Many might protest when hearing this. That China is ahead when talking about great economies. So I ask,what’s the most powerful country in the world? There’s a good case to be made that it’s China.There are many kinds of power – diplomatic, cultural, military and economic. So an easier question to ask is: What’s the world’s largest economy? That’s almost certainly China.
The country is undergoing major key changes in their wealthy management industry. Now,individual investors have continued to become more sophisticated in their approach to wealth management. There is a gradual shift from bank savings or fixed-income products to more-diversified wealth-management products such as funds and Venture Capital/private-equity types of alternative investment products. In addition, the combination of technology and finance is driving reform in the financial-services and wealth-management sector. For instance,there are online wealth-management platforms that provide comprehensive wealth-management products and services to the growing Chinese mass-affluent population with investable assets.
Chinese investors look beyond their traditional reliance on safe fixed-income and trust products toward equities or overseas assets.
From what I gathered, as of the end of 2016, Private wealth totaled RMB 65 trillion in China, making the country the second-largest private-wealth market next to the US.
Meanwhile, the percentage of total private wealth allocated to savings and property investments has reduced from 83% in 2006 to 60%, while a substantial proportion of personal investment has flowed to financial assets such as wealth management, capital markets, private equity and overseas products. From this analysis, China’s wealth-management market will continue to workout, along with economic transformation and a maturing regulatory environment. As a great economy,it expects to see more investors embracing more-diversified investment solutions through professional organizations.
Of course,you cannot leave out technology at the mention of China. The country has innovated the concept of the robo-advisor which has huge potential in the country. With the fast-growing needs of wealth management and rapidly increasing adoption of the Internet and technology, China expects more investors in their market to accept robo-advisor services to start their journey of asset allocation. However, high trading fees and the lack of Exchange traded fund (ETFs) which is a marketable security that helps to track an index, a commodity, bonds, or a basket of assets are the biggest challenges of the performance of robo-advisors. Chinese financial institutions still need time to develop more products and cut fees. To cultivate rational and healthy development of the Chinese fintech industry, regulators have been actively establishing rules in various market segments, including online lending, insurance, payments etc. With more regulations in place, the fintech industry will be able to achieve healthier and more-sustainable development. Financial institutions in China have adopted a risk-based pricing methodology, developing their investment products by offering different returns to different risk segments. However, for the whole market to get into a more market-driven, risk-based pricing methodology.With this,there will be a long transition process that involves both investor education and industry wide product development. Back to the initial question.So who do think is the most powerful country in the world?