Funding targets not met, multiple bank wealth management products fail to launch! Industry insiders: products need to break free from the "same old" predicament

Financial Daily Reporter | Pan Ting Li Yuwen
Financial Daily Editor | Yang Yi

Recently, several wealth management companies such as Huaxia Wealth Management, Pudong Bank Wealth Management, and China Merchants Bank Wealth Management announced that their newly issued wealth management products failed to establish, mainly because the total amount raised did not meet the lower limit. According to incomplete statistics from FaXun Wealth Management Network, since the beginning of this year (up to now), 40 fixed-income products have failed to issue, most of which are low to medium risk (R2 or R1).

The Daily Economic News reporter noted that by 2025, the size of the bank wealth management market continues to expand. However, since the beginning of this year, many new bank wealth management products have failed to issue due to “insufficient fundraising.”

How should wealth management companies break the deadlock of “products failing to establish due to insufficient fundraising”? Given the context, considering that residents’ risk appetite remains low in the short term, besides low-risk wealth management products, what other more stable “alternatives” are available?

40 Wealth Management Products Fail to Issue

On March 19, Huaxia Wealth Management announced that Huaxia Wealth Management HeXiang Fixed Income Wealth Management Product No. 37 failed to establish because the total amount raised did not reach the lower limit specified in the product prospectus.

According to Tonghuashun statistics, in March, Huaxia Wealth Management had six products that failed to establish, including “Huaxia Wealth Management HeXiang Fixed Income Wealth Management Product No. 37,” “Fixed Income Debt-type Closed-end Wealth Management Product No. 1317,” “Pure Debt Fixed Income Closed-end Wealth Management Product No. 354,” “Yue’an Xin Fixed Income Pure Debt Closed-end Wealth Management Product No. 83,” “Fixed Income Debt-type Closed-end Wealth Management Product No. 1381,” and “Fixed Income Debt-type Closed-end Wealth Management Product No. 1002.”

According to the Daily Economic News reporter, all six products are closed-end net value-type fixed income wealth management products, mainly with medium-low risk levels, generally more stable. In terms of issuance scale, many products set the threshold at 50 million yuan, with “Huaxia Wealth Management Fixed Income Debt-type Closed-end Wealth Management Product No. 1381” having a lower limit of 5 million yuan.

In addition, according to incomplete statistics from FaXun Wealth Management Network, since the beginning of this year, 40 fixed-income wealth management products have failed to issue.

In fact, besides Huaxia Wealth Management, products from Pudong Bank Wealth Management, China Merchants Bank Wealth Management, and others have also failed. For example, Pudong Bank Wealth Management announced that on March 4, 2026, it issued Pudong Wealth Management Qian’an Yue Company Exclusive Wealth Management Product No. 2603. As of March 10, 2026, the subscription period ended, but the total subscription amount did not reach the issuance scale specified in the product prospectus, so the product failed to establish. In mid-February, China Merchants Bank Wealth Management announced that its “Zhaorui Jiayue (Technology Growth) Daily 370-day Holding Period No. 1 Fixed Income Enhancement Wealth Management Plan,” originally scheduled for fundraising from February 6 to February 10, 2026, did not reach the issuance scale limit due to actual fundraising conditions, and according to relevant agreements, the plan was not established.

Bank Wealth Management Market Surpasses 30 Trillion Yuan

The “China Banking Wealth Management Market Annual Report (2025)” (hereinafter referred to as the “Report”) shows that by the end of 2025, the outstanding scale of the bank wealth management market was 33.29 trillion yuan, an increase of 11.15% from the beginning of the year. Throughout the year, 3,340 new wealth management products were issued, raising 76.33 trillion yuan; the number of investors holding wealth management products reached 143 million, a 14.37% increase from the start of the year; and the total returns generated for investors amounted to 730.3 billion yuan.

However, in February 2026, the number of new wealth management products issued across the market decreased month-on-month. According to Puyi Standard data, in February this year, a total of 2,018 new wealth management products were issued, a decrease of 522 from the previous month. Among them, 397 were open-ended products with an average benchmark return of 1.85%; 1,621 were closed-end products with an average benchmark return of 2.35%. During the same period, wealth management companies issued 1,518 products, down 376 from the previous month, accounting for 75.22% of the total market issuance.

Zeng Gang, Chief Expert and Director of the Shanghai Financial and Development Laboratory, told the reporter that product issuance failures can still occur. Under the low-interest-rate environment, products lacking clear positioning and differentiation will continue to face liquidation pressure, which is a normal market phenomenon of survival of the fittest.

Zeng Gang further explained that the main reasons for wealth management product fundraising shortfalls are threefold. First, yields have been continuously declining, greatly reducing product attractiveness and investor subscription willingness. Second, wealth management products are highly homogeneous, making it difficult to generate effective demand. Most failed products are closed-end fixed income types, with underlying assets uniformly in bonds and interbank certificates of deposit, leading investors to face simple yield comparisons rather than differentiated choices, resulting in market diversion. Third, there is a long-standing mismatch between supply and demand.

Senior researcher Su Xiaorui from Suxi Zhiyan pointed out that products failing to establish due to not reaching the lower limit of fundraising have some common features. She told the reporter that these include being fixed income, low to medium risk, and closed-end net value types.

“Such failed wealth management products mainly target risk-averse, stable investors, whose core needs are capital preservation and stable income, rather than high returns. The failure is due to multiple factors from supply, demand, channels, and external environment. On the supply side, high homogeneity; on the demand side, rising liquidity preferences; but the performance benchmarks of these products are not attractive enough to the market,” Su said. She added that the phenomenon of future wealth management product failures may become normal.

How Can Wealth Management Firms Break Through?

So, how can wealth management companies overcome the problem of “products failing to establish due to insufficient fundraising”? Zeng Gang believes efforts should be made in three areas: product restructuring, operational logic, and investor trust.

“To break out of the ‘cookie-cutter’ dilemma, product restructuring must cater to investors’ liquidity preferences by increasing the supply of open-ended and short-term products,” Zeng told the Daily Economic News. He suggested appropriately introducing multi-asset strategies such as equities, gold, and REITs (Real Estate Investment Trusts) to enrich the ‘Fixed Income +’ strategy, making products more competitively differentiated. The scale of ‘Fixed Income +’ strategy products grew by over 70% year-on-year in 2026, confirming market recognition of this direction.

“Secondly, operational logic needs to shift from scale-driven to value creation,” Zeng said. If it is judged before issuance that fundraising is unlikely to meet the target, it should be proactively terminated rather than blindly pushed forward. Focusing resources on creating fewer, high-quality flagship products is more strategic than maintaining a poorly performing product.

The final step is rebuilding investor trust. “In the era of net value, professional risk communication and transparent information disclosure are key to retaining clients,” Zeng emphasized. Helping investors truly understand that ‘low risk does not mean capital preservation’ and establishing a long-term companionship mechanism amid market volatility are essential to maintaining scale and reputation in a competitive environment.

Su Xiaorui also offered her perspective on asset allocation and channel expansion: wealth management firms can strengthen asset allocation, shifting from ‘mainly fixed income’ to ‘diversified and balanced,’ increasing holdings in equities; simultaneously, they should expand channels and develop comprehensive lifecycle services, leveraging professional research and reliable client engagement to promote fund retention and enhance client stickiness.

What Other Stable “Alternatives” Are There?

Considering that residents’ risk appetite remains low in the short term, besides low-risk wealth management products, what other more stable “alternatives” are available? The investigation found that products such as savings bonds and dividend insurance, which have their own characteristics, are favored by many investors while maintaining stability.

● Savings Bonds: Flexible liquidity, can be pledged or redeemed early

On March 10, the first batch of 2026 savings bonds (certificate type) was issued. On that day, many bank branches quickly sold out their quotas. The maximum issuance amount this year has been 15 billion yuan, with 3-year bonds offering an annual coupon rate of 1.63%, and 5-year bonds at 1.7%.

A few years ago, such yields might not have been attractive, but with declining interest rates, the current fixed deposit rates at major state-owned banks are only 1.25% for 3-year and 1.3% for 5-year deposits, making savings bonds more advantageous in comparison.

Another advantage is their flexible liquidity—investors can use savings bonds as collateral for loans at the issuing bank or redeem them early during the holding period, with interest paid based on actual holding time and tiered rates.

● Dividend Insurance: “Guaranteed + Variable” dual income, suitable for long-term holding

Recently, banks have promoted dividend insurance with a preset interest rate of 1.75%, mainly including dividend-type annuities and whole life dividend insurance.

Dividend insurance offers a guaranteed interest rate, with the insurer distributing surplus earnings based on actual business performance, resulting in variable dividends. With the “guaranteed + variable” dual income, dividend insurance is quite attractive in the current low-interest environment.

According to the financial team of Guoxin Securities Research Institute, dividend insurance shows three key attractions: first, the guaranteed rate provides a safety cushion similar to a deposit, satisfying residents’ desire for principal safety; second, the variable dividend linked to insurer investment performance can, during a declining interest rate cycle, generate returns exceeding bank deposits through long-term allocation, meeting residents’ demand for moderate income growth; third, the typically long insurance period encourages long-term planning, helping to mitigate market volatility caused by short-term capital inflows and outflows. Some products also offer policy loans, further addressing liquidity needs.

Currently, the guaranteed rate for dividend insurance is mostly 1.75%, with the total yield including dividends exceeding 3%.

● Brokerage Channels: Flexible reverse repurchase periods

Besides bank-distributed wealth management products, brokerage channels also offer stable options like government bond reverse repurchase agreements.

Reverse repos are essentially short-term loans: investors lend funds through the stock exchange and earn fixed interest, with the government bonds used as collateral. At maturity, the principal and interest are automatically returned to the investor.

The advantage is that they are collateralized by government bonds, regulated by the stock exchange, and yields are generally higher than bank deposits for similar periods. Maturities range from 1 day to 182 days, allowing investors to choose based on their idle funds.

Typically, at month-end, quarter-end, year-end, or before holidays, liquidity demand surges, pushing yields higher—making these periods ideal for participating in reverse repos. Note that early redemption is not allowed; at maturity, the principal and interest are automatically credited to the investor’s account.