Diversifying Overseas Asset Allocation and Empowering Financial Planners
Chao Zhu is very busy. He was nominated as one of the young entrepreneurs on the list of the Forbes’ 30 Under 30 in 2016. After attending an event that ended at 6 p.m., he came to the interview site. After nearly two hours of interviews, he hurriedly ate a chicken roll as his afternoon meal.
Zhu likes to talk about his entrepreneurial experience. From creating the largest financial recruitment and training platform in China, he went on into the field of finance and human resources. To realize the value of high-quality investment, he established the overseas asset allocation service platform “Lixiangjia,” or Asset Pro.
As China enters the era of consumer generation, more Chinese are entering into asset management. From the middle class to the affluent, wealth management awareness has been significantly enhanced. It has become a trend to invest overseas in China. As a trustworthy overseas asset allocation service platform that “make sales more valuable and make overseas asset allocation easier,” Asset Pro was founded in this generation.
In Zhu’s opinion, Asset Pro is a bit like the Uber in wealth management. “In Uber, the driver is the one who earns the most. Asset Pro is a financial planner that can really push this overseas asset and product to the customer, introduce the customer and complete most of the work so he can earn the most.”
Allocation of Assets Overseas
“In fact, many high-quality overseas assets have been noticed by Chinese people, such as Hong Kong insurance and real estate in various countries. Some people start to make some immigration plans, some invest in education area and some people want to have overseas medical services,” Zhu said. Although this is a big asset allocation trend for Chinese people, it is more like the easy-to-buy, easy-to-understand format of the allocation. Just like Hong Kong insurance, it has the characteristics of overseas assets that have become the preferred method for overseas asset allocation.
The business of Asset Pro involved in overseas asset allocation is organic. Zhiyemeng has grown to be the largest recruitment platform for finance in China. There are nearly 5 million job seekers got jobs through this platform and 15,000 companies use the platform to find talented candidates.
Zhu observed a phenomenon from the recruitment and job hunting trends: "The biggest increase in the past two years is the so-called big capital management and other enterprises, insurance, trust, wealth management and private placement. Various kinds of financial institutions need a large number of distributors to distribute the products they produce."
Zhu said that after meeting up with a lot of financial planners, specifically, some independent financial planners, he has learned that they have significant resources for customer services. But it is indeed subject to the fact that either you can't find a good asset, or you can find a good asset.
It is precisely to see the pain points and market opportunities in this industry that Zhu launched the business of overseas asset allocation.
Chinese Financial Planners are Profiting
According to reports, Asset Pro currently has a sales volume of 300 million in Hong Kong insurance every month.
So, how much benefits can a financial planner get? Zhu revealed the ratio of commissions.
"For example, the equity products, the general sales commission in the industry is about 2% to 3%, sometimes 1%. For fixed-income products, the sales commission is almost 0.003 to 0.008. P2P products, 0.0008 to 0.001.” Zhu said that the mainstream Hong Kong insurance products represented by Asset Pro can reach 50% to 90% of the first year's premiums. Which means, the financial planner sells 100 yuan of insurance money and the customer pays 100 yuan. The financial planner may take away 90 yuan in the highest case, and the highest product can give 99.9%.
So why do overseas insurance companies give compatible commission? "Because they earned money in the end, but for the financial planner, he earned in the first year." Zhu also gave an example. Comparing the same Hong Kong insurance products, the income of financial planners in the financial institutions is 20 yuan when they sell 100 yuan worth of products, but have to be divided into years when they get the commission. Asset Pro is different, you will get 60 yuan to 70 yuan immediately.
This is a trend in the Chinese financial planner industry. According to data, U.S. independent financial services account for 60% of the overall wealth management service market, Australia is 50%, Hong Kong is 30% and China is only 1%.
Asset Pro just met this huge demand in the market. At present, there are nearly 300 channel-type service providers that cooperate with Asset Pro. There are more than 300 wealth management institutions registered on the platform, and there are nearly 8,000 individual financial planners.
Abundance of Quality Wealth Management Options
In Zhu's strategic plan for Asset Pro, Hong Kong insurance is just the beginning of Chinese overseas asset allocation. “Because insurance companies are relatively large and stable, and the insurance benefits of investment are relatively secure, there will be more investment directions, such as real estate projects that Chinese people like. Some customers have risk tolerance and favor overseas funds." Zhu said that the diversification of products, the upgrading and complication of products and the systematization of products will be an overall trend in overseas asset allocation.
Undoubtedly, there is a bright future for overseas asset allocation platforms and financial planners.