The Research About Risk Management And Supervision Of The Securities Companies’ Wealth Management Business

The recent development of the China’s wealth management marketbenefits from the continuous and rapid development of the economy. Withthe increasing demand, wealth management has become one of thefastest-growing sectors in China’s financial industry where many financialinstitutions including commercial banks, insurance companies, trustcompanies, and investment banks have invested a lot. The investment banksin China presently have just started the wealth management business which,however, is continuously developed with the sufficient capital and customers,strong research abilities and the favorable policies of the investment banks.Meanwhile, risk management will become another big problem.This essay aims to analyze the risk (including risk profile, the riskcontrol methods, and the current situation of monitoring) related to the wealthmanagement sector, and hence provides the related suggestions from the viewof investment bank with the experiences of risk management and monitoringin the international wealth management market, especially those after the bigevents.This paper includes five sections as listed below: The first section shows the importance and pressing need for research onrisk management and regulatory countermeasures of wealth management, bydescribing recent development of wealth management market as well as thestatus quo and prospects for securities companies in wealth managementindustry with survey data.The second section contains summaries and literature review of researchfindings on WMB, provides theoretical support for the development of WMBand points out how WMB’s risk management and regulatory can beimproved.The third section generalizes experience from developed markets, with aspecial focus on changes on regulatory after subprime crisis.The fourth section describes the status quo for risk management andregulatory of WMB of securities companies in China, finds out problems anddifferent categories of risk exposures, then sorts out the existing risk controlmeasures and regulatory countermeasures.The fifth section provides constructive advices with internationalexperiences on risk management and regulatory hierarchy of WMB ofChina’s securities companies in order to solve existing problems.