Low-Risk Financial Products Not Selling? Multiple Bank Wealth Management Products Fall Short of Fundraising Goals This Year

Why does product homogeneity become the main cause of supply and demand imbalance in the wealth management market?

Banks’ newly issued wealth management products are hard to sell, with several products failing to be issued this year.

According to incomplete statistics from Beike Finance, there have been 14 terminated wealth management products issued by Huaxia Wealth Management alone. Most of these are closed-end, net value-type fixed income products, primarily with medium-low risk levels. Boyin Wealth Management and Guangyin Wealth Management have also announced the failure of their wealth management products this year.

Dong Ximiao, Chief Economist at Zhaolian and Deputy Director of Shanghai Financial and Development Laboratory, pointed out that severe product homogeneity and demand-supply mismatch are fundamental reasons. Additionally, in the environment of persistently low interest rates and “asset scarcity,” the yield space for fixed income products has been compressed. Their performance benchmarks generally fall into the “2%” or even “1%” range, significantly weakening their attractiveness to investors, which is also an important reason.

Severe product homogeneity? Huaxia Wealth Management only in March had 6 wealth management products “fail”

Since March, Huaxia Wealth Management has repeatedly announced the failure of multiple products. Six products, including “Fixed Income Debt-Type Closed-End Wealth Management Product No. 1317,” “Pure Fixed Income Closed-End Wealth Management Product No. 354,” and “HeXiang Fixed Income Wealth Management Product No. 37,” all failed to meet the minimum issuance scale specified in their prospectuses due to insufficient fundraising.

Most of these products are closed-end, net value-type fixed income wealth management products, mainly with medium-low risk levels.

According to the product prospectus, “HeXiang Fixed Income Wealth Management Product No. 37” has a planned issuance scale lower limit of 50 million yuan, mainly investing in money market instruments, standardized debt assets, non-standardized debt assets, and other fixed income assets, with equity assets, and a fixed income investment ratio of 90% (inclusive) to 100%, and equity investment ratio of 0% to 10%.

“Fixed Income Pure Debt-Type Closed-End Wealth Management Product No. 354” and “Fixed Income Debt-Type Closed-End Wealth Management Product No. 1317” both invest 100% in fixed income financial instruments, including money market tools, standardized debt assets, and other fixed income instruments compliant with regulatory requirements.

Prospectus for Huaxia Wealth Management’s “Fixed Income Debt-Type Closed-End Wealth Management Product No. 1317.” (Screenshot of the prospectus)

Since the beginning of this year, Huaxia Wealth Management has terminated 14 products.

In February, Boyin Wealth Management announced that its “CaiShou YouLai” series fixed income one-year closed-end wealth management products failed to meet the minimum fundraising scale and thus could not be established; in January, Guangyin Wealth Management’s “Happiness Add Profit” closed-end fixed income public offering product No. 3059 also failed to meet the minimum scale requirement specified in its prospectus.

Dong Ximiao pointed out that multiple fixed income, closed-end products failed to meet the fundraising scale for various reasons. Among them, severe product homogeneity and demand-supply mismatch are fundamental causes. The failed products are concentrated in the closed-end, medium-low risk fixed income category, with “cookie-cutter” design and lack of differentiation.

“Investors, worried about future uncertainties, generally show a strong preference for liquidity and are reluctant to lock funds in closed-end products that last months or even years, leading to a clear mismatch between supply and demand.”

Dong Ximiao believes that under the macro environment of low interest rates, the yields of wealth management products may continue to decline, and failures in issuance may persist. Meanwhile, as wealth management companies operate with increasing sophistication, products with too small a fundraising scale, which could lead to inefficiencies in subsequent operations, may be proactively halted. This is a natural market mechanism driving the wealth management market toward higher quality development.

Growth in the scale of wealth management market operations and a future trend toward refined management

The China Banking Wealth Management Registration and Custody Center’s “Annual Report on the Chinese Banking Wealth Management Market (2025)” shows that by the end of 2025, the wealth management market’s outstanding scale reached 33.29 trillion yuan, an increase of 11.15% from the beginning of the year. The total earnings generated for investors over the year amounted to 730.3 billion yuan, a year-on-year increase of 2.87%.

By the end of 2025, the number of investors holding wealth management products reached 143 million, a growth of 14.37% from the start of the year, significantly higher than the 9.88% growth in 2024. Among them, individual investors accounted for 98.64%, and institutional investors numbered 1.94 million, accounting for 1.36%.

“Public fund issuance success rate is relatively high mainly because product registration requires significant manpower and resources. To ensure success, substantial investments are made in channel promotion, marketing, and customer outreach.”

Senior financial regulation expert Zhou Yiqin pointed out that the issuance costs for wealth management products are lower, the process is simpler, and sunk costs are small. Therefore, wealth management firms are not overly committed to guaranteeing issuance. If channel promotion is insufficient or product design does not sufficiently meet market needs, lacking core competitiveness, and market recognition is low, fundraising may fall short.

Zhou Yiqin further explained that this is also related to the market-oriented transformation of the distribution ecosystem. In earlier years, the predecessor of wealth management companies, the bank’s asset management department, was tightly coupled with the parent bank’s distribution channels, relying on internal channels to guarantee product sales, ensuring a high success rate.

“Now, the wealth management distribution ecosystem is becoming more diverse. As other banks’ distribution channels expand, channel performance assessments are becoming more market-oriented. They no longer prioritize selling products from their parent bank or partner institutions out of loyalty but instead focus on products’ historical returns, risk control capabilities, and customer fit. Only high-quality products can secure channel resources, while average products are naturally phased out by the market.”

Zhou Yiqin said that wealth management product operations have clear minimum scale requirements because if the fundraising scale is far below this standard, the subsequent costs for research, operation, and risk control will rise sharply. Therefore, some wealth management firms rationally choose to let small-scale fundraising fail proactively to avoid operational inefficiencies, which is also a sign of refined management.

Beijing News Beike Finance Reporter Xu Yuting Editor Chen Li Proofreader Mu Xiangtong