With the aggravation of China's aging population, the disposable assets of residents are increasing, and the demand for old-age security is growing rapidly. Financial institutions, including banks, have begun to pay attention to the development of pension financing market. In addition, China's unique pension system is facing the challenge of weak development of the first pillar led by the government, and the commercial pension reform based on the third pillar is imperative. Giving full play to the unique advantages of banks in the pension financing market and meeting investors' demand for long-term stable appreciation of pension assets has become the core starting point for banks to lay out the pension financing market. 1. In the early stage of the pension financing market. China's bank wealth management products for the elderly started late and their development lagged behind. At present, the pension financing market is still in its infancy. By July 3, 2020, there are 64,228 bank wealth management products and only 149 pension wealth management products on the market, accounting for less than 1%. Among them, 42 are from bank financing subsidiaries, except for 40 from state-owned commercial bank financing subsidiaries, and the other two are from Ningyin Finance and Everbright Finance respectively. Compared with the same period of 20 19, it increased by 55 periods. Chart1:issuance of pension wealth management products in 2020

Data source: According to the Puyi standard, according to the types of banks, Shanghai Bank issued 57 wealth management products for the elderly, which greatly increased the distribution ratio of city commercial banks, accounting for 7 1.25%, ranking first. Four wealth management subsidiaries of state-owned holding banks issued 40 pension products, accounting for the second, accounting for 26.85%. Joint-stock commercial banks ranked third with 18. 12%. Beijing Rural Commercial Bank issued a series of exclusive products for the elderly in May this year, becoming the only rural commercial bank selling wealth management products for the elderly this year. Figure 2: Distribution of Pension Products of Banks in 2020

Data source: Puyi standard From the perspective of product sales area, the sales of bank pension products are mainly concentrated in North China and southeast coastal areas centered on Beijing, Tianjin and Hebei. The relatively developed economic level and high per capita income provide a suitable market environment for pension products, and the demand for pension products for retirees with stable income has greatly increased. Followed by the southwest region, the circulation of old-age wealth management products is second only to the southeast coastal areas. Guiyang Bank and Yunnan Hongta Bank only issued wealth management products for the elderly in southwest China. There are relatively few old-age wealth management products on sale in northwest and northeast China. Chart 3: Regional distribution of wealth management products for the elderly in 2020 (model)

Data source: Puyi standard From the perspective of product series, there are relatively few series of products for the elderly issued by banks. Except Shanghai Bank and Shanghai Pudong Development Bank, other banks or financial subsidiaries only issued a series of pension products. Product design still lacks diversity and innovation, and cannot meet the different financial needs of investors. Simply expanding the number of products issued cannot fundamentally meet the diversification of pension needs. Chart 4: Distribution of wealth management products for the elderly in different banks in 2020

Source: Puyi Standard Arrangement II. Can the elderly manage their finances for the elderly? Through the analysis of financial products for the elderly currently on sale, we can find that financial management for the elderly can't really play the role of "supporting the elderly". The positioning of bank pension financial products is still financial products, not savings products. Since it is a wealth management product, there are certain risks. However, the majority of old-age financial demanders are pursuing lower risks and even capital preservation requirements, which have been challenged even more after the introduction of new asset management regulations. Investors' demand for "pension" function can generally be divided into three aspects: security, liquidity and profitability. In terms of security, the pursuit of financial security is the primary investment goal of pension investors. Judging from the wealth management products for the elderly issued this year, low-risk products accounted for the largest proportion, reaching 39.72%, followed by medium and low-risk products, with a higher proportion.

Compared with ordinary wealth management products, pension wealth management products are more concentrated in low-risk levels, with lower risk levels and higher security; Compared with the pension product line of fund companies, bank pension products better match their risk preferences and conform to the investment habits of the elderly. However, it is worth noting that a large part of the pension wealth management products currently on the market belong to capital preservation products. After the new asset management regulations, capital preservation products will soon disappear, bank wealth management will be managed in the form of net worth, and pension wealth management products will gradually transform into net worth products, bearing the fluctuation of yield brought about by market fluctuations. Chart 5: Comparison of risk levels between pension wealth management products and general wealth management products in 2020

Data source: In terms of liquidity, the investment period of pension wealth management products is generally long and the liquidity is poor. The average investment period of pension wealth management products issued in 2020 exceeds 1 year, reaching 602 days. The long-term pension needs of investors determine that the investment period of such products is relatively long. However, daily expenses, medical treatment, travel and other behavioral characteristics lead investors to demand more liquidity in the use of funds. In order to meet the liquidity needs of investors in their daily lives, many pension financial products have developed dividend and pledge functions. For example, the closed-end wealth management product "Sunshine Gold Pension No.65438 +0" issued by Everbright Wealth Management will return 25% of the shares to investors every year after its establishment for two years, so as to realize the short-term liquidity arrangement under the long-term investment goal; Bank of Communications Wealth Management allows investors to pledge their wealth management products in the APP to obtain short-term liquidity. From the perspective of yield, the average performance benchmark of net worth wealth management products for the elderly issued in 2020 is 4.70%, which is relatively higher than that of general bank wealth management products. Many investors with pension and long-term investment needs are often not satisfied with pure debt products and bank deposit income. They hope to participate in market investment to a certain extent, and get a higher rate of return on the premise of capital preservation. How to balance security and profitability requires product developers to weigh carefully. Judging from the product layout of financial subsidiaries, it is imperative to enter the equity market. The long-term investment period of pension wealth management products provides more considerable living conditions for the long-term capital investment in the equity market and the allocation of long-term creditor's rights assets and equity assets. 3. Summarize and look forward to the high-quality pension needs of special groups with stable income after supplementing the basic pension and enterprise annuity. Like pension funds, commercial pension insurance and other products, it is a diversified choice of pension financing channels, which plays a icing on the cake in the aspect of pension. Pension is a long-term plan, and pension products are only an option for investment and financial management. Judging from the actual situation of pension products at present, in order to give full play to the function of "pension", it needs to be clear that the sales target of pension products should be customers with pension assets reserves and demand for maintaining and increasing value, not just the elderly. There should be no problems such as serious homogenization and insufficient pertinence in the design of old-age products. Bank asset management institutions can fully grasp the needs of old-age care, subdivide customer groups according to age structure, develop old-age care products covering all stages from prime of life to old age, and provide personalized old-age financial services; We can divide the product types according to the wealth status, balance the relationship between liquidity and profitability, and provide certain value-added services while meeting the basic needs of customers for old-age care.