Brokerage asset management faces a trend-driven transformation and actively explores strategic transition pathways

This article is transferred from: China Securities Journal

Guolian Minsheng Securities President Ge Xiaobo:

The brokerage asset management industry is facing a trend of transformative changes and actively exploring strategic transformation paths

● Reporter Lin Qian

On March 26, the 2026 Global Southern Asset Management Forum, hosted by China Securities Journal, was held in Beijing. In his keynote speech, Guolian Minsheng Securities President Ge Xiaobo stated that under the impact of multiple factors such as low interest rates, declining industry fees, and the explosion of AI technology, the brokerage asset management industry is facing a trend of transformative changes. To create a differentiated competitive advantage, strategic transformation is needed in areas such as diversification strategies, integration with wealth management, and collaboration with corporate clients.

In the trading services sector, Ge Xiaobo believes that brokerages need to focus on ETF market-making to fill the gaps in trading services. At the same time, they should deepen the reform of the market-making mechanism and continuously promote the construction of the entire ETF ecosystem.

Building Differentiated Advantages in Asset Management

“From international experience, brokerage asset management plays a very important role in the family of asset management,” Ge Xiaobo stated. Over the past five years, the scale of public funds has expanded, while the scale of brokerage asset management has declined. Furthermore, the brokerage asset management industry should focus on differentiated competition, as the scale effect is limited. However, the concentration of domestic brokerage asset management is relatively high, which indicates that there are issues with a lack of distinctiveness and insufficient functionality in current domestic brokerage asset management. In the context of a low-interest market, coupled with the explosive growth of AI and big data applications, brokerage asset management needs to make strategic choices in human, capital, and technological investments to seek differentiated development.

Regarding the strategic transformation path for brokerage asset management, Ge Xiaobo believes that it is necessary to delve into diversified trading strategies. Over the past decade, the correlation between stocks and bonds has been increasing, significantly weakening the risk diversification effect of traditional stock-bond portfolio asset allocation. Therefore, there is an urgent need for alternative strategies to compensate. In recent years, the fastest-growing asset category abroad has been alternative investments, which, from a yield perspective, are primarily driven by high-yield strategies.

Specifically, Ge Xiaobo indicated that low beta, low correlation, and high Sharpe strategies play an important role in asset allocation. Therefore, brokerage asset management should focus on fixed income, as the ability to construct products based on future cash flows is a key capability for fixed income business in asset management. Brokerage asset management should leverage its licensing advantages to make strategies more flexible, upgrade towards multi-strategy directions, and deeply build fundamental analysis and financial engineering research capabilities. At the same time, brokerage asset management should also utilize the service advantages conferred by private equity attributes to make more efforts in serving institutional investors and high-net-worth clients.

“Brokerage asset management is also an important tool platform for wealth management,” Ge Xiaobo stated. As a securities company, asset management and wealth management are closely linked. Asset management should provide shelf tools and account systems to support the implementation of wealth services. Asset management should also empower each other with wealth management, deepening professional service capabilities for clients. The core of wealth management is truly understanding clients and gaining their trust, while the core of asset management is excellent execution capabilities for strategies. The integration of wealth management and asset management is an important direction for the future of securities companies’ asset management.

Brokerage asset management can also leverage opportunities to serve corporate clients through securities companies to explore structured opportunities. Ge Xiaobo believes that brokerage asset management can focus on structured financing, including deepening areas such as consumer finance, leasing, and supply chain finance asset securitization, and thoroughly explore quality assets in asset securitization while seizing development opportunities in commercial real estate and industrial parks through private REITs. At the same time, brokerage asset management can also focus on capital market business, linking with the developmental genes of investment banking ecosystems, providing full-chain services, and seizing alternative investment opportunities.

Enhancing Trading Service Capabilities

Securities companies are important trading service providers for asset management institutions. While building differentiated competitive advantages in asset management, the upgrading of trading service capabilities is also a strategic pivot that securities companies cannot overlook. Ge Xiaobo stated that securities companies, leveraging their licensing advantages and comprehensive service capabilities, have broad development space in market-making trading. However, compared to mature markets, domestic brokerages still have a significant gap in developing ETF market-making mechanisms, urgently needing to fill these gaps through ecosystem improvement and efficiency enhancement.

In Ge Xiaobo’s view, the ETF market has been the fastest-growing market in China’s asset management sector over the past few years, with securities companies playing a crucial role in its development. As market makers, securities companies are both liquidity providers and market stabilizers, capable of promoting the development of the ETF market. They integrate functions such as “operational services, product sales, research services, and market-making trading,” serving as an important bridge connecting ETF products and clients, and embodying the value of comprehensive financial services, deeply participating in the entire lifecycle of ETF products.

However, this also imposes certain requirements on securities companies. Ge Xiaobo mentioned that, on one hand, there are low latency requirements for information systems, and on the other hand, there are cognitive demands on trading teams, including the realization of subscription and redemption processes, basis management, and risk management tools.

“In order to better serve the capital market ETF market, there are several aspects of potential that can be leveraged in the domestic market-making mechanism,” Ge Xiaobo believes. Currently, the number of domestic market makers is significantly insufficient; there is a lack of mutual incentives between issuers and market makers, and mechanisms such as additional incentives for issuers and convenient borrowing for hedging need to be established. In the graded authorization system, more permissions should be granted to market makers in subscription and redemption or inventory aspects. From the perspective of ETF market-making operational rules, it is also necessary to enhance the efficiency of cross-market ETF subscriptions and redemptions, promote the realization of intraday block trading functions, and drive the innovative development of more ETF-related derivative financial instruments.

Ge Xiaobo stated that ETFs are currently one of the most important investment tools, with the scale of equity ETFs exceeding the overall scale of equity mutual funds. They serve as the most important tool and platform for institutional investors to participate in the market, providing retail investors with higher transparency and lower costs to participate in the market through ETFs.

“The construction of the entire ETF ecosystem is crucial, and securities companies still have a long way to go in trading services, and their own capabilities need to be further enhanced.” Ge Xiaobo believes that through improving product systems, optimizing investor structures, and enhancing the number and efficiency of market makers, measures should be taken to promote the maturity of the ETF ecosystem and build an internationally leading ETF market.