Status Quo And Counter Measures Of Personal Wealth Management Services In Commercial Banks Of China

In recent years, China’s economy has been on the fast track. The economy development and the change of international and domestic situation raise new challenges to China’s commercial banks. In other words, personal financing management service needs to achieve a new leap. Firstly, the quality of people’s life has improved a lot and people has accumulated more weath. Therefore, original services can no longer meet the current needs.On the other hand, after we entering WTO, the opening degree of domestic market is deepening. More and more foreign banks have entered Chinese market which is undoubtedly a new challenge on the domestic commercial banks. Therefore, in order to meet people’s new demands on personal finance products and win more market share in competition with foreign banks China’s commercial banks have to strive for new development of personal wealth management service to consolidate their own position.Personal wealth management service refers to financial analysis, financial planning, investment proposal, asset management and other professional services provided by commercial banks to individual customers. China’s commercial banks start late in personal wealth management services. Nowadays, most commercial banks have already owned personal wealth management products and have special staffs in responsible for the services. However, due to late beginning in the sector and other constraints, personal wealth management services of commercial banks are still in the exploration phase. There are a number of problems in their services.First of all, our economic,political and cultural background are not very conducive to the development of personal wealth management services. At present, Chinese financial sector is still in the stage of separate operation. The three-important-mainstay of Financial Industry-Bank, Security and Insurance are still and going to be separated in the far future, which makes the funds of our clients can only be circulated in the independent system. Our commercial banks can not use the advantages and functions of the other two markets to achieve added values of RMB personal wealth management products. Income and risks are both limited to the bank syetem. The monotonous assets portfolio can not meet the needs of clients with abundent funds. The personal weath management services of commercial banks struggled in the adverse background. In addition, due to the influence of our culture, Chinese people, especially those low-end customers are quite conservative. Though there are varified wealth management products, they only favor savings and are unwilling to accept other products. On the other hands, commercial banks generally do not pay enough attention to attract low-end customers. They did little in market cultivation and guidance to low-end customers. Therefore, low-end customers know little about personal wealth management services which attributes to the reluctance to buy varified personal wealth management products.Under such environment, there is not enough market for personal wealth management business of commercial banks. Market methods can not function well accordingly.Second, commercial bank’s internal factors are also a major constraint to the development of personal wealth management business. On the one hand, the overall quality of commercial banks employees is relatively low. Due to separate operation of financial sector, financial practitioners is far from the requirement of specialty and normalization. It is quite common that many staffs are temporarily transferred to take part-time jobs. However, what commercial banks really need are those compounded talents who know bank market, insurance market, insurance market and even laws, taxes very well. There are already professional financial planners in foreigh commercial banks while there is a big talents gap in our commercial banks. Few staffs have acquired professional international certification. The lack of professionals makes personal wealth management stay in the level of simple assets management and can not go further to deeper level.On the other hand, China’s commercial banks have poor marketing ability, and what is worse, they hold very old marketing concept and do not attach great importance to marketing. They only value important clients and ingore middle-and-low customers. They just like waiting for clients, not try to attract and find them.And they do not pay enough attention to the needs of clients and take time and efforts to study the needs which frequently lead to inappropriate products and customer dissatisfaction. So commercial banks can not effectively maintain existing customers. In fact, customer demand is the basis of banking services. Only when you perfectly satisfied customer demand, can the commercial banks operate well.Third, poor hardware facilities also limit the development of personal wealth management services. The hardware facilities of commercial banks are relatively backward and quite a lot of operation has no access to web-based operating system. Therefore, many financial products are more of a simple copy and lack originality. Financial derivatives can not be integrated together and the homogeneous degree of products is really high. In addition, poor hardware facilities lead to monotonous means of marketing. Our commercial banks can not provide appropriate and timely information for their clients, not to mention tailored wealth management scheme. If the inherent practices can not be changed, commercial banks will still be deficient in innovation.This paper presents some suggestions to solve the prolems in the process of personal wealth management development faced by our commercial banks.Firstly, our commercial banks should gradually try to change their strategy in order to cater for the policies of government. Under the background of financial separate operation,commercial banks should integrate and ajust their business and try to make strategic and deep coopreration with insurance and securities institutions. What the most important is to find proper partners, promoting personal wealth management services in a broader level. By doing this, commercial banks can really make comprehensive utilization of funds and create more value for their clients. Besides, the insurance and securities institutions can also benefit from the cooperation. Clients, commercial banks and other institutions can achieve a win-win situationSecond, commercial banks can adopt a system of professional skills certification to enhance the overall quality of their employees. Specifically, commercial banks should demand their related staff require certificate of Personal Financial Planner (PFP). Certified appraisal system suites to China’s national conditions, though it is not perfect. In other words, it is undoubtedly the best way to standardize the requirements of personal financial planner. Besides, commercial banks should strengthen the training of their staffs and strive to cultivate more and more compounded financial talents. Thirdly, commercial banks should make efforts to enhance their marketing capabilities. Specifically, they must abandon the old concept of marketing and make new innovative marketing strategy. They should take the initiative to guide and cultivate customers and establish a stable and independent relationship with them, not just wait for them. For all customers, especially low-end customers, commercial banks should pass the correct method and concept of financial planning, help ordinary investors to set a good investment habits, help potential customers be familiar with basic knowledge and accept their products. For VIP customers, one-to-one service should be provided.Finally, China’s commercial banks should increase capital and technical investment to improve hardware facilities and inner network. Only by doing so, the operation and regulation can be more fluent and convenient and the linkage between banks can be strengthened. In addition, commercial banks should improve their database in order to better satisfy the needs of customers. Second, for products homogenization problems, commercial banks should accelerate the pace of innovation. And personal wealth management products should be built on the basis of full understanding of customers’needs. Product innovation should cater for the needs of both VIP customers and low-end clients.In short, there is a big gap between personal wealth management services of in China’s commercial banks and those of foreign banks. Therefore, commercial banks need to continue to study, to explore, to innovate and try to design better personal financial products which can embodied their own characteristics and cater for our policies. As long as our commercial banks make continuous effort, the services of personal wealth management will have a bright future and a vast increase space.