Jingbo Wang, founder, CEO and chairperson of Noah delivered a speech at the 10th anniversary of Noah listing. On November 10, 2010, Noah Holdings was listed on the New York Stock Exchange. The significance of this date is: one company uniting one team of dedicated people to pursue a dream from ground zero. 10 years later, looking back at the original ambition, Noah is already on the right track. On the occasion of the 10th anniversary of Noah listing, Jingbo Wang, founder, CEO and chairperson of Noah, expressed her sincere gratitude to the customers who accompanied Noah all the way, and shared her thinking about the past and the future.
The following is based on Jingbo Wang’s speech (abridged).
Ten years ago today, Noah Holdings was listed on the New York Stock Exchange. At the beginning of my career, I said I wanted to be in wealth management for the rest of my life and accompany my customers for three generations. Today, just like ten years ago, I still dream the same dream. For me, today is not only a celebration of the 10th anniversary of Noah listing, but also a choice.
I appreciate the trust and companionship of our customers along the way. Now, standing at a new start, Noah will, as always, respect the market, value common sense, be customer-centric and keep up the efforts.
Embrace change; turn to net-worth products and portfolio products
Standing at the new start, we are embracing the era of net worth, when we shall create long-term value for our customers despite volatility. China’s wealth management and asset management industry is also at a new start. For the future, Noah is full of confidence.
China’s wealth management industry is undergoing changes and Covid-19 has accelerated these changes. From 2012 to 2019, banking and wealth management industry has developed in fast pace because of capital pools and rigid payment. Now it is at the center of changes. With deleveraging in 2018, overhauling of financial chaos in 2019, and the epidemic in 2020, net worth products and portfolio products advocated by the new regulations have quickly become mainstream in China’s wealth management industry. New demands from customers have exceeded industry expectations.
In line with market trends, Noah has made a paradigm shift to move away from non-standard fixed income assets to standardized funds, and to transform from product-driven to service-driven, from sales-driven to investment consultancy-driven, from sales scale-driven to active management-driven. All of the non-standard fixed income products have been actively paid before maturity till none remained in Noah’s assets. As of 2020Q2, non-standard fixed income products in the funds raised before Noah’s transformation have all been replaced by standardized products.
To drive change in customer perception
Investors are naturally volatility-averse. Wealth managers want to do everything they can to keep their investors happy. Madoff once said, “I felt compelled to meet their expectations at any cost, so I began paying old clients’ earnings and principal with new clients’ money.”
Customers’ needs are all correct, but we need to think how to meet their real needs in the correct way. To make the industry change is to provide more investor education to change their perception so that customers and industry practitioners can truly understand the nature of the industry and the real value creation in the industry.
Healthy industry development relies on regulation and self-discipline of industry practitioners. On-going positive incentive comes from long-term value creation for customers. How to encourage wealth managers and asset managers to deliver long-term value to their customers? How to upgrade customer perception to the next level? To understand that investment is not a deposit. Investment is risky. No rigid payment does not mean being irresponsible. We shall focus on the needs and goals of customers and target their pain points. This would require good faith collaboration between wealth managers and asset managers, long-term vision of regulators and perception changes of investors. All of these are essential and for the long term industry development.
To take pursuit of truth and wisdom as a moral duty
The wealth management and asset management industry has three characteristics: firstly, in almost all other industries, product quality is judged largely by the customer’s experience, but in the wealth management and asset management industry, most of the time, most of the customers cannot make such judgment immediately, nor can they judge the service quality. Even the regulators or industry practitioners are unable to judge the quality of another product or service.
Secondly, customer interests are not fully reflected in the pricing structure of products and services in wealth management and asset management. Fund managers are highly paid, oftentimes without consideration of their contribution to the growth of customer wealth. They actually provide very limited services to customers. They charge management fees regardless of whether they make money or lose money for clients.
Thirdly, qualification of the industry practitioners (so-called money managers) varies widely. Industry standards are confusing. Paradoxical and misleading statements can be found everywhere. These money managers are mainly selling non-standard fixed income products. They themselves are actually confused by a lot of products.
Therefore, the industry practitioners in wealth management and asset management shall accept strict regulation, follow high professional ethics, and take the pursuit of truth and wisdom as a moral responsibility. They shall consciously adopt a sense of fiduciary responsibility and take care of every penny of customers as if it is the life savings of their frugal parents.
To follow the trend of digital transformation in wealth management institutions
Standing at the new start, Noah will continue to learn from the best practices. How to transform individual leadership into organizational leadership, how to precisely understand customer needs, how to assess the capabilities of money managers, and how to digitally identify financial products, these are the key considerations of Noah’s transformation.
The wealth management industry has been in existence for over 200 years. For a long time, the operation model of wealth management institutions remained the same. In the last 20 years, especially in recent years, the traditional model has gradually become obsolete. Internet and technological advances have made information more transparent. Digitalization is essential to wealth management institutions.
The disruption in the wealth management industry came from the irresistible digital wave and the rise of young customers. Wealth management institutions have a large and high-quality professional team, which are unmatchable resources beyond the reach of Internet companies. By resorting to digitalization and standardized service process, wealth management institutions can break through the limits of capacities. The key to success is to empower money managers with digitalized and standardized operation and processes 24/7. In the future, wealth management institutions without high-end digital capabilities will not be able to meet customer needs timely.
It will be a huge project to digitize Noah’s 15 years of operation. Noah has the courage and commitment to involve every Noah employee in this process. Noah has recruited Internet professionals to scale up our technology team. Noah will continue to identify and promote more talents and provide them with more opportunities so that technology can better boost our business and build up “Noah intelligence”.
From vintage green-skinned train to modern bullet train
In the next decade, Noah will transfer from a vintage green-skinned train to a modern bullet train. The power system of a green-skinned train is at the locomotive, which also limits the speed of the train, while a modern bullet train has installed power system and braking system on multiple wheel sets. It can keep running even without a driver in the seat.
Noah’s strategic goal is to build an organization without dependence on any individual, to evolve from individual leadership to organizational leadership, and to systematically improve organizational leadership. I used to contribute most of the ideas for Noah’s development, but now it’s time to involve the whole organization. Noah’s future will depend on the organization instead of any individual.
2020 is the best time for Noah to make a change. We’ve been through last year’s disaster, which has turned into a manageable crisis. The crisis didn’t come to us for no reason. Through the crisis, we’ve gained insights, changes and blessings. We’ve built deeper trust with our customers through crisis management. For eight months, we have been interacting with customers and industry peers, listening to their voices, organizing internal discussions and learning from global benchmarks. Noah is clear with its vision and mode of change, what to do and how to do. For the new decade, Noah is bound to change.
We will continue to be customer-centric. We are committed to best motives and best processes. I believe that Noah will become the choice of Chinese people around the world for wealth management. The world will look to China.
SOURCE Noah Listing