21st Century Business Herald reporter Tang Yadi and Xue Ruyun

21st Century Business Herald reporters have learned from multiple independent sources that a financial management subsidiary in the Yangtze River Delta region has received a separate notification letter from regulators due to its rapid growth in scale this year.

Several financial experts told reporters that regulators have been keeping an eye on wealth management companies with rapid growth rates, and this is not the first time they have issued a warning. Previously, multiple wealth management companies have been reminded through various methods such as window guidance and naming in meetings.

The main focus of regulation is on growth rate, and we hope to see everyone develop steadily. Abnormal growth in scale is easy to be noticed and alerted, "said a wealth management specialist from a city commercial bank.

Another financial management insider added to the reporter that the previously focused cases were more due to irregularities in the company's business operations, rather than just rapid growth in scale. This time, the company only received a reminder letter without any substantive disposal measures attached, which also indicates that regulation is still mainly focused on warning risks

The overall scale of the wealth management company mentioned in this letter is not high, but its growth rate has been prominent recently, especially in the short-term product scale. According to the reporter's understanding, its overall growth rate in the first half of the year was about 16%, while other wealth management companies in the industry had a growth rate of around 10%.

Regarding this, a wealth management specialist from a joint-stock bank explained to reporters that regulators should pay attention to institutions with rapid growth in short-term products, and liquidity risk is one of the important considerations. Debt end customers can redeem at any time, while the liquidity of credit bonds and other assets allocated on the asset end is relatively limited, making it difficult to quickly realize them during market fluctuations.

He further pointed out that after the launch of the distribution channels, the end of season fund return rhythm of each distribution bank varies, and the demand for wealth management redemption overlaps with each other, further exacerbating the complexity of cross channel liquidity management.

The high growth of individual cases contrasts with the overall pressure on the industry. In the first half of 2026, the scale of bank wealth management will maintain rapid growth. According to data from the Banking Wealth Management Registration and Custody Center, as of the end of the first quarter, the size of the bank wealth management market was 31.91 trillion yuan, a year-on-year increase of 9.51%, but a decrease of 1.38 trillion yuan from the end of 2025.

After entering the second quarter, the wealth management market rebounded slightly. According to a research report by the fixed income team of Huayuan Securities, as of the end of May, the total market wealth management scale reached a historical high of 35.1 trillion yuan. However, due to factors such as mid year assessments by banks and seasonal capital inflows on the balance sheet, the scale temporarily fell back to 33.86 trillion yuan at the end of June, with a net increase of only about 600 billion yuan in the first half of the year.

Against the backdrop of overall growth pressure, wealth management subsidiaries are undergoing a significant supply structure adjustment. In 2025, the self operated wealth management of small and medium-sized banks will continue to decline under regulatory requirements. According to data from China Wealth Management Network, as of the end of 2025, the number of banking institutions issuing wealth management products has decreased by 59 compared to the end of the previous year, and the scale of existing wealth management by banking institutions has decreased by 29.12% year-on-year.

The gradual withdrawal of self operated wealth management by small and medium-sized banks objectively promotes the expansion of the scale of wealth management subsidiaries in 2025. In 2025, the growth rate of the wealth management subsidiaries of city commercial banks will be particularly prominent, with many exceeding 20%.

Among them, Ningyin Wealth Management led the way with a growth rate of 47.04%, while Hangyin Wealth Management and Suyin Wealth Management increased by 38.53% and 30.48% respectively. Even the relatively moderate growth rates of Shangyin Wealth Management and Huiyin Wealth Management achieved growth of 18.05% and 19.57% respectively. According to industry statistics, the average growth rate of the wealth management scale of six urban commercial banks' wealth management subsidiaries, namely Ningyin, Hangyin, Suyin, Nanyin, Shangyin, and Huiyin, will exceed 30% by 2025.

Between a decrease and an increase, the industry landscape is rapidly reshaping - funds and customers from small and medium-sized banks' self operated exits are heavily shifting towards similar products from their wealth management subsidiaries. The industry believes that this structural change has not only brought about an increase in scale for wealth management subsidiaries, but also laid the groundwork for growth differentiation in 2026.

Industry analysts have pointed out that in the initial stage, various wealth management subsidiaries compete for the inflow of funds after the clearance of small and medium-sized banks. However, as the distribution channels become saturated, the stability of product returns, the ability to acquire low wave assets, and the supply of customized products will become the key to customer stickiness. Institutions with weak investment research and risk control capabilities, even if their short-term scale surges, will face subsequent redemption pressure and rate compression.

On March 16, 2026, the State Administration for Financial Regulation officially released the "Interim Measures for Regulatory Rating of Wealth Management Companies". Among the six major rating dimensions, the combined weight of asset management capability and risk management reaches 50%, and the scale indicator is explicitly excluded from the rating elements.

Zeng Gang, Chief Expert and Director of Shanghai Finance and Development Laboratory, pointed out that the "Measures" list asset management capability as the primary weight of 25%, cutting off the path of "large scale high rating" from the institutional perspective. If institutions want to maintain or improve their ratings, they must make substantial investments in investment research capabilities, risk systems, and product diversification. The space for relying on scale to support their facade will be greatly compressed.

In the past, under the old logic of scale driven, problems such as product homogenization and a focus on channels over investment research have long existed in the wealth management industry. 'Ranking' is one of the typical performances.

The so-called "earnings ranking" refers to some wealth management companies artificially adjusting their earnings through "shell products". The specific approach is to choose newly launched and extremely small-scale products as carriers, and use methods such as revenue manipulation and valuation modification to periodically increase short-term returns, making them rank high on the revenue ranking list and attracting capital inflows; After the scale expands, the yield immediately falls back to normal.

In January 2026, regulatory authorities imposed administrative penalties on two wealth management subsidiaries, citing the operation of "profit ranking". According to public reports, both of the punished companies are wealth management companies under the joint-stock bank. The punishment measure is to suspend the issuance authority of newly added related products for 3 months. The relevant notice pointed out that the displayed returns of some products are seriously inconsistent with the actual returns received by investors, misleading them. This punishment is also seen by the industry as a deepening implementation of the previous valuation rectification. (For more details, please refer to the regulatory requirement to rectify the frequent occurrence of "high-yield" bank wealth management "listing" at the beginning of the year.)

Although the policy direction has clearly shifted towards prioritizing quality, the "scale mentality" of some wealth management companies is still difficult to dissipate in the short term. According to China Securities Journal, some wealth management companies still consider scale growth as their core performance indicator. Since the beginning of this year, some city commercial banks have significantly increased their protection of their wealth management companies, including displaying only their wealth management company products on the first few pages of bank app product pages, and tightening the admission conditions for other wealth management company products.

A wealth management expert from a major bank also expressed similar observations to reporters. She bluntly stated that the current scale growth is still the core performance indicator of her company. The income of wealth management companies is highly dependent on management fees, and in the context of continuous pressure on fee rates, only by "supplementing prices with quantity" can revenue be stabilized.

In her opinion, although the new regulations do not directly assess scale, capabilities such as investment research and risk control require scale to support them. Without scale, we can't afford a team, nor can we talk about system building

Senior financial regulatory policy expert Zhou Yiqin told reporters that the notification letter sent to individual wealth managers regarding the scale of attention in this regulation has a clear signal significance. Against the backdrop of the recent implementation of the Interim Measures for the Supervision and Rating of Wealth Management Companies, maintaining attention to institutions with rapid growth in scale is a concrete manifestation of the shift from "scale oriented" to "quality oriented" regulation.

(Our reporter Tang Yaohua also made contributions)

(Author 21st Century Business Herald)