A stand offering information about the establishment of the China Securities Investment Funds Association at an exhibition in Beijing on May 17. The country's first self-regulating organization for fund management institutions was inaugurated on June 6, 2012. [Photo/China Daily]

China needs to develop a strong wealth management industry by adjusting the financing structure and improving the business model of fund companies, the country's top securities regulator said on Thursday.

If China can shunt half of the more than 80 trillion yuan ($6.3 trillion) in bank deposits into the wealth management industry, "the scale will be significantly considerable", said Guo Shuqing, chairman of the China Securities Regulatory Commission.

He described a blueprint for the "sunrise industry" at the opening ceremony of the China Securities Investment Fund Association, the country's first self-regulatory organization especially for fund management institutions.

Sun Jie, formerly a CSRC official in charge of regulating the fund business, was elected as chairman of the new association.

China's industrial restructuring calls for the rapid development of professional wealth management services to pool private funds and channel them into the "real economy", Guo said. "Diversified financing methods can accelerate technological innovation and boost the emerging cultural industry."

Guo encouraged private investors to entrust more funds to wealth management companies and seek advice from professional institutions.

However, some investors in publicly offered funds have been complaining about losses.

Wu Chen, a 27-year-old office employee of a German company in Beijing, said that she lost 25 percent of her fund investments last year amid a gloomy A-share market.

"I trust fund managers even less since their income remains high while (investors') assets are shrinking," Wu said.

The problem is that China lacks investment companies with a good reputation, Guo said.

"Fund management companies should speed up their transformation into the business of providing qualified wealth management services by being customer-centric," he said.

At the end of last year, the net asset value of China's securities investment funds was 2.19 trillion yuan, while the value of banks' wealth investment products was 4.57 trillion yuan, together with 4.8 trillion yuan in trust assets and 6 trillion yuan in insurance assets, according to the CSRC.

The total assets of venture capital and private equity firms reached 4.77 trillion yuan at the end of last year.

There is huge potential to develop a comprehensive wealth management sector, as individual investors and companies seek higher returns on assets, analysts said.

From 2001 to last year, the average annual return on mainland shares was 7.8 percent. It was 6.7 percent for corporate bonds and 3.6 percent for treasury bonds, according to the CSRC chairman.

"The CSRC is focusing on the revision of the securities investment fund laws and regulations to better supervise fund managers and protect investors' interests," he added.

chenjia1@chinadaily.com.cn