A major event in the financial circle is now in the countdown stage. Leading institutions are all gearing up to busy themselves with application submissions, while some small and medium-sized companies are caught in a difficult situation. Industry insiders remark with emotion that applying for a license is easy, but competing to acquire customers is far more challenging.

The expansion of fund investment advisory licenses has entered the final sprint stage, with leading public funds actively submitting applications to prepare for the business

As the application deadline for fund investment advisory licenses at the end of August is approaching, the new round of expansion of fund investment advisory has entered the sprint stage. On the one hand, leading public funds are gearing up to submit applications and seize business opportunities, while on the other hand, some small and medium-sized fund companies are "willing but unable to do so". System construction, talent reserve, customer acquisition cost and long-term investment have become realistic challenges facing institutions.

Since the first batch of pilots in 2019, fund investment advisory has gone through nearly seven years of exploration period. With the regulator promoting the transformation of pilots to regular operations, fund investment advisory is gradually shifting from "product-oriented" to "service-oriented". However, behind the new round of expansion, commercial challenges such as "who will pay, who will acquire customers, and who has the incentive to provide continuous services" remain to be solved.

Leading public funds are gearing up for application submission

The fund investment advisory pilot has ushered in expansion again. According to the current work pace of the regulatory authorities, it is expected that all institutions will submit application materials intensively before the end of August. If the review goes smoothly, a new batch of licensed institutions is expected to be obtained within the year.

Reporters learned from the industry that about 40 institutions are currently preparing for the application of fund investment advisory licenses, most of which are securities firms. In terms of fund companies, large fund companies and foreign-funded institutions are the main participants.

"This time it is basically an invitation-based system. Local securities regulatory bureaus will ask fund companies in their jurisdictions in daily communication if they are interested. If they are interested, relevant materials will be provided to the companies, and the companies will prepare the materials for application," said the head of the product department of a large Shanghai-based fund company. The company has entered the application stage for the investment advisory business pilot, and is currently concentrating on the preparation of application materials. Among them, core elements such as on-site inspection filing materials, construction of investment advisory systems and supporting institutional systems have been advanced simultaneously. The project is led by the product department, with the marketing planning department cooperating throughout the whole process to ensure the efficient and orderly development of the application work.

According to a person from a foreign-funded public fund in Shanghai, the preparation of application materials at this stage is quite heavy, and a lot of content needs to be prepared, including Q&A documents and relevant supporting systems. The regulator has very detailed requirements. This batch of applications requires materials to be submitted before the end of August, followed by waiting for the regulator's notice.

"Our company is currently applying, and the materials are being prepared, led by the product department, and the e-commerce department may be responsible for the promotion and operation in the follow-up," pointed out a person from the marketing department of a large Beijing-based fund company. Leading fund companies need to be "large and comprehensive" in business layout. Just like active ETFs, if there is no relevant business foundation before, once new products and new policies come out, they may not be able to apply in the first batch. In the future, once the policy changes, having this license in hand will make the company far less passive.

"We are already preparing the materials. The company's management attaches great importance to this application and has some policy expectations for the future of fund investment advisory. For example, in the future, fund investment advisory will be included in the policy system such as personal pension. In addition to the exclusive share class for fund investment advisory, there may be other policy supports in the follow-up. Innovative business itself has strategic value, and we can't wait until the policy is actually implemented to do it. Now some innovative businesses that seem not to make profits in the short term are still being competed for, because they may have strategic value in the future," said the head of the brand department of a large South China-based fund company.

Some small and medium-sized fund companies are "willing but unable to do so"

Reporters learned that some small and medium-sized fund companies lack motivation to apply for fund investment advisory licenses, or are "willing but unable to do so".

A person from the product department of a medium-sized public fund in Shenzhen admitted frankly that the motivation of securities firms and fund companies to carry out fund investment advisory business is different. According to the new version of securities firm classification, the regulator includes the scale of fund investment advisory as an added score indicator, with a maximum of 1 point, while fund companies have no such added score in this regard, which is the core difference.

"If a fund company wants to carry out this business, it needs to invest a lot of resources. For example, if the system is fully self-developed, the development cost may reach tens of millions of yuan; if it relies on third-party platforms such as Yiman Platform for cooperation in the initial stage, and transplants its own strategies to other platforms, the system cost can be reduced. In addition, according to the experience of peers that already have fund investment advisory business, this business needs to be equipped with at least 5 people, including positions in investment research, trading, operation and investment advisory, and the labor cost of this part is at least several million yuan. The problem is that this business is difficult to achieve rapid growth in volume in the short term, and there is a long cycle between input and output," the above person said.

According to a rough calculation by the head of a product department in Shanghai, if it is a pure equity fund investment advisory business, it needs about 4 billion yuan of equity product investment advisory AUM; calculated at an investment advisory fee rate of 0.5%, the system and personnel costs can break even and reach a good health level. He pointed out that at present, the companies that can reach this scale are mainly leading companies. Some fund companies that already have a wealth business system generally perform well, separating the wealth business, e-commerce business and fund investment advisory and operating them together.

"The shortage of investment advisory talents is also one of the difficulties. In addition to transferring from the company's investment research team, in the past, financial influencers were to a certain extent the most suitable candidates for fund investment advisory. But now, if financial influencers want to carry out related business, they need to join a licensed institution and are subject to strict compliance restrictions. Moreover, even if financial influencers join the institution, they are more inclined to choose securities firms rather than fund companies. The current compliance requirements for public funds are relatively strict, which is not suitable for financial influencers to give full play to their strengths," said an investment research person from a small public fund in Beijing.

A deputy general manager of a small and medium-sized fund company in Shanghai revealed to reporters that for small and medium-sized companies where the general manager and chairman usually only have a three-year term, if this business may take 10 or 20 years to generate returns, the management may not have enough motivation to carry it out. But for securities firms, the reporting process is relatively simple, because carrying out this business can add points to the classification evaluation, and securities firms have business departments, which naturally have offline customer acquisition channels, so there is no need for repeated reporting and demonstration to carry out fund investment advisory business.

The road of fund investment advisory is long and full of challenges

Starting from the first batch of 5 institutional pilots in 2019, now 60 institutions have entered the market, with a management scale of about 450 billion yuan, serving nearly 10 million customers in total. Fund investment advisory has gone through nearly seven years of exploration period. In the process of developing investment advisory business, fund companies are also facing many pressures. Many of the fund companies that obtained the first batch of fund investment advisory pilots have not achieved obvious business progress.

The head of the investment advisory business of a South China-based fund company said that first of all, a big problem for fund companies to carry out fund investment advisory is how to acquire customers at low cost. Securities firms have business departments that can directly reach customers, and securities firms are full-license institutions that can sell stocks, wealth management products, funds, insurance, etc. Securities firms have their own channels, business outlets and customer managers, who can expand business through customer managers, package investment advisory services into strategic products, sell them to their own customers offline, and then let customer managers get corresponding commissions. The problem for fund companies is that they do not hold the customers themselves. Most of the products of fund companies are sold through consignment platforms, and the direct sales AUM is also relatively low, so the customer acquisition cost is very high, and it is even difficult to directly reach their own customers.

Secondly, fund investment advisory itself is still a business with compressed fees. On December 31, 2025, the China Securities Regulatory Commission (CSRC) issued the Provisions on the Administration of Publicly Offered Securities Investment Fund Sales Fees, which comprehensively standardizes the fund sales fee system, and specifically clarifies that fund investment advisory business shall not charge customer maintenance fees (trailing commissions/management fee rebates). This provision came into effect on January 1, 2026, and a 12-month transition period is set, requiring all fund sales institutions to complete the rectification before December 31, 2026. The fund investment advisory business, which already has low income, is facing new difficulties again.

In addition, fund investment advisory is a long-tail business, which requires a lot of energy to maintain customers in the follow-up, and needs to continuously provide investment accompanying services to customers.

A senior public fund person in Shanghai admitted frankly that fund investment advisory is essentially a business of value to customers. It can help investors reduce the behavior of "chasing ups and downs" and extend their holding period through professional asset allocation and continuous accompanying services. The problem is that the current entire business model has not well solved the problems of "who will pay, who will acquire customers, and who has the incentive to provide continuous services".

"At present, the service penetration of fund investment advisory is still relatively weak. From the perspective of friends and practitioners around, there are not many people who have actually purchased fund investment advisory products, and ordinary people have relatively few channels to access fund investment advisory. Therefore, from the perspective of actual penetration rate, fund investment advisory is still in a relatively early stage," said a person from the marketing department of a large Shanghai-based public fund.

In addition, after nearly seven years of pilot implementation, fund investment advisory is gradually improving in products, business and customer service forms. In the long run, the industry still has a long way to go in cultivating user awareness and improving customer service capabilities.

China Universal Wealth pointed out that on the one hand, domestic investors are accustomed to the model of "free services + product price difference", and their acceptance of "paying for professional services" still needs to be improved; on the other hand, more institutions need to persist in carrying out investor education, to help investors understand that "good investment advisory is not only about selecting the right products, but also about helping you hold the products and manage them well".

Industry insiders said: "Fund investment advisory is a difficult but correct thing to do"

In recent years, fund investment advisory has been ushering in changes in institutional policies and market demand.

At the institutional policy level, in February last year, the CSRC for the first time clearly proposed to "promote the transformation of fund investment advisory business from pilot to regular operation"; in April this year, the CSRC issued the 2026 annual legislative work plan, including the Administrative Measures for Securities and Fund Investment Advisory Business as a key research legislative project to be introduced at an appropriate time, providing institutional guarantee for the standardized and professional development of the fund investment advisory industry.

In June this year, Wu Qing, Chairman of the CSRC, proposed at the 4th Member Representative Conference of the Asset Management Association of China that it is necessary to accelerate the transformation of buyer's investment advisory with investor return as the core orientation, and effectively improve the service satisfaction and investment gain of investors. At the Lujiazui Forum, Wu Qing further clarified that licensed foreign-funded institutions are encouraged to participate in fund investment advisory business to expand the pilot scope of the industry.

China Universal Wealth said that with the implementation of the regular operation of the fund investment advisory industry, more and more institutions have obtained business qualifications, and fund investment advisory is expected to further expand its development space. In terms of market demand, with the continuous decline of deposit interest rates and the full net value transformation of bank wealth management, it has become a general trend for investors to carry out wealth management through professional institutions. Investors' demand will also upgrade from "buying products" to "buying services", and fund investment advisory that can provide users with account diagnosis, asset allocation and continuous account management services is expected to become one of the main ways for investors to carry out wealth management.

"Fund investment advisory is a difficult but correct thing to do. It is an extension of investor education and accompanying services, and also a kind of brand building. Fund companies do not have many channels to carry out investor accompanying services at present. With the fund investment advisory business, the company will be motivated to build a complete investor accompanying service system," said a person from the marketing department of a large Shanghai-based public fund.

TX Investment Consulting Fund Evaluation Center believes that the development logic of fund investment advisory is consistent, always oriented to buyer's investment advisory and investor return. Of course, this development process advances gradually with the maturity of the market. At present, the fund investment advisory business is gradually moving from the early product-oriented stage to the service-oriented stage, and the value of accompanying services is gradually emerging.

This article is from the WeChat official account "China Fund News" (ID: chinafundnews), author: CAO Wenjing, published with authorization from 36Kr.