Multiple banks cut their wealth management performance benchmarks by 50%. How should investors choose?

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Summary

Wealth management companies should help investors make rational judgments about product management capabilities and risk-return characteristics, and effectively implement investor suitability management requirements.

Since 2026, many bank wealth management products have seen their performance benchmarks lowered, with some even halving, with reductions exceeding 50%.

Currently, a “one-and-a-half-year fixed-open product” from a nationwide joint-stock bank’s wealth management company has a performance benchmark of the one-year fixed deposit rate published by the People’s Bank of China (currently 1.5%) + 0.85%, totaling 2.35%, down from the previous 4.25% to 4.75%, a decrease of over 80%. Several other products from this wealth management company also have benchmarks that have dropped by up to 45%.

Another wealth management company has adjusted the benchmark for its “daily open fixed income products” from an annualized 2% to 2.7% to the “7-day notice deposit rate” published by the People’s Bank of China (currently 1.35%), with a maximum decrease of 50%.

According to financial reporters, many wealth management products are gradually moving away from traditional fixed numerical or interval benchmarks toward market interest rate-based or index-linked benchmarks.

For example, the benchmark for the aforementioned wealth management product is linked to the one-year fixed deposit rate plus a basis point published by the People’s Bank of China, or the 7-day notice deposit rate, which are relatively simple calculation methods.

However, many wealth management companies also use composite index benchmarks, which are more complex to calculate, such as 30% × the People’s Bank of China’s published current deposit rate + 70% × the CSI 0-6 month government bond index yield, or 40% × the three-month fixed deposit benchmark rate (after tax) + 60% × the ChinaBond comprehensive wealth index (less than one year).

“This round of adjustments is the result of combined regulatory constraints and market conditions, and in the long run, will promote healthy industry development,” said an industry analyst. However, how to translate professional investment logic into communication that clients can easily understand, and establish a system for dynamic management and disclosure of benchmarks, is a challenge that wealth management institutions must face.

Multiple bank wealth management benchmarks lowered by 50%

Recently, several wealth management companies have adjusted the benchmarks for some products, with reductions of up to 50%.

For example, since January 22, 2026, the benchmark for “Hengfeng Wealth Hengyou One-and-a-half-year Fixed Open Product (2021, Issue 1)” was lowered to the one-year fixed deposit rate published by the People’s Bank of China plus 0.85%, or 2.35%. Previously, the benchmark was between 4.25% and 4.75%, representing a minimum decrease of 80%.

Hengfeng Wealth’s official website also shows that in November 2026, two “Hengyou Enhanced One-and-a-half-year Fixed Open Products” will see their benchmarks drop from 3%–3.4% to the one-year fixed deposit rate plus 0.85%, a decrease of 28% to 45%.

The performance benchmark is a reference standard set for wealth management products, used to measure product performance, constrain investment behavior, and help investors determine whether the product has generated excess returns. It does not represent future performance or actual yields, but is often called the “anchor” or “yardstick” of investment.

Some products from Minsheng Wealth Management have also adjusted their benchmarks. For example, its “Gui Zhu Fixed Income Enhancement Two-Year Fixed Open Product No. 2” had a benchmark of 4.0%–6.0% before adjustment, now adjusted to 2.6%–3.1%.

“This wealth management product plans to invest at least 80% in fixed income assets, with non-standard debt assets not exceeding 40%; up to 20% in equity assets; and up to 5% in fixed income derivatives. The benchmark is set by the manager based on the product’s investment scope and proportions, investment strategy, yield calculations, product fees, and considering market conditions,” Minsheng Wealth Management stated.

Other wealth management companies have also experienced significant fluctuations in benchmarks. For example, Xingyin Wealth recently announced that the benchmark for the “Wintain ESG Daily Profit Increase No. 74 Daily Open Fixed Income Product” was adjusted from a fixed annualized range of 1.75% to 2.65% to the 7-day notice deposit rate published by the People’s Bank of China.

“The shift of bank wealth management product benchmarks toward market interest rate or index-linked benchmarks is a result of regulatory constraints and market environment,” industry analysts said.

In December 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 states that reasonable past performance disclosure rules should be established, including the calculation methods, statistical data, and sources should be true, accurate, and comprehensive. Past performance disclosures should follow principles of stability and internal logical consistency, avoiding arbitrary changes to disclosure rules or selective disclosure of certain periods to exaggerate past performance, and applying consistent disclosure rules for similar products.

According to Cai Mengyuan, an analyst at Huabao Securities, traditional fixed benchmarks lack market logic and are prone to frequent adjustments, facing compliance pressures. Meanwhile, the continuous decline in fixed income asset yields makes it difficult for wealth management assets to support previously high fixed benchmarks. Coupled with regulatory efforts to curb “performance ranking” chaos, the industry is being pushed toward more prudent and truthful yield disclosures.

“Performance ranking” refers to some wealth management firms artificially creating short-term high-yield products through small-scale fund operations and yield manipulation to attract investor funds. “Recently, regulators have penalized related institutions and required the entire industry to rectify,” said a wealth management industry insider.

How can ordinary people choose wealth management products?

Although yields on wealth management products have generally declined in recent years, they still have a clear advantage over three- and five-year fixed deposits at major state-owned and joint-stock banks, with stronger liquidity. Data from China Wealth Management Network shows that the average yield in 2025 is 1.98%.

Monthly annualized yields of various wealth management products since 2021

Source: Puyi Standard, Guoxin Securities Economic Research Institute

Currently, some wealth management products have shifted from numerical benchmarks to index-based ones, but many only disclose index names without showing the corresponding quantitative performance or calculation methods, making it difficult for investors to compare actual yields directly.

How should ordinary investors choose bank wealth management products? “For products based on benchmark or market interest rate adjustments, it’s easier to grasp, but complex index combination products are hard to calculate,” many investors said.

“A strategy of multi-asset allocation in a low-interest-rate, high-volatility environment can control drawdowns and buffer against market fluctuations, providing a stable, low-volatility asset allocation plan,” said a wealth management professional. However, this approach may not be very friendly to many investors lacking professional knowledge.

According to Zhou Yiqin, a senior financial regulation policy expert, it is recommended to prioritize products with high performance benchmark compliance rates, focus on the deviation of actual returns from benchmarks over the past six months, one year, and full fiscal year, and avoid products with frequent benchmark adjustments.

Second, investors should pay attention to phase yield volatility, selecting products with small fluctuations over key periods like three months or one year, and beware of “shell” products that artificially inflate performance.

Third, observing the net value curve is also helpful—prefer products with smooth curves and small drawdowns, which reflect the manager’s research and risk control capabilities.

“If investors understand the calculation logic of index-based benchmarks and their underlying assets, they need some learning effort, which may affect short-term acceptance. For wealth management institutions, transforming professional investment logic into client-friendly communication and supporting systems for dynamic benchmark management and disclosure are also challenges,” Cai Mengyuan and others said.

Zhou Yiqin suggests that in product disclosures, wealth management firms should display phase yield rates, net value trend charts, and index benchmark trends side by side, clearly showing deviations, relative returns, and volatility differences. Additionally, they should help investors make rational judgments about product management capabilities and risk-return features, and effectively implement investor suitability management.