Bank's New Year Marketing Resource Reallocation: Insurance "Attracts Funds," Wealth Management "Cools Off"

“Are bank wealth management products still worth buying?” On February 26, at a bank branch in Beijing, an investor inquired at the wealth management counter. Amidst market fluctuations, some bank wealth management products are under pressure to deliver returns, with several investors reporting that their products yielded zero or even negative returns for the day.

To cope with market volatility and attract more customer funds, wealth management institutions have launched special products for the Lantern Festival and the Spring Festival. Meanwhile, the industry is experiencing a fee reduction wave, with many institutions lowering fixed management fees and sales service fees on their products. However, investors seem unconvinced.

Industry insiders believe that the contradiction between investors’ return expectations and risk preferences will fully surface by 2026. The two main ways for wealth management firms to address this are: first, extending the duration by allocating mid- to long-term assets to lock in returns; second, improving product yields through diversified asset allocation. However, both approaches have pros and cons and face multiple practical constraints.

Limited Growth in Scale

January is typically a peak month for bank wealth management markets, but this year, the industry performed relatively restrainedly. According to Guoxin Securities, the stock of bank wealth management products in January 2026 remained roughly flat month-on-month, with slight growth. The reason is that commercial banks focused on their “opening red” loan campaigns and prioritized marketing of higher-commission products like dividend insurance over wealth management products.

“Banks are not focused on selling wealth management products at the start of the year,” said Kong Xiang, Chief Analyst of Non-Banking Financials at Guoxin Securities. During visits to bank branches, many client managers actively promoted insurance products such as dividend and annuity insurance. In the context of declining market interest rates, insurance products, which can lock in long-term returns in advance, have become popular. Dividend insurance, with its “guaranteed return + floating dividends” model, has rapidly gained traction, fueling sales in bancassurance channels.

Furthermore, product net value fluctuations have caused some investors to adopt a wait-and-see attitude toward bank wealth management products. “In March, I have a deposit maturing, and I planned to buy a wealth management product with that money. But recently, the yields on several products I looked at haven’t been good, so I plan to wait. If I renew my fixed deposit, I can at least get over 1% interest annually without worrying about losses,” said investor Xiao Li.

Xiao Li showed the reporter a fixed-income, bi-weekly open-ended wealth management product rated R3. From February 4 to 25, its holding gains shrank from about 320 yuan to around 280 yuan. “This product is relatively stable. I bought two products in early January, but so far, their returns are far below my initial expectations,” he said.

During the visit, some client managers noted that some clients came with year-end bonuses or matured fixed deposits, but after hearing about the products, they preferred to stick with principal-protected fixed deposits or insurance products that lock in current interest rates. “Clients first ask about the returns and risks of the products. We explain that fluctuations in net value are inevitable,” said one client manager.

Multiple Strategies to Attract Funds

Before and after the Spring Festival, a key period for residents to manage idle funds and plan wealth, the bank wealth management market has seen a new wave of product launches: many banks introduced special products for the Lantern Festival to attract customers.

For example, Hecheng Rural Commercial Bank launched the “Harvest Fortune 2026 No.045 Closed-End Net Value Wealth Management Product (Lantern Festival Exclusive),” with a risk level of R2, a fundraising period from February 26 to March 4, and a term of 3-6 months. Hunan Bank launched the “Fuying Series (Net Value) 26005 Wealth Management Product (Lantern Festival Exclusive),” also R2 risk level, with a fundraising period from February 25 to March 3, and a term of 1-3 years.

Lou Feipeng, researcher at China Postal Savings Bank, said that after the Spring Festival holiday, many wealth management institutions have launched new products mainly to attract returning funds and maturing deposits. In a low-yield environment, they also aim to enhance customer stickiness and brand penetration through differentiated product design, meeting the needs of investors with different risk tolerances, and achieving growth in both assets under management and customer base.

Some institutions attract clients with newly issued special products, while others lower product fee rates. Currently, many wealth management firms are reducing fixed management fees and sales service fees on their products.

On February 26 alone, China Merchants Bank Wealth Management issued over ten notices on fee discounts. For example, they plan to offer a temporary reduction in the fixed management fee for the “CMB Wealth Management Zhaoying Daily Gold 139 Cash Management Plan” from 0.3% to 0.02% from March 1 to April 1. Similarly, the “Zhaoying Tainli 90-Day Holding Fixed Income Plan No. 9” will see its sales service fee reduced from 0.2% to 0.06% from February 28 to March 29.

“To thank customers for their long-term support and reward new and old clients, the company is offering fee discounts,” said Bank of China Wealth Management in a series of notices from February 25. For example, from March 5 to June 5, the “BOC Wealth Management - Stable Rich Fixed Income Enhanced Global 60-Day Holding No. 1” will have its fixed management fee reduced from 0.20% to 0.05%, and its sales service fee from 0.20% to 0.10%.

“Since the start of this year, the industry’s fee-cutting wave has temporarily boosted sales, but the effect is limited and phased,” said Xue Hongyan, a special researcher at Suzhou Commercial Bank. Regarding the impact of fee reductions, he noted that lowering fees directly reduces investors’ holding costs but is unlikely to attract new clients, mainly serving as a “price subsidy” for existing customers. When choosing bank wealth management products, clients prioritize the issuing institution’s creditworthiness and the stability of product performance.

Exploring Two Paths to Enhance Returns

Several wealth management professionals said that fee reductions are mainly temporary discounts and cannot be sustained long-term. For wealth management firms, the most urgent task is to resolve the contradiction between investors’ expected returns and their risk appetite.

A manager from a city commercial bank’s wealth management division told the reporter that, under the backdrop of breaking the implicit guarantee, although investors remain conservative and seek stability, past strong performance of fixed-income products has led some clients to have unrealistic return expectations, still hoping for higher yields from low-risk products.

“With current market interest rates remaining low and the deepening of the net-value transformation of bank wealth management, it’s a significant challenge for asset-side management to meet investors’ higher return expectations,” said a representative from Hangzhou Bank Wealth Management. Banks are leveraging their expertise in investment research to improve product yields within existing risk constraints. Currently, the industry is mainly exploring two paths to boost returns.

One is extending duration to lock in yields. By increasing allocation to medium- and long-term bonds, earning from maturity spreads and capital gains during rate declines, they aim to amplify returns in a falling interest rate cycle. However, this strategy faces multiple constraints: first, in a declining rate environment, the narrowing of the yield curve reduces the strategy’s space and sustainability; second, lengthening duration makes product net value more sensitive to interest rate fluctuations, which can lead to increased net value volatility, conflicting with the goal of improving investor experience.

The second is improving yields through diversified asset allocation. This involves using fixed income as a stable core, supplemented by equities, convertible bonds, and other assets, seeking enhanced returns through diversification. This “fixed income + equity” approach aligns well with investor demands and has become a consensus strategic direction. However, challenges remain: increased asset allocation requires higher asset selection, allocation, and timing abilities from wealth management firms, which currently lack sufficient research and performance history in equities and multi-asset fields, necessitating strengthening internal and external capabilities. Additionally, adding equities and other assets will inevitably cause net value fluctuations, requiring firms to further enhance suitability management of their products.