As an asset manager, the fund should charge clients a management fee (usually called commission). As for how to collect management fees and according to what standard, although it is only a form, it will have an important impact on the operation of the fund and even the value orientation of fund investors. Because of this, the ongoing reform of the fund commission system has attracted great attention from all walks of life in the market.

EuropeanrouletteplayfreeAt the beginning, China's fund industry basically adopts a fixed rate system, that is, to set a differential commission rate according to the nature of all kinds of funds. In general, the commission rate of equity funds is higher, that of bond and ETF funds is relatively low, and that of money market funds is generally the lowest.

Such a setting has its rationality. Because at the beginning of the operation of the fund, the scale of asset management is generally small and its own strength is limited, so it is necessary to have a relatively fixed source of income to ensure the normal operation and orderly development of the company. In addition, when the medium-and long-term performance of fund products has not been fully reflected, the differentiated fixed commission rate, whether for the internal management of the fund or to stabilize the expectations of fund investors, is more beneficial.

However, with the rapid development of the fund industry, the fluctuation of its performance is becoming more and more obvious. Although many funds still outperform the market in the medium to long term, on the whole, the vast majority of equity funds do not show the ability to traverse bulls and bears. Especially in the past two or three years, the stock market is relatively low, and the performance of funds is generally not ideal.

Because of the implementation of a fixed commission rate, fund holders have to pay a lot of commission in the case of substantial net worth losses, which is obviously unwilling to accept. Fund companies to ensure the harvest of drought and flood, did not create income for investors and still continue to collect commissions, the model of fixed commission rate of the fund began to be questioned.

Under pressure, some fund companies have announced a reduction in the commission ratio since the second half of last year, and the second round of fund commission reform is now under way, which is mainly aimed at the commission rate. It has been estimated that if this round of commission reduction is completed, fund holders will be able to reduce their commission expenses by 38%. Fund holders will of course be happy to see this happen.

However, after the fund company reduces the commission income by more than 1 stroke 3, can it still guarantee the investment intensity in project research, business innovation, risk control and so on? If this aspect is affected, it may have a negative impact on future development.

In addition, although the commission rate has dropped, it has not fundamentally changed the pattern of drought and flood protection for fund companies. Especially in the case of fund losses, investors are very disgusted with this. To solve this problem, the fixed commission rate should be changed to a floating commission rate. The management fee is linked to the income, and the more money the fund holder makes, the higher the commission rate, which can avoid the situation in which the fund company only pursues the scale of asset management while neglecting the investment income. Its interests are really tied up with fund holders.

And the more profitable the fund, the more conditions it has to increase its own construction and enhance the strength of investment and research. After a certain stage of fund development and initial accumulation, it is possible to implement a floating commission system in some varieties (such as stock funds). As a matter of fact, some fund companies proposed this charging model more than a decade ago, but it was not approved. The reason is that the regulators believe that this will lead to the short-term tendency of fund managers in operation and magnify the investment risk.

At that time, some fund products tried the model of "fixed commission rate + performance commission", but it was soon stopped. Perhaps, the conditions were not yet available at that time, and now the new "National Nine articles" has been introduced, and there are many ways to prevent the short-term behavior of fund managers. For fear of risks, they refuse to take the floating commission rate as an option of the fund commission system. There's not enough reason.

The greatest advantage of implementing the floating commission rate is that it can establish a strict positive incentive mechanism to let fund managers out of the artificial work comfort zone and really participate in the market competition through their own creative work. Bring benefits to customers, but also bring profits to enterprises. The mechanism by which everyone shares risks and benefits is truly market-oriented.

It is hoped that the parties concerned will seriously study this commission model, regard it as an important aspect of the commission system reform, and actively explore it, so as to provide better basic support for the high-quality development of domestic asset management business.

(author Gui Haoming)