Wealth Management "Course Correction" in Low Interest Rate Environment as Nearly 2,000 Products Adjust Performance Benchmarks

Since 2026, many bank wealth management products have seen their performance benchmarks lowered, with some products decreasing by over 50%.

Recently, institutions such as Pudong Bank Wealth Management, Ping An Bank, and Bank of Shanghai Wealth Management have announced reductions in their product performance benchmarks. Some adjustments exceed 100 basis points, with interest rate floors generally below 2%. In the current environment of “low interest rates, narrow spreads, and high volatility,” the bank wealth management market, with a remaining scale of 33 trillion yuan, is also facing certain pressures.

Massive reductions in performance benchmarks

This year alone, 1,923 bank wealth management products have adjusted their performance benchmarks. On March 11 alone, 30 products issued related announcements.

Shenzhen Rural Commercial Bank announced on March 11 that it would adjust the performance benchmark of its Xin Tong Wealth Management - Zhen Yuan Jin Nian Nian Ying product 39. The bank stated that, based on current market interest rate changes and fund operation conditions, it plans to adjust the benchmark from March 27, 2026. The benchmark before adjustment was 2.30%-3.05%, and after adjustment, it will be 2.15%-3.00%, a change of 5 to 15 basis points.

Pudong Bank Wealth Management also announced on the same day that the annualized interest rate of its “Pudong Wealth Weekly Stable Fund (WeBank Exclusive)” Class A shares would be lowered from 1.4% to 1.3%. The adjustment will take effect on March 12, 2026.

Regarding the reasons for the adjustment, Pudong Bank Wealth Management explained that the performance benchmark is calculated by the product manager based on the product’s investment scope, strategy, asset allocation plan, and market environment. As a fixed-income product with a core bond asset allocation of at least 80%, the benchmark is based on current market interest rates, static yields of investable bonds, and after deducting fees, it reflects the product’s expected return.

Minsheng Wealth Management’s “Gui Zhu Fixed Income Enhanced Two-Year Open-Ended 2” product saw its benchmark sharply lowered from 4%-6% to 2.6%-3.1%, a reduction of nearly 50%.

From February 3, 2026, the performance benchmark of ABC Wealth Management’s “ABC Anxin Lingdong 7-Day RMB Wealth Management Product (Corporate Exclusive)” was adjusted from 2.20%-3.20% (annualized) to 1.70%-2.20%, with the upper limit decreasing by 100 basis points.

Additionally, ABC Wealth Management announced that starting from the closed period beginning March 11, 2026, the benchmark for its “ABC Progress • Two-Year Open” Value Selection Phase 1 RMB wealth management product would be adjusted from “3.40%—4.55% (annualized)” to “2.20%—3.00% (annualized).” The upper limit was lowered by 155 basis points, and the lower limit by 120 basis points.

On January 22, 2026, the benchmark for Hengfeng Wealth Management’s “Hengyou One and a Half Year Fixed Open 2021 Phase 1” product was adjusted to the one-year fixed deposit rate published by the People’s Bank of China plus 0.85%, i.e., 2.35%. Previously, the benchmark ranged from 4.25% to 4.75%, a significant decrease.

In addition to large reductions in benchmarks, many wealth management firms are also shifting some products to index-based or market rate-based benchmarks.

Xingyin Wealth Management announced that the benchmark for its “Wintain Daily Profit Increase No. 6 Fixed Income Product” would be adjusted from an annualized 2%-2.7% to the “People’s Bank of China 7-day notice deposit rate,” effective February 9.

Zhaoyin Wealth Management also announced that the benchmark for its “Zhaorui Daily Open 30-Day Rolling Hold No. 1” would be adjusted from 2%-3.7% to “30% × PBOC savings deposit rate + 70% × ChinaBond 0-3 Month Treasury Bond Total Return Index,” effective March 10.

Paimai.com Wealth Public Fund Operations Director Fang Fang believes that the recent benchmark adjustments fall into two categories: one involves significant reductions, mainly for long-term insurance products such as three- or five-year products, where previous high market interest rates have declined over recent years; the other is due to the general fall in yields of underlying assets like bonds and deposits, making it harder for wealth management products to achieve expected returns. Additionally, declining bond yields and stock market volatility increase the challenge of achieving absolute returns on the asset side.

Bank wealth management scale exceeds 33 trillion yuan

The China Banking Wealth Management Registration and Custody Center released the “China Banking Wealth Management Market Annual Report (2025)” (hereinafter referred to as the “Report”), which shows that by the end of 2025, the outstanding scale of the bank wealth management market was 33.29 trillion yuan, an 11.15% increase from the beginning of the year, reaching a new level.

In the current environment of “low interest rates, narrow spreads, and high volatility,” does the 33 trillion yuan market face certain pressures? Fang Fang believes that the downward adjustment of benchmarks in bank wealth management may cause some investors’ return expectations to decline in the short term. Coupled with net value fluctuations, this could lead to redemption pressures. However, the overall impact is more structural, and the total scale is unlikely to experience sustained outflows.

Guoxin Securities analyst Kong Xiang pointed out that the further development of bank wealth management faces structural obstacles. On one hand, low-volatility products and even deposit substitutes, while satisfying customer needs and stabilizing market size, also reinforce the low-risk nature of these products, leading to short-termism and reliance on fund pool-like models (such as trusts) and “mark-to-market” valuation methods to maintain stable net values. Regarding product structure, 95% are fixed-income products mainly composed of deposits and credit bonds, with limited active management space. For wealth management subsidiaries, there is a dilemma of “scaling up—shrinking income.”

Kong Xiang also stated that in the long term, differentiation in wealth management subsidiaries will come from product diversification, and the race for product reform and transformation will continue. The space for bank wealth management to use smoothing methods (including smoothing funds, closing price valuation, etc.) will gradually shrink, pushing subsidiaries to increase risk budgets in product design and to enhance yields through multi-asset and multi-strategy approaches.

Specifically for fixed-income assets, institutions will continue to allocate high-yield assets and employ bond trading strategies to boost returns. For multi-asset strategies, convertible bonds, gold, equities, commodities CTA, and other alternative assets beyond traditional bonds and deposits will be effective. To accommodate large-scale fund operations, wealth management subsidiaries will also accelerate platformization, industrialization, and integrated research and development models.

Following benchmark reductions, banks are also launching a wave of fee reductions to maintain customer relationships.

Recently, Schroder, Bank of Communications Wealth Management, Huaxia Wealth Management, and China Merchants Wealth Management announced fee discounts for multiple products.