Classification of wealth management products

Generally, according to whether the principal is guaranteed or not, financial wealth management products are divided into three categories: guaranteed fixed income products, guaranteed floating income products and non-guaranteed floating income products. The financial plan of guaranteed capital and guaranteed income refers to a financial plan in which a commercial bank promises to pay a fixed income to its customers according to the agreed conditions, and the bank bears the investment risks arising therefrom, or the bank promises to pay the minimum income to its customers according to the agreed conditions and bear the related risks, and other investment income is distributed by the bank and customers according to the contract, and the related investment risks are shared by the bank and customers. Guaranteed income products include two types of products: guaranteed fixed income products and guaranteed minimum income products. Capital preservation and fixed income products refer to products in which banks pay investors full principal and fixed income according to the contract. When investors buy such products, they will get fixed income at maturity, and all investment risks will be borne by banks. However, investors do not get fixed income unconditionally, and the regulatory authorities stipulate that banks cannot unconditionally promise fixed income to prevent banks from absorbing deposits at high interest rates. Therefore, in fixed-income products, the contract stipulates that the bank has the right to terminate the product in advance at a specific time or under specific conditions, while investors do not. Because the investment risk of fixed-income wealth management products is borne by banks, investors are mainly worried about the risk of premature termination of products, and the probability of such risks is low. Therefore, investors mainly grasp two comparisons when choosing fixed-income products:

First, compare similar products, and choose products with the same term and products with different terms on the basis of considering liquidity demand and interest rate policy;

Second, compared with time deposits, the important factor for investors to choose wealth management products, especially fixed-income products, is that their income level is higher than deposit interest. Guaranteed minimum income products refer to products in which banks pay investors full principal, minimum fixed income and other contingent investment income according to the contract. The main feature of this kind of products is that the bank promises to pay the minimum income, and the risks arising from this income are borne by the bank; Other contingent investment income is distributed according to the contract, and investors need to bear the risk that this part of the income is zero. The financial plan with capital preservation and floating income refers to a financial plan in which a commercial bank guarantees the payment of the principal to the customer according to the agreed conditions, and the investment risks other than the principal are borne by the customer, and the actual income of the customer is determined according to the actual investment income. Commercial banks can use trust rights without prior approval when carrying out related financial services (auxiliary services). At the same time, most overseas countries implement interest rate marketization and floating exchange rate policies. Therefore, commercial banks can provide customers with a variety of cross-cutting products, and their wealth management business is mainly based on consultants and valet financing, with simple classification and nature definition. In contrast, People's Republic of China (PRC) Commercial Bank Law clearly stipulates that commercial banks are not allowed to engage in securities and trust business, and interest rates are not fully market-oriented. In such a market environment and operating conditions, commercial banks face more constraints in developing and selling personal financial products, and the potential legal risks are greater. There are many kinds of specific capital preservation floating income, such as capital preservation trust products, capital preservation linked stocks, commodity indexes and so on. Among them, loan trust refers to a kind of financial business in which the trustee accepts the entrustment of the principal, distributes the funds deposited by the principal according to the object, purpose, term, interest rate and amount stipulated by the principal (or trust plan), and is responsible for recovering the principal and interest of the loan at maturity. The client has full autonomy over the object and purpose of the loan, and at the same time, he can take advantage of the trust company's advantages in enterprise credit and fund management to increase the security of funds and improve the efficiency of the use of funds. Trust loans mainly include joint venture investment trust loans, technical transformation trust loans, compensation trade trust loans, housing trust loans and so on.

First of all, there is an upper limit to the income of the project. The income comes from the loan interest, and the relevant interest rate standards of the People's Bank of China are implemented. This means that the client's upper income limit is the loan interest rate, and he is faced with the deduction of this part of the income from the trust company's extraction management fee. Different ways of drawing management fees mean different degrees of income deduction, which directly affects the interests of investors.

Secondly, although trust companies have chosen relevant projects for loans according to their own professional skills, they can only rely on trust in trust companies because of asymmetric information. However, the trust company has just been reorganized and its own credit mechanism has not yet been established. The credit risk of loans must be controlled through external mechanisms. 1) Demand deposits and reserves cannot be allocated too much, and investors can use short-term wealth management products or have no fixed term.

2) In terms of wealth management product configuration, investors can establish the following ideas:

First of all, we should pay attention to the liquidity of wealth management products. After the interest rate enters the rising channel, investors will face greater interest rate risk: the yield of various investments will rise with the interest rate, and if the long-term investment yield cannot fluctuate with the interest rate, it will lead to actual losses for investors.

Secondly, in the context of rising interest rates, demand deposits and reserves cannot be allocated too much. Investors can use short-term wealth management products or open (rolling) wealth management products instead, such as ICBC's "Tong Ling Online" and Bank of China's "cumulative" wealth management products, which have the characteristics of "higher returns and can be realized at any time". 1) Term structure: ultra-short term instead of cash.

2) Single product: Capital investment is very important.

For unitary products, the investment direction is the decisive factor that affects the risks and benefits of wealth management products. Investors can pay attention to the following points:

First, properly avoid industries and projects regulated by policies, especially commercial housing projects in the real estate industry.

Second, pay attention to industries with policy support and financial products invested in these industries, such as water conservancy construction, power grid construction and emerging energy.

The third is to treat financial products in investment and consumer industries differently.

3) Structured products: Choose the target carefully.

In terms of structured products, it is particularly important to choose a good hook target.

4) Exchange time for space and high returns.

If investors can accept certain liquidity risks, it is suggested that investors allocate some structured wealth management products with relatively long term, among which they can pay attention to the structured wealth management products linked to some red chips in order to exchange time for higher returns.