a good job in the whole chain management of products based on meeting the suitability requirements of investors, accurately identifying the investment goals and risk preferences of customers, and increasing investor education and publicity for net worth wealth management products [32]. The third is to accelerate the update of relevant supporting systems to adapt to the change in operating logic after the net worth transformation. Building a product risk management system is to establish rules and regulations. Implement the system concept first and standardize business processes [33]. The second is to strengthen the risk identification and assessment of innovative products. Product design should be “simple, transparent, and risk controllable.” Before it is officially launched [34], it must pass the review of relevant functional departments such as risk management, legal compliance, financial accounting management, and consumer protection. At the same time, the issued products should be consistent with their own management level, risk control level, and information system support capabilities [35]. The third is to pay more attention to investor suitability management, focus on anti-fraud and investor protection for individual customers, and establish an emergency response mechanism. The fourth is to adopt scientific and reasonable methods to prudently manage product operation risks [36]. According to the investment strategies and performance benchmarks determined during product design, the risk of deviation is monitored to ensure the stability of the product style [37].

5. CONCLUSIONS

As a medium and business carrier between bank asset management institutions and investors, wealth management products directly reflect competitiveness and brand image. For wealth management products, the net value of wealth management assets is also called net product value, product net asset value, product total net value, etc. It refers to the value of the product’s total asset value minus product liabilities, and the value of assets and liabilities are measured at fair value. Promoting breaking rigid payment expectations and developing net worth wealth management products is the direction of wealth management business transformation. To summarize the discussion, bank wealth management is the preferred channel for Chinese people to manage assets and deposits. There are many issuers and participants, reflecting the characteristics of inclusive finance. In addition, bank wealth management is an important way of indirect financing from the perspective of capital utilization and whether investors ultimately bear the risk directly. In the wealth product market, net worth wealth management products have grown significantly and become the main force in the market. However, there is still a big gap between the transparency of product information disclosure, and funds, the non-net-worth wealth management products are still issued, and performance comparison benchmarks are not realized. There are problems, such as shortcomings in the education of readers. To this end, regulators, banking institutions, investors, and other forces need to work together to promote the steady development of the bank wealth management product market.

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