Bank wealth management products frequently face issuance failures; fixed-income closed-end products are the "hardest hit" area.

Reporter Chen Zhi

Li Yue didn’t expect that she would “win.”

So-called “winning” refers to a bank wealth-management product she had subscribed to not long ago. It was nevertheless announced to fail to be issued because the fund-raising amount did not meet the minimum fund-raising requirement of RMB 50 million. With five years of experience in wealth management, this was “the first time she had encountered an issuance failure for a wealth-management product.”

Li Yue, who is also a wealth-management manager at a branch of a city commercial bank in the Shanghai area, has found that recently some bank wealth-management products have been broadly “neglected” by investors.

Li Yue and Xie Ming found that what is difficult to sell at banks is the newly issued fixed-income category, closed-end wealth-management products.

Based on incomplete statistics from Wind data, the reporter found that, since this year began, the number of cases of failed issuance of bank wealth-management products has clearly increased. From 2026 to the end of March, more than 42 fixed-income wealth-management products have already been announced as failed issuance because they did not reach the minimum fund-raising scale. This is a marked increase compared with the same period in 2025 (3), the same period in 2024 (7), and the same period in 2023 (9). Among them, more than 60% of the products are fixed-income closed-end wealth-management products.

Among these, Huaxia Wealth Management has cumulatively released 15 announcements that newly issued wealth-management products would not be established. Of these, 9 are fixed-income closed-end wealth-management products; another one is a pure-debt wealth-management product with a shortest holding period of 90 days.

In addition, bank wealth-management subsidiaries such as CMB Wealth Management, Xinhua Xinrong, Everbright Wealth Management, Guangfa Wealth Management, and Bohai Bank Wealth Management have also released announcements that their wealth-management products would not be established.

Against the backdrop of a trend in which deposits continue to move into wealth management, why have fixed-income closed-end wealth-management products—long popular with investors—suddenly become “unappealing”?

Investors’ “taste” has changed

In Xie Ming’s impression, fixed-income closed-end wealth-management products, with higher expected returns, have long been a best-selling type.

Data released by Puyi Standards show: in February this year, among newly issued wealth-management products across the whole market, 397 were open-ended products, with an average performance comparison benchmark of 1.85%; 1,621 were closed-end products, with an average performance comparison benchmark of 2.35%.

The reason is that fixed-income closed-end wealth-management products have longer locked-in periods, allowing the product investment team to buy mid-to-long-term fixed-income investment instruments with higher yields, thereby lifting the overall product returns. As a result, investors once flocked to this kind of product.

However, since February this year, when Xie Ming recommended to investors fixed-income closed-end wealth-management products with risk ratings of R1–R2 and a closed period of more than 3 months, the responses he received were mostly: “Are there any fixed-income + wealth-management products that are open-ended and allow for quick redemption of funds to choose from?”

At first, he thought it was because the yields of fixed-income closed-end wealth-management products had declined, reducing their attractiveness.

Puyi Standards’ data shows that, as of the end of February, the average annualized yield over the past month for fixed-income closed-end wealth-management products outstanding across the whole market was 3.03%, down 0.29 percentage points month-on-month; the average annualized yield over the past three months was 2.74%, down 0.07 percentage points month-on-month.

Xie Ming soon found that even if some fixed-income closed-end wealth-management products had performance comparison benchmarks of only 1.9%, they were still more than 60 basis points higher than the one-year deposit interest rate. Based on his past work experience, he felt that deposit funds would still flow into these products.

Li Yue also subscribed because the performance comparison benchmark of the product she bought was about 65 basis points higher than the one-year deposit interest rate, and she believed that a successful issuance of the product “was not an issue.” But reality was “a slap in the face.”

Through communications with multiple investors, Xie Ming found that a factor long ignored was rapidly influencing investors’ wealth-management decisions. Amid the ongoing escalation of the conflict between the U.S. and Iran, the global economic development casting a shadow over the outlook, and increased volatility across various financial-market assets, more and more investors no longer want to lock their funds in wealth-management products for 3–6 months with continuously declining wealth-management yields.

Multiple investors told Xie Ming that, in order to manage their funds flexibly, they preferred to subscribe to open-ended wealth-management products: if international geopolitical risk cools and China’s stock market rebounds, they can quickly redeem the products and invest the funds in the stock market. Even for newly issued fixed-income closed-end wealth-management products with a performance comparison benchmark higher than 2.2%, the shortest holding period they can accept would not exceed 30 to 45 days.

This made Xie Ming realize that, as the number of failed issuances of fixed-income closed-end wealth-management products increases, behind it is a structural change in how wealth-management funds flow—investors are beginning to balance wealth-management returns with fund liquidity.

Zhou Yiqin, founder of Coron Consulting, said that when fixed-income closed-end wealth-management products fail in their product design to match market needs and residents’ latest wealth-management preferences, the result is a decline in market recognition and an inability to reach the fund-raising targets.

The reporter learned from multiple parties that the sharp increase in failed issuance cases is also closely related to the market-oriented transition of the wealth-management product distribution ecosystem.

In the past, bank wealth-management subsidiaries could issue new products smoothly, mainly relying on strong support from their parent banks, which ensured a relatively guaranteed product fund-raising success rate. As product distribution channels continue to expand, business performance assessments for bank distribution channels have become increasingly market-oriented. Whether it is the parent bank of a wealth-management subsidiary or other bank distribution channels, today they are willing to tilt more sales resources toward wealth-management products with strong historical performance and high alignment with residents’ investment preferences. By comparison, newly issued wealth-management products whose performance comparison benchmarks are continuously lowered and whose fund-locking periods are relatively long are more likely to be “left out in the cold,” increasing the probability of failed issuance.

Zhou Yiqin said directly that, given that bank wealth-management products require banks to invest in areas such as investment research, operations, and risk control, if the actual fund-raising amount of a newly issued wealth-management product is far lower than the scale required to maintain product operations, it cannot be ruled out that wealth-management subsidiaries may proactively announce that the product is not established to avoid business losses.

The “aftereffects” of a return ranking drive

For the dense pattern of failed issuance of fixed-income closed-end wealth-management products, Lü Feng has another insight.

As a business主管 (head) of the product department at a joint-stock wealth-management subsidiary, he has long been responsible for the creation and issuance of closed-end wealth-management products. “In fact, closed-end wealth-management product issuance has always had unknown know-how.” He told the reporter that the so-called know-how is that, at the initial stage of wealth-management product issuance, the wealth-management subsidiary or distribution channel will look for major customers (high-net-worth individuals, enterprises, or investment institutions) to subscribe for a relatively high proportion of the fund-raising amount, ensuring that such products are issued successfully.

As a “return,” during the locked-in operation period of the wealth-management product, the wealth-management subsidiary injects high-yield assets, significantly increasing the overall return of the product and placing it among the top positions of wealth-management products’ earnings rankings—what the industry colloquially calls “wealth-management products return ranking.”

Once the closed period ends, these major customers withdraw at opportune times to capture higher returns. Such products can also attract large numbers of investors to compete for subscription by leveraging the “return ranking” effect, enabling the product’s funds under management to continue expanding. “In the past, this kind of operation worked every time.” Lü Feng revealed. But since this year, as regulators have strengthened oversight of return-ranking behavior for newly issued wealth-management products, this gray operation has become increasingly difficult.

Since February, he helped three fixed-income closed-end wealth-management products (all with a closed period of 6 months) issue successfully. He scoured for major-customer funds everywhere, but all of them met with “a closed door.” These major customers generally believe that, after strict regulation of return-ranking behavior for newly issued wealth-management products, they can hardly obtain the previously over-8% annualized returns during the product’s closed operation period, so they are unwilling to participate.

So Lü Feng sought help from the bank’s corporate business department to find large enterprises with cash-management needs to “invest” in these products. But he found that large enterprises require fixed-income closed-end wealth-management products to have actual annualized yields above 2.6%. However, the performance comparison benchmarks of these three newly issued products are only between 2.2% and 2.4%. To bridge the yield gap of 20–40 basis points, the product investment team would need to readjust the fund-allocation strategy—such as increasing the investment weight of alternative assets like REITs (real estate investment trusts) by an additional 10 percentage points—meaning the product investment terms would need to be re-adjusted for disclosure. “Currently, these three products are still at the fund-raising stage. Two of them have not yet found major-customer funds to subscribe, and thus face high risks of failed issuance,” Lü Feng admitted.

Xie Ming found that falling market interest rates have led fixed-income wealth-management products to frequently reduce their performance comparison benchmarks, which has also caused a clear negative impact on major customers’ participation in subscribing to newly issued fixed-income closed-end wealth-management products.

In the past two years, he would prioritize recommending资料 (materials) related to newly issued fixed-income closed-end wealth-management products to “major customers” at bank branches (including high-net-worth clients and enterprise chief financial officers responsible for cash management). Given that the annualized yields of such wealth-management products previously reached 2.8%–3%, some major customers would actively subscribe, with investment amounts at the million-yuan level.

Since this year, because the performance comparison benchmarks of such wealth-management products sold via bank branches have undergone multiple reductions and are generally below 2.5%, these major customers are no longer interested in newly issued products of the same series. Instead, they have directed their funds to hybrid open-end mutual funds, or to debt private fund products whose annualized yields can still reach around 3%.

Breaking the deadlock

To reduce the risk of failed issuance of fixed-income closed-end wealth-management products, Lü Feng is looking for solutions.

Since March, the product department of the wealth-management subsidiary he works for has held multiple meetings, trying to identify all kinds of reasons behind the increasing number of failed issuance cases for such wealth-management products, and has formulated targeted remedial measures.

At present, the product department attributes the growing number of failed-issuance cases of this kind of product to the high degree of homogeneity among the related wealth-management products. This has resulted in a severe mismatch between supply and demand, with a very large gap in product-to-customer fit.

Dong Shimiao, deputy director of the Shanghai Finance and Development Laboratory, believes that severe product homogeneity and supply-demand mismatch are one of the most important reasons for the increased difficulty in raising funds for wealth-management products since this year. Especially under the environment of low interest rates and a shortage of assets, the yield space for fixed-income products has been compressed. Performance comparison benchmarks are generally below 2%, significantly weakening investors’ willingness to subscribe, which has in turn led to more failed issuance situations for newly issued fixed-income wealth-management products.

In terms of investment scope, currently the fixed-income closed-end wealth-management products issued by various wealth-management subsidiaries mostly focus on allocating to mid-to-short-term high-rated bonds and interbank certificates of deposit, making it difficult to create a meaningful yield spread. As market interest rates fall, the overall returns of these products decline collectively; even some products’ performance comparison benchmarks drop below 2%, further reducing investors’ interest.

In terms of product design, fixed-income closed-end wealth-management products from various wealth-management subsidiaries generally set the shortest holding period at 90 days. But when investors factor in both returns and liquidity, the supply of products with this design exceeds market demand, diverting large amounts of wealth-management funds and leading to more failed issuance cases.

Wang Pengbo, an analyst at Tongbo Consulting in the financial industry, believes that this reflects that the wealth-management market is shifting from expansion in scale to games over existing stock, and product supply needs to move away from extensive issuance. Especially product designs and issuance pacing that are out of step with the times can easily trigger risks of failed issuance.

To address these issues, the product department where Lü Feng works has formulated three measures: within the next two months, first slow down the issuance of fixed-income closed-end wealth-management products to avoid new failed issuance risks caused by product crowding; by the end of June, strengthen communication with various product distribution channels and establish an initial mechanism for understanding market demand, so they can precisely grasp the latest changes in investors’ wealth-management needs and develop wealth-management products that highly match those needs; by the end of the year, “do some work” on product design—when expanding investment scopes, add investment strategies such as “gold +,” “quant +,” and “index +” to drive the transformation of fixed-income closed-end wealth-management products into “fixed-income +” closed-end wealth-management products; when adjusting product closed periods, compress the shortest holding period to 45–60 days.

In Lü Feng’s view, for wealth-management subsidiaries, this is undoubtedly an active test of how well they adapt to market changes. Only by finding differentiated solutions through optimizing product layout, improving cooperation mechanisms with distribution channels, strengthening investor companionship, and enhancing insight into market demand, can wealth-management subsidiaries find a new “foothold” in an increasingly fierce competitive market environment.

(At the interviewee’s request, Lü Feng in the article is a pseudonym.)