Bank Wealth Management "Return Ranking"? Regulatory Action: Two Joint-Stock Bank Wealth Management Companies Penalized

The highly discussed phenomenon of “performance ranking” in bank wealth management has indeed attracted regulatory intervention, contrary to some media reports and research forecasts suggesting otherwise.

A reporter from Securities China learned from multiple industry insiders that before the Spring Festival, two joint-stock commercial banks’ wealth management subsidiaries were under regulatory scrutiny and received penalties due to “performance ranking.” These two wealth management firms were fined and suspended from issuing new products related to the ranking series for three months.

How does wealth management “performance ranking” work?

The previous name for the bank wealth management “performance ranking” phenomenon was “wealth management assassin,” and it has now drawn regulatory attention. “Performance ranking” means that wealth management companies shift returns from a few newly issued, smaller-scale products to make their yields appear outstanding on an annualized basis, quickly attracting investor subscriptions. As these products expand in scale, their yields rapidly decline, and the actual returns are diluted, negatively impacting investors’ holding experience.

According to long-term tracking by Securities China, the main methods of “performance ranking” can be summarized as follows: first, using technical means to adjust returns, including but not limited to smoothing trust products, closing price valuation, and self-built valuation models, aiming to flatten peaks and troughs and stabilize true net value fluctuations; then, through outsourcing channels (such as trust channels), to shift returns for new or small products. Of course, regulators have previously paid close attention to valuation magic and required relevant wealth management companies to complete rectification by the end of 2025.

The existence of “performance ranking” more or less contributes to the phenomenon where many high-yield products (mainly those with the shortest holding periods) are displayed in bank channels. However, once investors buy in, they often find that the actual holdings cannot support the optimistic expectations set by the displayed yields.

The Southern Finance Wealth Management platform previously analyzed data in detail and reported that, for example, a 14-day fixed income product issued by a certain East China city commercial bank, established on July 2, 2025, had an annualized yield of over 14% in September last year, but plummeted to 1.54% in the fourth quarter;

Another product, a 7-day fixed income product issued by a Beijing-based joint-stock bank wealth management company, established in September last year, had an annualized yield of nearly 24% after just one month, but its yields quickly fell to 1.04% and 1.62% in November and December;

A daily open fixed income product from a large and medium-sized joint-stock bank, with an annualized yield of 19.72% in September last year, saw its yields plunge to 1.36%, 0.63%, and 1.28% in October, November, and December. According to periodic reports, this product had a scale of only about 1.35 million yuan at the end of June last year, but by the end of September, it had grown to 872 million yuan.

The performance of these products aligns with industry judgments on “performance ranking”: their underlying assets’ operational trends diverge from market performance. What does this mean? These are “fixed income plus” products primarily invested in fixed income assets, with equities as a “plus” component, usually comprising only 5%–10% of the portfolio. Moreover, these equity assets typically do not directly invest in stocks or stock funds but mainly through penetration investments in preferred shares and perpetual bonds (the term “penetration investment” refers to investments via asset management plans and trusts into equities). If, despite a generally poor bond market, these products can achieve relatively high returns and smooth upward yield curves, it is highly suspected that they are engaging in “performance ranking.”

Advocating for genuine price discovery

“This is definitely not genuine price discovery. Our company does not engage in this (adjusting returns). We also hope that regulators will standardize and align their attitudes and standards to eliminate this phenomenon and promote fair competition,” said an insider from a Shanghai-based wealth management firm, speaking from a fairness perspective.

Huabao Securities also analyzed “performance ranking” in a research report, noting that some institutions tend to adopt a development path of “ranking—attracting traffic—scaling up,” which can trigger passive follow-on by other institutions. Fully compliant firms face short-term competitive disadvantages, including client loss and scale contraction, ultimately leading to increased industry homogenization.

Ultimately, the “performance ranking” phenomenon is a result of the bank wealth management industry’s preference for “high yield, low volatility” liabilities, reinforced by the scale assessment of wealth management companies.

Now, regulatory authorities have taken action to correct this. According to a credible source from Securities China, last month, regulators penalized a Beijing-based joint-stock bank’s wealth management subsidiary and a South China-based but mainly Shanghai-focused joint-stock bank’s wealth management subsidiary for engaging in “performance ranking” in some products. Both companies were fined and suspended from issuing new products related to the ranking series for three months.

It is worth noting that the regulatory penalties include but are not limited to these two firms, though the reporter has only confirmed these cases within the limited timeframe.

On December 22, 2025, the State Administration of Financial Supervision and Administration issued the “Measures for the Disclosure of Asset Management Product Information of Banking and Insurance Institutions,” which emphasizes standardizing asset management product disclosures and explicitly prohibits selective disclosure of performance over certain periods and inconsistent performance presentation standards across products to mislead investors. Undoubtedly, the implementation of these new disclosure regulations will effectively curb misleading marketing practices, including “performance ranking.”