Performance Benchmarks Down Nearly 50%! Is Wealth Management Performance Hard to Anchor? How Can Investors See Through Returns?

“Why does the performance of the financial products I bought look good on paper, but the actual returns are much lower?” This has become a common concern among many bank financial investors recently. Since the implementation of the new asset management regulations, the performance benchmark has replaced the former “expected return rate” and has become an important reference for investors when choosing financial products. However, this “benchmark” seems unreliable. According to Wind data, by 2025, only an average of 65.54% of maturing closed-end products from 32 bank wealth management subsidiaries will meet the lower limit of their performance benchmarks (annualized yield; non-numeric benchmarks are not included).

At the same time, if investors are not paying attention, the “anchor” of their held financial products’ performance may have already shifted. Since 2026, according to company announcements, more than 10 wealth management firms including China Merchants Bank Wealth Management, Ping An Wealth Management, Xingye Wealth Management, Agricultural Bank Wealth Management, and Bank of Communications Wealth Management have announced reductions in the performance benchmarks of multiple products, with some even seeing the upper limit of the benchmark cut in half. What does this intensive change of “anchors” in financial products mean? Investors need to learn how to interpret these changes and bring their investment decisions back to rationality.

Financial products “change anchors” with nearly 50% cuts to performance benchmark upper limits

Since 2026, wealth management companies have been intensively lowering and changing the performance benchmarks of their products. According to company announcements, over 10 firms including China Merchants Bank Wealth Management, Ping An Wealth Management, Xingye Wealth Management, Agricultural Bank Wealth Management, Bank of Communications Wealth Management, and China Post Wealth Management have announced reductions in the benchmarks of some products, with some benchmarks experiencing “plummeting” adjustments.

For example, Minsheng Wealth Management’s “Gui Zhu Fixed Income Enhancement Two-Year Open Product 2” saw its benchmark drop sharply from 4%-6% to 2.6%-3.1%, nearly halving the upper limit. Some products’ benchmarks have been lowered so that the lower bound approaches 1%, such as Ping An Wealth Management’s “Qiyuan Stable Profit Daily Open 25” fixed income product, whose benchmark was reduced from 1.50%-2.10% to 1.10%-1.70%. This product is rated R2 (medium-low risk).

Wang Pengbo, Chief Analyst at Broadcom Consulting in the financial industry, told reporters that from an industry perspective, the widespread lowering of benchmarks mainly responds to the objective environment of declining market interest rates and falling yields on underlying assets, as well as regulatory requirements for the authenticity and comparability of benchmarks.

The China Post Wealth Management also explained in its announcement that “bond and deposit yields have continued to decline, with the 30-year government bond yield at only 2.3%. The equity market volatility has increased, greatly reducing the probability of absolute gains. After previous market rebounds and valuation repairs, the process is basically complete, and future movements are likely to be volatile.”

In addition to lowering the numerical values, many wealth management firms are also adjusting the benchmark formats. Some products have replaced the original interval-based benchmarks with index-linked benchmarks. For example, “Xingye Stable Add Profit Daily Increment 100” changed its benchmark from an annualized 1.60%-2.50% to the “People’s Bank of China’s 7-day notice deposit rate,” effective March 10. Others have been replaced with index combinations such as “ChinaBond - Comprehensive Wealth (1-3 years) Index 95% + CSI 300 Index 5%.”

Wang Pengbo believes that from a product operation perspective, adjusting benchmarks to link to relevant indices is to reduce subjective bias and better reflect the investment strategy. Such adjustments will directly lower investors’ return expectations and promote more standardized and net-value-based operation of wealth management products.

Why is it hard to anchor returns? Why do investors see high yields but get less than expected?

“Why do bank wealth management products show high yields but the actual returns are less than expected?” Some investors have raised this question on social media, sparking lively discussions in the comments. Our investigation found that, when purchasing wealth management products, besides looking at past yields, the performance benchmark has become the most important “anchor,” and it is also the most commonly used performance indicator in public promotional materials.

According to data from Tonghuashun iFinD, among over 40,000 existing wealth management products, more than 90% use numeric benchmarks (e.g., 2.3%-3.2%), with interval-based benchmarks being mainstream, some using absolute values (e.g., 2.8%), and only a few employing non-numeric benchmarks such as those linked to deposit rates or index combinations.

Regulatory requirements currently mandate that all performance benchmarks must clearly state: “The performance benchmark is not an expected return rate, does not represent the future performance or actual returns of the product, and does not constitute a promise of returns.”

Dong Ximiao, Deputy Director of the Shanghai Financial and Development Laboratory and Chief Economist at China Merchants Bank, pointed out that performance benchmarks do not guarantee returns. However, if benchmarks are not fully and accurately disclosed, investors may develop a “fantasy of guaranteed returns,” which can also implicitly suggest rigid payoff expectations.

This has led some investors to mistakenly believe that the benchmark is a guaranteed minimum return. When actual returns fall short, they feel disappointed. According to Wind data, in 2025, only an average of 65.54% of maturing closed-end products from 32 bank wealth management subsidiaries paid out returns meeting the lower limit of their benchmarks, meaning nearly 35% of products failed to meet the benchmark’s lower threshold.

How can investors better understand wealth management returns and improve their “sense of gain”?

It is worth noting that the regulatory issues surrounding the performance benchmarks of wealth management products have already attracted the attention of regulators. In December 2025, the China Banking and Insurance Regulatory Commission issued the “Measures for the Disclosure of Information on Asset Management Products of Banking and Insurance Institutions,” which took effect on September 1, 2026. The new rules explicitly require that product managers generally cannot adjust benchmarks. If adjustments are necessary due to significant changes in investment strategy or scope, they must follow strict internal approval procedures and disclose all benchmark adjustments in periodic reports and product prospectuses.

With the implementation of the new regulations, modifying benchmarks will become more difficult. As market volatility increases, if benchmarks are not set comprehensively and accurately, the actual returns investors receive may deviate more from the benchmarks. From product announcements, to comply with the “no arbitrary adjustment” rule, more products are shifting from numeric benchmarks to those linked to deposit rates or index baskets.

On the other hand, some investors argue that linking benchmarks to indices increases calculation and comparison difficulty. Wang Pengbo responded that, considering market conditions, shifting to index-based benchmarks may indeed make understanding and comparison more challenging for ordinary investors. However, the core purpose is to make performance references more aligned with actual product operation. Investors should rationally recognize that benchmarks are only reference indicators, not guarantees of returns.

Wang Pengbo recommends that when choosing products, investors should focus on risk levels, asset allocation, liquidity, and management capabilities, and make decisions based on their own risk tolerance and investment horizon.