Minimum Investment for Select Wealth Products: Just 1 Cent
Recently, several wealth management companies have lowered the purchase thresholds for their financial products. Taking CCB Wealth Management as an example, the company announced that starting from November 13th, the minimum purchase amount and incremental amounts for eight of its fixed-income financial products have been adjusted to "starting at 0.01 yuan, with increments in multiples of 0.01 yuan." The eight financial products adjusted this time all have a risk level of medium-low (level one, level two), and their cumulative net values all exceed 1.
According to an associate professor at Central University of Finance and Economics, in the current market environment, investors' demand for the flexibility and liquidity of funds is increasing. Lowering the product purchase threshold by wealth management companies can attract more small investors, especially those who are new to financial products. At the same time, the fine-tuning of the purchase and incremental units also helps investors achieve more refined financial planning. For instance, the well-known Yu'e Bao has attracted a large number of investors to join the ranks of wealth management through its spare change investment approach.
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Industry insiders have stated that the traditional wealth management industry has primarily served high-net-worth clients in the past. Nowadays, how to provide financial products and services that match the investment risk tolerance of middle and low-income groups has become an important issue in the transformation and development of financial products. Therefore, the concept of inclusive wealth management has attracted much attention as soon as it was proposed.
As the financial product market becomes increasingly mature, the overall investment threshold has shown a downward trend. Since September 2018, the sales starting point for single public financial products has been reduced from 50,000 yuan to 10,000 yuan. After June 2019, with the establishment of wealth management companies, the investment threshold has been further reduced, allowing participation in wealth management with as little as 100 yuan or even 1 yuan. To expand sales scale, some low-risk financial products have even lowered the subscription threshold to one cent.
A researcher at China Postal Savings Bank believes that lowering the purchase amount and incremental amount of financial products is not a simple marketing strategy, but an important measure to practice the concept of inclusive financial services, improve the flexibility of subscription and redemption, and attract more customers to participate in wealth management. This is also a manifestation of wealth management companies attracting customers and improving service quality in market competition.
For investors, lowering the purchase threshold allows more investors to have the ability and willingness to buy financial products. At the same time, it can also cultivate the habit of wealth management and increase the knowledge reserve in this area. For wealth management companies, lowering the purchase threshold can expand market share, enhance product competitiveness, thereby increasing sales revenue, accumulating customers, and strengthening user stickiness.
Reporters have noticed that the investment thresholds of financial products on the market also show a trend of differentiation. While the thresholds for low-risk financial products continue to decrease, the purchase thresholds for high-risk financial products have been raised. For example, BOC Wealth Management increased the subscription starting amount for three of its financial products in August, all of which were adjusted from 1 yuan to 100 yuan.
Some wealth management companies may raise the subscription threshold due to changes in the market interest rate environment, leading to changes in the risk-return characteristics of products, aiming to manage risks by adjusting thresholds. At the same time, raising the subscription threshold also helps wealth management companies more accurately target their customer groups. "Wealth management companies lowering or raising the purchase amount is a market behavior, which helps to segment customers according to their characteristics and provide targeted financial services. With the continuous enrichment of financial products, it is expected that different products will show different development trends based on risk levels, including different subscription amounts, to better meet the differentiated needs of different customer groups," said Lou Feipeng.
However, some investors have expressed that the purchase threshold has little impact on their choice of financial products. Wang Jun, an investor who has been purchasing financial products for a long time, told reporters, "I won't really buy a product that costs only one cent. I am more concerned about the return rate of financial products."
The chief researcher at China United said that although lowering the purchase threshold can attract customers in the short term, in the long run, improving the investment research capabilities of financial products is the key to retaining customers. "Wealth management companies should improve their market judgment and response capabilities, perfect incentive and restraint mechanisms, strengthen basic capacity construction, and enhance investment research levels and talent training, so that investment research capabilities can better match market changes and investor needs," said Dong Ximiao.