Investment consulting groups are professional advisory firms that provide consulting services to institutional and individual investors on topics like asset allocation, portfolio construction, investment manager selection, and risk management. With the rapid development of China’s capital market, investment consulting industry has seen explosive growth in recent years. According to official statistics, by the end of 2020, there were nearly 800 investment consulting agencies in China, with total assets under management exceeding 15 trillion RMB. This article analyzes the background, business models and key players in China’s investment consulting industry. It focuses on introducing major investment consulting groups, their services, clients, business scopes and market positions.
The background and drivers of the rise of investment consulting groups in China
The rise of investment consulting industry in China mainly stems from the following factors: 1) China’s capital market reform and opening up provide huge room for growth of investment consulting business. 2) The transition from quantitative easing to quantitative tightening in major economies leads to greater demand for professional investment consulting services. 3) Institutional investors like mutual funds, securities firms and insurance companies accelerate outsourcing investment advisory business to professional consulting agencies. 4) Rapid accumulation of private wealth in China stimulates demand for customized investment advisory services. 5) Digital transformation empowers investment consulting groups to leverage big data and AI to enhance research and advisory capabilities.
The major business models of investment consulting groups
Investment consulting groups in China generally operate under three models: 1) Investment advisory services targeting institutional investors. Consultants help design asset allocation strategies, conduct manager selection, assist investment decision-making. 2) Customized wealth management services targeting high net worth individuals. Consultants provide tailored portfolios and dynamic investment plans to high net worth clients. 3) Macro research and industry research services. Consultants publish industry reports, data analytics, survey results to provide insights on macro trends and specific sectors.
The landscape and major players of investment consulting industry in China
China’s investment consulting market is dominated by a few leading players. According to latest industry rankings, the top investment consulting groups are: China Universal Asset Management, Noah Holdings, China Merchants Fund, Guotai Junan Securities, GF Fund, Harvest Fund, China Asset Management, E Fund, Zhonghai Fund and so on. These companies have established solid brand reputation and own competitive edges in their focused segment. But the market concentration is not high overall. With policy support and technology innovation, there is still large space for the investment consulting industry to grow.
Case studies of major investment consulting groups in China
Here are some case studies of major investment consulting groups: 1) Noah Holdings. Founded in 2005, Noah is a leading wealth and asset management service provider. It manages over RMB 150 billion assets for high net worth clients. Its core competence lies in customized asset allocation services. 2) China Merchants Fund. As one of the first fund companies in China, it leverages big data analytics to provide institutional clients with data-driven research and advisory solutions. 3) Guotai Junan Securities. The investment consulting arm of leading securities brokerage firm Guotai Junan. It has strong capabilities in alternative investments and family trust services.
In conclusion, China’s investment consulting industry has maintained rapid growth in recent years thanks to capital market development, wealth accumulation and technology innovation. Major business models include institutional advisory, private wealth management and industry research services. Leading investment consulting groups have established solid market positions through specialized services and strong client relationships.