Banks Collectively Cut Deposit Rates, Wealth Management Firms Launch Fee Reduction Campaigns as Industry Experts Note Limited Room for Further Decline.
Following major banks’ collective reduction of deposit interest rates on May 20, with the one-year fixed deposit rate dropping below 1%, wealth management subsidiaries have seized the opportunity to launch a new round of fee reduction promotions. Industry insiders noted that while such moves reflect market competition, the space for further rate cuts remains constrained.
According to an announcement from Guangda Wealth Management, the firm will implement a fee discount for its “Sunshine Jin Fengli Le Shang 198th Issue (Institutional Exclusive)” wealth management product from May 21 to December 3, 2025. Specifically, the management fee will be slashed from 0.15% to 0.07%, and the sales service fee will drop from 0.2% to 0.08%.
However, a senior marketing executive from a leading wealth management subsidiary told Caixin on May 28 that fee reductions are part of the market strategies wealth management companies have been adopting recently, emphasizing that there is no direct link between interest rate cuts and fee adjustments. The executive also revealed that no specific calculations have been made regarding the lower limit for product fee reductions.
At the end of March, some wealth management firms announced rate reductions to zero. For example, Bohai Bank Wealth Management stated it would reduce the fixed management rate of two fixed-income products from 0.6% to 0% as a gesture of gratitude to investors. Currently, zero-fee products remain rare in the market.
Liao Zhiming, a financial industry expert, pointed out that the current phased fee reductions by wealth management companies are a market-driven strategy, but he emphasized that there is limited room for further declines in fees.
This round of market adjustments comes as the financial sector faces intensified competition, with wealth management firms aiming to attract investors through cost optimization while navigating the constraints of rate reduction space.
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