Winners rationale

In 2017, Chinese regulators delivered a wakeup call to the domestic wealth management industry in the form of a coordinated crackdown on the use of wealth management products (WMPs) as channels for shadow lending and the provision of implicit guarantees, among other widespread practices. Widely expected to separate the wheat from the chaff, the reforms should play into the hands of wealth management firms that are not only appropriately licensed, but that conduct their business in line with the long-term, holistic needs of clients. Accordingly, a select few firms are paving the way for this new era of Chinese wealth management, with Noah Holdings, China’s largest independent wealth management firm, leading from the front.

In 2017, Noah cemented its position as China’s most mature and forward-thinking wealth manager for China’s rapidly growing HNW segment, further pivoting away from pure product distribution to become a full-spectrum solutions provider and, correspondingly, the go-to wealth manager for domestic and overseas Chinese clients who not only demand best-in-class investment opportunities but genuine global asset allocation and ancillary services around succession and tax planning, trusts management and, immigration and education.

Delve beneath the surface of Noah’s impressive figures for 2017 (for instance, accumulated products distributed increased by 32% YoY to RMB 470 billion, the average transaction per client hit RMB 9.26 million, and asset management AUM jumped 24% YoY to RMB 143 billion [as of 30 September 2017]) and what becomes apparent is just how much the firm is prioritising quality, sustainable growth. Almost half of total revenue in 2017 is attributable to recurring fee income. At the same time, Noah distributed less fixed-income products – traditionally the bread and butter for Chinese wealth management firms – in favour of private and secondary market equity products.

2017 will also go down as a marquee year for Noah on account of its globalisation activities, with the firm adding real estate capabilities in New York, dedicated presences in Canada and Australia, and launching a Global Family Office service targeting UHNW Chinese families.

Noah continues to dedicate huge resources to upskilling its relationship managers and clients alike. Adding to an already comprehensive training system for its vast frontline, Noah launched the Noah Wealth 2017 Private Banker Program in cooperation with Shanghai University of Finance, with its primary focus being asset allocation. Similarly, Noah’s Enoch Education arm provides extensive training to the wealth manager’s clients, on the basis that the healthy development of China’s wealth management industry is contingent upon investors to better understand asset allocation and the relationship between risk and return.

Ultimately, it is Noah’s dedication to progressing the art and science of wealth management in China that makes it a worthy recipient of the title of Best Wealth Manager – China Domestic for the second year running. Setting aside the firm’s strong business performance, Asian Private Banker notes the strides Noah is making in establishing best practices, meeting the increasingly globalised needs of Chinese investors and, ultimately, demonstrating the long-term promise of China’s wealth management industry.