Innovative wealth pilot major hit in GBA

The Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area has received a warm response from local investors since the first batch of banks participating in the program launched such services on Oct 19. Potential investors have actively made inquiries about the products offered under the scheme, bankers said.

"The Cross-boundary WMC has further expanded investment channels for GBA residents. Ever since the services were launched, we have seen strong interest among our clients to make investments, especially in hybrid funds, via the Cross-boundary WMC, which consists of the southbound scheme and the northbound scheme," said Daniel Chan, head of Greater Bay Area at HSBC Bank (China) Co Ltd.

The bank has received a large number of inquiries regarding the business and scheduling appointments to open investment accounts, Chan said without disclosing specific figures.

Currently, under the southbound scheme, HSBC's clients can invest in many products whose risks stand at a low or medium level, such as multicurrency money market funds and multi-asset funds managed by global fund managers－as well as bonds issued by international companies or government agencies. Under the northbound scheme, the bank offers multiple hybrid funds and bond funds managed by outstanding fund managers.

"As the investors in Guangdong province and Hong Kong keep deepening their understanding of the investment rules and products of the Cross-boundary WMC, we believe we'll see increased client participation in the program via the southbound and northbound schemes and a steady growth of the client investment in products under the program," Chan added.

Standard Chartered said it has also received many inquiries about the services. The bank said Shenzhen and Guangzhou residents warmly embraced its investment channels via the southbound scheme in terms of investment account opening. It provides mainland investors with funds whose investment themes include electric vehicles, medical technologies, smart cities, and environmental, social and governance.

To allow more investors in Hong Kong to directly receive benefits brought by the development of the new economy in the mainland, the bank sells funds focusing on investment opportunities in new consumption, new energy, new infrastructure, new manufacturing and new technology industries via the northbound scheme.

"It has been a great honor for Standard Chartered to continuously help our clients in the GBA try new products since the first batch of banks started implementing the Cross-boundary Wealth Management Connect Pilot Scheme over a month ago. During the process of participation, we have seen robust demand for wealth management services among our clients in the GBA," said Jessie Li, deputy CEO of Standard Chartered China.

"Under the framework of the Cross-boundary WMC, Chinese mainland investors are allowed for the first time to directly invest in wealth management products sold by banks in Hong Kong and Macao. This is a highly valuable new mechanism and a new opportunity for GBA residents and financial institutions in the region," Li said.

In Shenzhen, a pilot city for the program in Guangdong province, 20 banks participating in the program opened 5,079 accounts related to Cross-boundary WMC business and recorded cross-boundary fund transfers and remittances totaling 104 million yuan ($16.33 million) as of Nov 19. Individual investors purchased investment products worth a total of 54.18 million yuan by the same day, said the Shenzhen Central Sub-branch of the People's Bank of China.

In other pilot cities in Guangdong, including Guangzhou, Zhuhai and Dongguan, net capital inflow via the northbound scheme reached about 110 million yuan before Nov 22, while net capital outflow via the southbound scheme was 98.21 million yuan, said the Guangzhou Branch of the PBOC.

Sebastian Paredes, CEO of DBS Bank (Hong Kong) Ltd and nonexecutive director of DBS Bank (China) Ltd, said: "With the continuous rapid growth of the GBA market, we believe our clients' demand for cross-boundary wealth management services will increase. This will help boost the growth of wealth management business within the region."

The Bank of East Asia Ltd is also expected to see significant development potential for cross-boundary business. It plans to hire 300 salespeople in the GBA in the next three years to help its clients grasp opportunities associated with the Cross-boundary WMC and seize regional development potential in other aspects.