Ant Financial, Vanguard Partner on Private Wealth Management in China

The two American and Chinese financial giants are cooperating in a rare opening up of China's financial market to outside institutions.

Belinda Zhou
    Dec 16, 2019 9:20 AM  PT
Ant Financial, Vanguard Partner on Private Wealth Management in China
author: Belinda Zhou   

Chinese fintech company Ant Financial Services Group and Vanguard have struck a deal to launch a joint venture in China.

The JV will offer wealth management services to Chinese individual investors, facilitating investments with a minimum of 800 yuan ($113) and help identify investment objectives, timing and risk preferences, the companies said on Saturday.

Vanguard, a $5.9 trillion Pennsylvania-based asset manager, said in the announcement that the JV has been approved by the China Securities Regulatory Commission.

"This venture marries Vanguard's time-tested investment philosophy and approach with Ant's digital platform and technology to fundamentally change for the better how individuals in China invest," Tim Buckley, the chief executive officer of Vanguard, said in the statement.

Ant Financial, backed by Alibaba Group Holding Ltd. (NYSE: BABA), is one of China's top financial services providers. Its e-wallet Alipay is used by more than 1.2 billion users around the world.

The eye-catching cooperation has been recorded in the online government registry system under Vanguard's name with a starting capital of 20 million yuan ($2.88 million) in June.

"Today, millions of Chinese investors lack access to professional investment advisory services. Through this partnership, we will reduce complexity and significantly lower the threshold for individual investors to access high-quality wealth management advice in China," Peter Zhang, the chief executive officer of the joint venture, said.

The value of all financial institutes' wealth management products in China reached 22.04 trillion in 2018, according to a July 2019 report by Statista.  

Foreign banks have been confronted with strict restrictions in China. Recently, however, the country has made a pledge to open up its markets to foreign financial institutions. Customized private wealth management has traditionally been limited to high-net-worth individuals in China.