In recent years, international financial institutions have been struggling to develop the emerging wealth management business that will be a major pillar for the profit of financial institutions in the future. Wealth management originated in Europe and grew in the United States. For financial institutions, wealth management is a new type of business operation model. For clients, wealth management is a type of integrated financial service. Wealth management has become an emerging financial field perpetuated by securities companies, commercial banks, and insurance companies. A large number of commercial banks have started transitioning from capital providers to national wealth managers. Many securities traders have also jumped on the wealth management bandwagon.

Wealth management covers such aspects as investment counseling, lifelong wealth management planning, and capital value retention and increase. It has become one of the three major business sectors of the global financial industry, alongside credit/lending and investment banking. It is likely to become the most important growth area. Sizable middle and wealthy classes have emerged in China. Wealth management will therefore become a major contender among domestic financial institutions. Specifically, wealth management involves providing clients with pragmatic plans, suggestions concerning relevant tactics, and action plans to help clients meet their wealth management goals in a comprehensive way.

In the field of wealth management, securities traders have to face competition from banks and third-party wealth management providers, as well as other enterprises. At the core of the competition not only is there expertise, products, and brands, but also a profitability model, which is even more important. Banks have obvious conduit and customer base advantages, but fall short in terms of the ability to provide professional services. Third-party wealth management provides opportunities for matchmaking between upstream and downstream clients. Their core competitive strength lies in product development participation and selection. Securities traders do not compare favorably with banks in terms of conduit networks, but they have an edge in their ability to provide professional services. In comparison with banks and mature third-party wealth management, securities traders have another weakness in the wealth management competition—a limited selection of products to offer.

As far as professional service goes, securities traders can provide integrated financing and investment business services. However, in their wealth management practice, most Chinese securities traders are still unable to effectively integrate internal resources in a way that enables them to provide their own characteristic, client-centric, integrated institutional/retail/investment and financing services. Often they simply confront banks and third-party wealth management organizations on the product battleground. This is equivalent to fighting with a handicap, and the result is obvious. Accordingly, due to a lack of clearly defined wealth management profitability models, the team-building effort for wealth management is a bit muddled. In investment counseling, oriented team building is hugely favored by securities traders. In operation practice, however, securities traders still count on a team development model with marketing at the core. The dream of creating value through investment counseling services in reality suffers from a lack of profitability model guidance, product support, and the ability to provide high quality professional investment counseling services. Most securities traders are still taking baby steps on the path of wealth management transitioning and teambuilding, experimenting their way forward. Based on previous discussions about the core competitive strength of securities traders and key talents, in order to develop wealth management, securities traders need to address the three core issues discussed next.

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