Wealth Management Connect makes strong start on both sides of the border

The Wealth Management Connect, the new cross-border scheme for the Greater Bay Area, made a solid debut on Tuesday, with most banks indicating strong demand for their investment products in the mainland and Hong Kong, according to bankers.

HSBC, Standard Chartered, Bank of China (Hong Kong) (BOCHK) and 10 other lenders contacted by the South China Morning Post, said the response from customers to open bank accounts was positive, with many of them buying investment products across the border.

“We have received requests from several hundred customers in Hong Kong who have asked us to schedule a time for them to open an account under the new connect scheme to trade the mainland investment products,” said Arnold Chow, deputy general manager for personal digital banking products at BOCHK. “Likewise, several hundred customers in the Greater Bay Area cities want to set up accounts here to trade Hong Kong products.”

BOCHK said the first customers opened an account in Hong Kong and Qianhai, Shenzhen, right after they opened for business at 9am. The account opening and product purchase only took them 20 minutes to complete, it said.

One of the basic requirements is that all banks have customers to be present at a branch to open a wealth management account, following which they can use the respective bank’s mobile phone app to invest and transfer funds.

Chow noted that mainland customers preferred mixed-asset funds tracking bonds and stocks, while Hong Kong investors like yuan bonds and other yuan products sold in the mainland.

The Hong Kong Monetary Authority on Monday approved 16 banks to sell products in the city and the mainland from Tuesday, while three banks were allowed to only sell products to mainland residents via the southbound route. Most banks offer dozens of investment products, including funds, bonds and foreign currency deposits for bay area investors.

The launch of the Wealth Management Connect scheme on September 10 – Beijing’s first scheme tailor-made for the 11 cities of the Greater Bay Area – marks a further opening up of China’s capital market. The scheme has an initial quota of 300 billion yuan (US$46.5 billion) in fund flows in both directions, but each investor is only allowed to trade up to 1 million yuan on a net remittance basis.

BOCHK has assigned 3,500 staff for the wealth connect scheme. HSBC, which plans to mobilise 5,000 employees to sell cross-border investment products, has also set up 60 wealth connect centres in the Greater Bay Area.

“Our survey has indicated over 80 per cent of Greater Bay Area citizens like to invest in the connect scheme,” said Maggie Ng, head of wealth and personal banking at HSBC Hong Kong. “We are positive that the scheme will boost our wealth management business.”

Other lenders including Standard Chartered, China Construction Bank Asia, ICBC Asia, CMB Wing Lung, DBS and Dah Sing Bank also said that they had opened accounts for customers in the southbound and northbound routes.

“We have offered over 100 investment products for customers including funds, forex and other investment products_,” said Lay Choo Ong, head of consumer, private and business banking of Hong Kong office of Standard Chartered. The bank said it will introduce more products for the Greater Bay Area customers as the need arises.

Lawrence Lam, consumer business manager at Citibank Hong Kong, said the Wealth Management Connect will open up unprecedented market opportunities for the financial industry.

“Hong Kong is one of the wealth hubs in the region for Citi, and we are committed to investing in our wealth management franchise in Hong Kong with the GBA being a key strategic market that will fuel future growth,” he said.