Over the past 40 years, the core proposition that Chinese entrepreneurs have been thinking about is how to create wealth, but in fact, what is more challenging than creating wealth is how to inherit it. How to continuously decode wealth management and inheritance issues in exploration, in order to achieve a win-win situation of wealth creation and inheritance, has become one of the core concerns of high net worth individuals in China.
The book 'Black Swan' reveals a logic: what you don't know is more meaningful than what you know. Currently, we are experiencing the largest wealth transfer in human history. A slight change in the political, financial, and business environment may give rise to a small probability of a "black swan" event.
However, the "black swan" event is unpredictable, and high net worth individuals have become the "high-risk group" for wealth disputes, only able to control risks overall, which has given rise to a huge demand for wealth management.
The high net worth population is expanding year by year
According to the data in the Hurun Wealth Report released by Hurun Research Institute in 2017, there were 4.6 million households with assets of 6 million yuan in Greater China in 2017, 80% of which came from Chinese Mainland. In 2017, the number of middle-class people in China reached 385 million.
Regarding this, Zhang Ronghui, General Manager of Zhejiang Gold Trust Wealth Management Headquarters, told the reporter of "Economy" that the sustained high-speed growth of the Chinese economy for decades has led to the expansion of the number of high net worth clients in China year by year, and will continue to maintain a high-speed growth trend in the future. It is expected that China will become the world's largest market for high net worth clients in 2020. In the past decade, the number of high net worth individuals in China has been on the rise year by year. In 2006, the number of high net worth households in China was only 180000, but in 2017 it had multiplied several times, which is closely related to China's economic development
According to a public report jointly released by consulting firms such as Boston Consulting Group and Bain&Company and Chinese wealth management institutions, the number of high net worth households in China (with investable financial assets of approximately 1 million US dollars equivalent to RMB) ranges from 1.6 million to 2.1 million. However, according to publicly available data from major commercial banks, private banks, and top ranked wealth management companies, the number of private banking clients they maintain is in the tens of thousands, and all institutions combined make up hundreds of thousands. "Ren Jie, Co President of Datang Wealth Management, told Economic reporters that the market space for various wealth management institutions is still large, and the wealth management market for individual high net worth clients belongs to the rapidly developing blue ocean market.
So, how should we define high net worth individuals?
Considering the inflation factor, it is generally believed that high net worth individuals have available financial assets above 10 million RMB. Due to the high stability and recognition of the US dollar globally, as well as its strong risk resistance in economic development, using the US dollar as the standard is becoming increasingly recognized. Therefore, the above standard for calculating exchange rates is equivalent to approximately 1.5 million US dollars? According to an analysis by a reporter from Economic Daily.
Regarding this, Ren Jie stated that generally speaking, clients with investable financial assets of over 1 million US dollars are referred to as individual high net worth clients. Customers with less than $1 million and more than $100000 are referred to as Volkswagen Wealth customers. And clients with a net worth of over 50 million US dollars are considered ultra-high net worth clients. After the opening of private banks in domestic commercial banks, the threshold also varies from 6 million to 10 million yuan, basically referring to the industry practice of overseas 1 million US dollars. In China's wealth management industry, the target customer group is generally based on the above standards, targeting customers with investable funds and financing assets of more than 1 million US dollars. However, in the actual business development of various institutions, they will comply with the recognition standards of qualified investors in the new asset management regulations
The specific number is actually not the key, "Hou Lin, General Manager of Yixin Wealth Management Products, said in an interview with" Economic "reporters. The concept of" high net worth clients "represents that when an individual or family's wealth reaches a certain level, their service needs will become significantly more complex: global asset allocation needs, non-financial service needs, such as family inheritance, tax law, enterprise transformation, life services, etc.