From 0 to 100 billion yuan, it took 7 years; and from 100 billion to 350 billion yuan, it took only 3 years.
As the source of trust business encouraged by supervision, family trust has developed rapidly in recent years and has become an important business transformation direction for trust companies. Many companies have increased their investment and increased attention, and family trust service capabilities have generally improved.
The latest data from China Trust Registration Co., Ltd. shows that as of the end of 2021, the stock of family trusts has reached 349.481 billion yuan; in January 2022, the scale of family trusts in a single month increased by 12.899 billion yuan, an increase of 33.54% from the previous month, a record year high.
Recently, the 2021 annual reports successively disclosed by trust companies presented the evolution of this sunrise business in a more subdivided manner. According to the relevant information compiled by Yiyi Trust, the top 16 trust companies in the family trust business in 2021 will all exceed 10 billion yuan, of which 4 trust companies will exceed 50 billion yuan, followed by CCB Trust, Ping An Trust, CITIC Trust, FOTIC.
In terms of the type of entrusted property, many trust companies have tried to expand vertically to explore more possibilities for capital-based family trusts, insurance trusts, and equity family trusts; on the asset side, non-standard supply is shrinking, and trust companies pay more attention to building assets Allocation capabilities, and some have already implemented the first standardized family trust in the equity investment model.
“In general, most trust companies already have mature teams and management structures in the business of developing family trusts. Next, we must focus on and develop ‘other wealth management trusts’.” The Family Trust Department of a trust company in East China The person in charge pointed out to the reporter that in the future, the trust company will focus more on providing financial planning, asset allocation, investment management and other wealth management trust services for the client. From a customized perspective, the client’s family demographics, occupational risks, child arrangements, pensions will be considered. Planning, etc., to provide clients with wealth management solutions suitable for their family life cycle.
Vertical expansion of entrusted property
In the early days of the family trust business, the trust property established by the client was dominated by financial assets, especially monetary funds, followed by asset management products and insurance policies. , the types of family trust properties are constantly enriched, the establishment of family trusts with corporate equity, real estate, artworks and other properties has further increased, and the types of trust properties managed by family trusts have been continuously enriched.
On May 25, 21st Century Business Herald reporters reviewed the survey questionnaire data of the Trust Industry Association over the years and found that the proportion of family trusts with monetary funds as their entrusted property showed a downward trend.
Specifically, at the end of 2018, the types of entrusted property of surviving family trusts were mainly monetary funds, and there were no clear and standardized statistics for other types.
At the end of 2019, among the entrusted property types of surviving family trusts, monetary funds accounted for about 89.19%; asset management and trust wealth management products accounted for 8.66%; insurance policies and equity types accounted for 1.75% and 0.40% respectively.
At the end of 2020, the scale of family trusts included in the survey questionnaire of the Trust Industry Association was 81.7 billion yuan, of which the scale of monetary funds accounted for 66%; the scale of wealth management products accounted for 26%; and the scale of insurance policies accounted for 5.6%.
In addition, in 2020, 9 trust companies launched the family trust business with equity as entrusted property, with a total of 18 orders and a scale of 1.452 billion yuan (3 orders have unpublished data), of which the scale of Zhongrong Trust and Ping An Trust exceeded 500 million yuan; there are only two family trusts with real estate as entrusted assets.
A trust manager engaged in family trust business told the 21st Century Business Herald reporter that due to the high taxes and fees involved in the transfer of real estate, financial institutions themselves are not willing to accept the entrustment of real estate, and prefer to set trigger conditions in the trust contract to transfer the real estate. After realisation, it is added to the trust property. In the absence of trust property registration and non-transactional transfer, it is still very difficult to carry out family trust business with real estate as the entrusted property.
Combing the annual reports and official public information of trust companies in 2021, we can find that cash-based family trusts, insurance trusts with insurance policies as entrusted properties, and equity family trusts are still the main battlefields of trust companies, and in 2021, they will focus more on vertical expansion.
For example, CCB Trust and Ping An Trust have successively launched inclusive family trusts with full online management. From the perspective of the type of entrusted property, the former is mainly monetary funds, and the latter is an insurance policy. The threshold for establishing such trusts is greatly lowered; CITIC Trust The “Trust + Will” service was launched, which combined the three inheritance tools of family trust, insurance and will. At the same time, in the field of non-cash property, the industry’s first credit asset insurance trust was launched.
There have also been breakthroughs in the nationality of entrusted properties. Following CCB Trust’s innovative launch of family trust services for U.S. beneficiaries (including beneficiaries who hold U.S. citizenship, U.S. green cards or become U.S. tax residents for other reasons) in 2020, In 2021, Minmetals Trust launched an American beneficiary family trust, and Changan Trust also launched the first large-amount “grandmother trust” involving Canadian beneficiaries. In early 2022, Zhejin Trust successfully established an Australian tax resident beneficiary trust in China. .
In terms of taking equity as the entrusted property, AVIC Trust assists the client to hold nearly 100 million yuan of equity in start-up technology companies through family trusts; assists the client to establish an employee innovation incentive trust to reward employees who have made special contributions to the company’s innovation; Minmetals Trust also digs deep into the complex and diverse needs of family customers, establishes equity family trusts for the actual controller of the enterprise, and establishes employee incentive service trusts for core employees of the enterprise; the equity family trust indirectly held by Changan Trust Co., Ltd. has its first domestic A-share listing ( IPO) listing.
It is worth noting that since the establishment of trusts with equity and stocks in China is also facing similar problems of real estate trusts, many domestic equity or listed company stock family trusts have adopted “fund-SPV-equity” and “fund-stock”. ” structure to address the main hurdles in the establishment of such trusts.
Asset allocation tends to diversify
Monetary funds are still the mainstream property form of family trusts. Even for non-cash family trusts, many of them will generate funds with management, use and disposal, which means that the trustee needs to invest and allocate funds.
According to the “China Trust Industry Development Report (2020-2021)”, according to the incomplete statistics of the trust industry association’s survey questionnaire, the current family trust assets are mainly allocated to the trust company’s own products, followed by other financial products and externally purchased trust products.
In terms of investment in the trust company’s own products, the scale of family trusts’ investment in the company’s own fixed income products according to the survey questionnaire was 34.515 billion yuan, accounting for 64.43%, followed by investment in other non-trust financial products (mainly bank wealth management products). products, private equity funds, etc.) was 10.531 billion yuan, accounting for 19.66%, and the scale of investment in self-owned securities investment trusts and equity investment trust products accounted for only 0.9% and 7.95%, indicating that the asset allocation of family trusts has not yet Really diversify.
The report pointed out that, on the one hand, the risk appetite of family clients is generally low, and the client’s concept of asset allocation in major categories is still relatively weak; on the other hand, it is also related to the insufficiency of trust companies’ ability to allocate assets for clients.
“From the perspective of family trust asset allocation, it should be value investment, long-term investment, and should not rely on fixed income and rigid payment.” A family office executive once told reporters that after 2013, commercial banks, Third-party wealth management companies and trust companies have allocated a large number of collective trust projects to family trusts, one of which is mainly invested in real estate financing trusts. Since the first half of 2021, the credit risk of real estate enterprises is still deepening, such as transmission to family trusts. , will affect the reputation of the family trust brand to a considerable extent.
However, under the background of regulatory reduction of financing trust business quotas, many trust companies have begun to strengthen the construction of investment and research systems, set up professional investment teams, and improve their capabilities in asset allocation and asset management.
The “2021 Special Research Report on the Trust Industry” pointed out that with the transformation of the trust industry, trust products have changed from traditional non-standard products to a diversified combination of “standard products + non-standard products”, covering non-standard trust products, public funds, private funds, liquidity Sex products, equity investment and other product types.
Take China Everbright Trust as an example. In 2021, it will launch the first standardized family trust for a family trust to invest in a Pre-IPO equity project. This family trust is a standardized family trust under an innovative model, which is a true equity investment model, not a traditional family trust. Fixed income model of trust projects.
“We do feel that FOF products have become an increasingly important allocation direction for family trusts.” Ma Shaojing, deputy general manager of FOTIC, also mentioned in an exclusive interview with reporters in early 2022 that family trusts have the characteristics of long existence, stability and inheritance. It is very matched with the risk-return characteristics and advantages of FOF products, so this trend change may be said to be inevitable. At the same time, the FOF business can also design customized FOF products for some family trusts based on its asset allocation capabilities.
Shen Zhiqiang, director of the trust business of CCB Trust, also mentioned in public occasions that family wealth management has gradually shifted from the allocation of simple fund trusts or fixed-income products to the allocation of equity in unlisted companies and major assets. In the future, this road should be more and more wider.
(Author: Zhu Yingzi Editor: Zeng Fang)