In the first half of this year, the bank wealth management market experienced a sustained recovery in survival scale, approaching the 28 trillion yuan mark, driven by the "bond bull" and "deposit relocation". Overall, facing the challenge of asset shortage, the allocation logic of bank wealth management has undergone a profound restructuring; At the same time, the regulatory sword directly targets the gray area of "pseudo net worth". In order to protect the interests of investors, multiple institutions have actively triggered a wave of early termination of products. In addition, the construction of a transparent and standardized system for information disclosure in the bank wealth management market is also accelerating; In order to benefit investors, wealth management institutions have launched multiple rounds of fee reductions, and the intensive turnover of the first generation of executives indicates that the industry's transition from old to new is constantly advancing. These key trends collectively present a new picture of the development of the banking wealth management market in the first half of the year. As of the end of June, due to the positive impact of the "bond bull" market since the end of last year and the "deposit relocation", the scale of bank wealth management has rapidly climbed, approaching the 28 trillion yuan mark, an increase of about 2 trillion yuan from the beginning of the year. The "seesaw effect" between deposits and wealth management is quite significant due to the central bank's suspension of "manual interest rate hikes". On the one hand, in the first five months of this year, residents' deposits increased slightly compared to the same period last year, and non-financial enterprise deposits decreased by 2.45 trillion yuan; On the other hand, the scale of bank wealth management increased by over 2 trillion yuan in April alone, showing a "super seasonal" growth rate far exceeding the same period in previous years. It is reported that as of the end of June, five joint-stock wealth management companies including CMB Wealth Management, CITIC Bank Wealth Management, Everbright Wealth Management, Shanghai Pudong Development Bank Wealth Management, and Ping An Wealth Management, as well as ten institutions including ICBC Wealth Management, Bank of China Wealth Management, Agricultural Bank of China Wealth Management, CCB Wealth Management, and Bank of Communications Wealth Management, had a total wealth management scale of 16.1 trillion yuan, a decrease of about 670 billion yuan from May. Compared to previous years, the decline in cross seasonal benefits of bank wealth management in the first half of this year has significantly narrowed. According to Securities Times reporters' calculations, taking the 10 wealth management companies mentioned above as examples, the monthly decline in total scale in March and June was 5% and 4% respectively, narrowing the decline compared to the same period last year. The research report released by Ma Kunpeng's team at CITIC Securities predicts that with the redistribution of residents' wealth and the ban on "manual interest payments", the scale of wealth management will continue to rise in the second half of the year, and the annual scale is expected to exceed 30 trillion yuan. In terms of product shelves, with the further decline of deposit interest rates, the yield of cash management wealth management products has been affected. The scale of loss of such products in the first half of the year is relatively large, and multiple wealth management companies have experienced a decline of over 100 billion yuan. According to Puyi Standard data, as of the end of June, the scale of cash based wealth management products was 7.72 trillion yuan, a decrease of about 840 billion yuan from the beginning of the year. In addition, benefiting from the good performance of the bond market, fixed income products have grown significantly this year, and they are also the main force driving the recovery of bank wealth management scale. According to Securities Times reporters, the total scale of fixed income products of the 10 wealth management companies mentioned above increased by about 1.23 trillion yuan compared to the beginning of the year, and increased by about 1.51 trillion yuan at the end of the second quarter compared to the end of the first quarter. After the asset shortage reconstruction and allocation logic returned to the growth track, bank wealth management encountered the dilemma of "easy to develop but difficult to do". In the context of investors' cautious risk appetite, deposits and bonds have always been the absolute mainstay of bank wealth management allocation. In the first half of the year, the net financing amount of urban investment bonds was negative and interest rates continued to decline, compounded by the suspension of "manual interest payments" and other phenomena. The industry has once again called for a shortage of assets. According to Wind data, the net financing amount of urban investment bonds decreased by over 170 billion yuan in the first half of this year. According to institutional statistics, only 6% of urban investment bonds in the market have a valuation exceeding 3%. Multiple securities research reports believe that with the continuous deepening of localized bonds, the stock debt of urban investment will continue to decline in the future, so the market will still be in a state of lacking high-quality urban investment products. Another factor driving down the yield of bank wealth management is the ban on "manual interest payments". Before wealth management, it was very active to allocate interest bearing deposits such as agreement deposits. Now there is no 'manual interest bearing' anymore, and the pricing of high deposit ratio products will definitely decline. "A fixed income investment manager of a bank wealth management company bluntly stated that the voices of industry insiders also reveal the challenges that bank wealth management may face after the ban on 'manual interest bearing'. As of the end of last year, the total investment assets of wealth management products reached 29 trillion yuan, with a proportion of 26.7% invested in cash and bank deposits, but the proportion of interest bearing deposit assets is still unknown. According to CITIC Securities' calculation, the scale of "manual interest supplement" deposits is about 20 trillion yuan, mainly concentrated in state-owned large banks and joint-stock banks. Some practitioners believe that the decline in returns of wealth management products or the benchmark for newly issued products is not only due to regulatory factors, but also more affected by the weakening of the bond market. After the ban on "manual interest payment", the revenue of open-ended products with high deposit ratios, especially some cash management products, even experienced a cliff like decline. After the ban on "manual interest supplementation", institutions have made predictions on the allocation logic of wealth management. Some institutions believe that bank wealth management may reduce the allocation of deposit assets; Some institutions also believe that wealth management funds will still be allocated to deposits, but will only sink towards the tail of the bank entity. Another viewpoint suggests that the focus of financial allocation will include long-term bonds, gold, and high-quality bonds. A senior wealth management investment manager stated that their team is more focused on interbank certificates of deposit and interest rate bonds in the short to medium term to offset the coupon payments. In recent years, with the entry of bank wealth management net value into the deep water zone, the tolerance of channels for product net value drawdown has further decreased, and wealth management companies have accelerated the migration of products towards a "stable and low wave" direction. There are two feasible ways to smooth the net asset value curve of wealth management products: one is to start with the most basic positions and increase the proportion of low volatility assets, such as increasing the allocation of ABS (asset-backed securities) and deposits; The second approach is to start with valuation methods, with a representative approach being to use trust based smoothing mechanisms to regulate product returns. The latter has attracted regulatory attention. It is reported that in mid June, a regional financial regulatory bureau in East China issued a notice to trust companies within its jurisdiction on further strengthening the compliance management of cooperation between trust companies and wealth management companies, which mentioned the situation mentioned above. At the same time, regulators also require trust companies to conduct compliance checks on issues such as cooperating with wealth management companies to trade risk assets between different wealth management products and improperly using valuation methods in conjunction with wealth management products. When the gray practices of borrowing trusts are being pursued and blocked, wealth management companies will increasingly return to "starting from the most basic positions" to smooth the net asset value curve and increase the proportion of low volatility assets. In fact, since the beginning of this year, the existing preferred stocks that allow self built valuation models have become the object of competition for some wealth management companies. According to a survey conducted by Securities Times reporters, two state-owned wealth management companies hold preferred shares worth around 10 billion yuan, while the remaining four companies claim to have "relatively small amounts"; Several top ranked joint-stock wealth management companies responded by stating that their holdings do not exceed 10 billion yuan. According to Wind data, the stock size of preferred stocks in banks is about 750 billion yuan. Due to the small stock, some wealth management companies need to "rush" to allocate funds. Although a small number of bank wealth management and investment managers are pursuing such assets, the method of stabilizing valuations through preferred stocks has not yet gained widespread popularity. A professional investment manager from a joint venture wealth management company said that some "fixed income+" products will be equipped with preferred stocks, but their size is small and difficult to buy, and holding existing products will not be easily traded. Some investment managers also believe that due to the small trading volume, preferred stocks will only be considered when assets are scarce, which is more of a "forced choice" during asset shortages. Early termination of trendy wealth management products does not necessarily mean substantial losses. With financial institutions placing greater emphasis on consumer protection, many wealth management products were terminated early in the first half of the year, attracting high market attention. In June, several bank wealth management companies announced the early termination of some of their wealth management products, most of which were closed-end wealth management products. The reasons for early termination of financial products include early maturity of investment projects, small product size, and protection of investor interests. According to Puyi Standard Data, as of June 13th, a total of 1053 net worth wealth management products were terminated early this year, a year-on-year increase of 19.93%. There are two main reasons for the early termination of a large number of products: firstly, some products have already met the performance standards ahead of schedule, and the managers take profits normally based on market fluctuations and possible investment targets. In the first half of this year, the market experienced an unexpected "small bond bull" trend, and some products have already accumulated profits in advance. For the subsequent market trend, managers may consider high-quality assets to be insufficient. In the current era where regulators and investors increasingly value the "performance compliance rate", some wealth management companies terminate their products after communicating with customers when the actual performance of the products reaches the performance benchmark. Secondly, some products are too small in scale, similar to mini funds of public funds, which is not conducive to subsequent investment management. The wealth management company terminated the product based on the consideration of reducing management costs. Compared with public funds, bank wealth management has long had the problem of insufficient standardization, uniformity, and transparency in information disclosure. For example, there are different channels for information disclosure, not limited to the parent bank's website, its own website and app, and sales agency channels, and the disclosure channels have not been completely unified. In addition, as a relatively authoritative display platform, China Wealth Management Network is expected to play the role of a unified public information disclosure platform, but it has not yet achieved full coverage of information disclosure entities and product information. In addition, there are differences in the performance display range, net asset disclosure frequency, and valuation methods of similar financial products. Institutions usually tend to focus on disclosing indicators that are beneficial to their own products, to the extent that displaying returns significantly raises investors' psychological expectations. In terms of setting performance comparison benchmarks, many banks have completely different ways of setting them for wealth management, presenting a variety of phenomena in benchmark setting. The disclosure of quarterly operation reports for wealth management products also varies. At the end of June this year, the State Administration for Financial Regulation issued a total of 29 million yuan in fines against five wealth management companies. Compared to previous fines, this batch of fines focuses more on violations of disclosure regulations in wealth management business and the penetration and identification of underlying assets. In the reasons for issuing fines to the involved wealth management companies, the issue of non-standard information disclosure was pointed out. Strict supervision will undoubtedly promote the industry to improve the quality of credit reporting. Industry insiders have pointed out that bank wealth management needs to establish a more standardized, transparent, and unified information disclosure system and strictly enforce it in order to maximize the reduction of investor suitability risk. Since last year, the "fee reduction trend" in the asset management industry has swept through bank wealth management, with multiple wealth management companies launching promotional activities related to product fee rates, such as reducing fixed investment management fees, sales service fees, custody fees, etc., and actively marketing. In the first half of this year, the pace of wealth management companies increasing rate discounts has not stopped. According to incomplete statistics, since June this year, more than 10 bank wealth management companies have issued fee adjustment announcements, and some institutions have even directly reduced the fee rates of some wealth management products to zero. The rate adjustment mainly focuses on fixed income and cash management products, and the types of rates involved in the adjustment include fixed management fees, sales handling fees, and custody fees. According to a research report by CITIC Securities, in the first half of 2024, the basic and management fees of wealth management companies are also decreasing, while sales and service fees remain relatively stable. Some industry insiders believe that the recent reduction in fees also has certain peculiarities. Against the backdrop of "deposit relocation", some wealth management companies are trying to attract customers by lowering fees