Mainland Chinese investors not impressed with Wealth Management Connect expansion
Restrictive marketing rules and stringent eligibility requirements will continue to deter wealthy Chinese from the scheme, analysts say
The addition of 14 securities firms last week to the scheme that allows investors in Hong Kong and on the mainland to buy wealth-management products across borders did little to raise the programme’s total investments.
By Sunday’s end, only 6.28 per cent of the total 150 billion yuan (US$21 billion) quota in the southbound Wealth Management Connect scheme had been used, a negligible increase of 0.08 per cent compared with levels before the additional firms joined. The northbound usage was far lower.
Industry insiders point to a range of issues, from restrictive marketing approaches to stringent investor eligibility requirements, that they say will continue to deter wealthy Chinese from the scheme – even as they rush to open bank accounts in Hong Kong to explore diverse investment options such as insurance and time deposits.
“It doesn’t matter that they added more brokers,” said Eugenie Shen, head of the asset management group at the Asia Securities Industry and Financial Markets Association (ASIFMA).
