Scale authenticity verification: Who is the true "Number One" in the buy-side investment advisory market?

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China Economic Journal reporter Sun Ruxiang, Xia Xin, Beijing, Shanghai, Guangzhou reporting

The pilot program for fund advisory services has entered its 7th year, with 60 institutions involved. Who is the “big brother” in this emerging market?

Will the scale data and rankings “self-disclosed” by institutions choose favorable interpretations for themselves, leading to selective disclosures?

What adverse effects will a lack of unified and authoritative statistical standards in the market have on investor decision-making and industry development?

As the “infrastructure” of the buy-side advisory market, which entities should co-build unified statistical standards and definitions? What feasible paths for implementation exist?

These questions not only trouble investors but also concern advisory practitioners. More importantly, behind the dispute over scale definitions lies a fundamental question of industry value orientation: is it a scale game of “capital aggregation,” or a true reflection of the “health of client accounts”?

The inconsistency in scale statistics is not only a technical problem of data comparability but also relates to whether the buy-side advisory’s original intention of “customer-centricity” can truly be realized.

In light of the above questions, reporters from the “China Economic Journal” conducted in-depth interviews with several industry experts and institutional leaders, aiming to clarify the diverse definitions of buy-side advisory scale statistics, analyze the business logic behind ranking differences, and explore feasible paths for unified accounting standards.

What are the differences in the scale definitions of different advisory firms?

When “scale” becomes the focus of the buy-side advisory market, the statistical definitions presented in the market have yet to be unified.

Tian Lihui, director of the Financial Development Research Institute at Nankai University, stated that there are at least three mainstream definitions in the current market: the narrowest “assets under management for fund advisory services,” the broader “contracted asset scale for buy-side advisory,” and the widest “wealth management client asset scale.”

“In industry discussions about ‘buy-side advisory scale,’ there are at least three common definitions, but these definitions do not measure the same thing, so it is necessary to disclose both ‘definition + time point’ for comparability,” said Luo Ronghua, director of the China Financial Research Institute at Southwest University of Finance and Economics.

Luo Ronghua believes that among the three definitions, the service asset scale/advisory retention scale refers to the assets that are actually allocated, continually tracked, adjusted, and documented under the advisory strategy framework. This definition is closer to “truly managed” and best reflects the management responsibilities that advisory institutions bear.

“The covered asset/reachable asset scale is the easiest to misinterpret. Because once a client completes a certain agreement or binding, their assets, even if they have not purchased an advisory strategy or been included in managed portfolios, may still be counted,” Luo Ronghua stated. This definition is more like a “potential service pool” and should not be equated directly with the real advisory scale.

In between “managed” and “covered” is the contracted asset scale, which refers to the assets included in the advisory service scope after the client signs the advisory agreement. Different institutions may handle “whether strategies are actually executed after signing, and how unexecuted parts are dealt with” differently, making comparability weaker than “managed/retained.”

Additionally, according to Luo Ronghua, some advisory firms may use the number of clients served, especially the number of high-net-worth clients, to represent their scale, as the number of clients can illustrate their market coverage, service breadth, and market position.

From the perspective of regulatory authorities, both Tian Lihui and Luo Ronghua stated that regulatory agencies primarily use the “service asset scale” definition for fund advisory services.

For example, the China Securities Regulatory Commission’s official website has disclosed that as of July 2021, the assets under management for fund advisory services exceeded 50 billion yuan, serving approximately 2.5 million investors; and as of March 2023, the scale of assets under fund advisory services was 146.4 billion yuan, with a total of 5.24 million clients.

It is understood that in 2021, the Asset Management Association of China issued the “Public Fund Investment Advisory Business Data Reporting Interface Specification.” Among these, the advisory scale is calculated based on “contracted clients’ contracted fund advisory service amounts,” that is, based on the asset scale corresponding to fund trading accounts established for receiving advisory services, including both managed and non-managed scales.

Will institutions selectively disclose exaggerated scales?

Although the overall statistical definition of advisory scale from the regulatory perspective is clear and explicit, due to the lack of unified disclosure standards, some institutions have been known to make “self-serving” disclosures regarding their advisory scale in the market.

“The current mainstream core definitions and regulatory definitions in the industry focus on the entrusted management of public fund portfolios and do not include non-portfolio distribution scales or total client account funds. However, there are indeed discrepancies in the definitions used by different institutions when disclosing their scales,” said Tian Xuan, a distinguished professor at Peking University. Some institutions count idle funds in clients’ fully entrusted accounts not included in advisory portfolios, or accounts where only advisory suggestions were provided without actual adjustments, into AUM (assets under management), leading to statistical distortions. Other institutions package historical trading data of non-contracted clients into “potential AUM,” blurring the boundaries of actual service.

Tian Lihui also believes that there is indeed a phenomenon of selective use of definitions during disclosures by different institutions. For example, mixing traditional distribution or fully entrusted asset management scales into advisory scales can exaggerate actual service boundaries to some extent.

“In the rapid expansion of the industry, there may be cases where different institutions do not use the same definitions in their public disclosures, even exaggerating service scales. This mainly results from the confusion between advisory scales and distribution scales; some institutions may package traditional distribution holdings as advisory service scales in their external promotions,” emphasized Xiao Wen, chairman of Yingmi Fund, stating that true buy-side advisory requires clear advisory service agreements and fee mechanisms, rather than merely selling products.

Luo Ronghua noted that the risk of selective definition use or exaggerated scales does indeed exist. If institutions only disclose “covered assets/contracted assets” externally, without simultaneously disclosing “real managed/retained scales” and execution ratios, the outside world may overestimate the extent of their advisory implementations. Therefore, a more prudent disclosure method should at least provide two sets of figures: real managed/retained scales; the proportion of contracted assets that actually executed strategies, and clarify statistical methods and time points.

“The scale statistics of buy-side advisory should return to the essence of service. The core reason for the current chaotic industry definitions is equating product scales with service scales, yet the two are fundamentally different: product scales are ‘capital aggregation,’ while service scales reflect ‘professional capability,’” stated Xu Haining, founder, chairman, and CEO of Shanghai Zhihui Technology, emphasizing that true buy-side advisory scale should focus on “fully entrusted, professional services, and client payments,” rather than simple capital accumulation.

According to relevant data obtained by the “China Economic Journal,” as of the end of 2024, Yingmi Fund’s existing scale is 39.858 billion yuan, and Ant Advisory is 27.3 billion yuan, ranking first and second, respectively; among securities firms, the top ranks are Huatai Securities (18.079 billion yuan), CICC Wealth (17.376 billion yuan), and Dongfang Securities (15.371 billion yuan); among public fund systems, the top is Southern Fund (8.79 billion yuan).

Additionally, according to Yingmi Fund data, by the end of 2025, its advisory scale is expected to exceed 51 billion yuan. Huatai Securities’ mid-2025 report shows that as of the end of June 2025, the scale of fund advisory business was 21.037 billion yuan.

From mid-2025 to early 2026, several securities firms disclosed that their advisory retention scales exceeded one hundred billion yuan and even reached several hundred billion yuan.

Some professionals analyzed that the “hundred billion scale” figures contain elements of “distribution” and may have replaced “retained balance” with “cumulative balance.”

“‘Retained balance’ refers to the current remaining scale of clients who still choose your services; ‘cumulative balance’ adds up the balances from previous years and presents this figure as ‘retained balance,’ which naturally inflates the scale.” The aforementioned professionals revealed that, in fact, according to regulatory reporting requirements, the total market advisory business scale is about 200 billion yuan.

So, the question arises: Are regulatory authorities completely unaware of these “inflated” data in the market? Why has there been no intervention?

“Given the sensitivity of regulatory authorities, they should not be unaware; regarding why there hasn’t been intervention or a statement, it may be to protect this challenging industry. The difficulties of transformation are well-known, and institutions taking steps to transform is better than not doing so. Encouraging more institutions to join the transformation is ultimately a good thing for the industry,” the professionals speculated.

What are the business logic differences behind ranking discrepancies?

Due to the existence of different definitions and selective disclosures by some institutions, there are significant differences in the scale rankings of leading fund advisory institutions. More notably, the differences in rankings reflect the disparities in the business logic of different types of institutions.

“The significant differences in rankings mirror the differences in business models,” Tian Lihui noted, stating that if ranked by a narrow definition of fund advisory scale, some internet third-party platforms focusing on the “advisory service fee” model and strategy neutrality lead in scale. If ranked by the broader definition of contracted asset scale, the top securities firms with strong overall capabilities and large client bases rank in the forefront.

“This reflects that securities firms excel in comprehensive asset allocation, third parties specialize in online services and neutral strategies, while banks and public funds are still exploring optimal paths that combine their traditional advantages,” Tian Lihui stated.

Tian Xuan believes that if only the actual entrusted advisory portfolio AUM of contracted clients is counted, securities firms often rank high due to their trading system advantages and high-net-worth client bases. If “assets covered by advisory suggestions” are included, banks leap to first place due to their vast retail client base and accumulated funds. Public funds generally rank lower due to channel dependencies and non-full discretionary attributes. Third parties perform outstandingly under the “active adjustment client AUM” definition.

“This ranking difference fundamentally reflects the essential distinctions in business models among various types of institutions,” Tian Xuan remarked.

“Most ordinary investors’ wealth management can ultimately adopt a fully entrusted model. This model can more completely implement the asset allocation concept, reduce behavioral biases caused by frequent client interventions, help form standardized portfolio management and unified risk control systems, thus enhancing long-term execution efficiency and performance stability; at the same time, it is more aligned with the client-centric logic of buy-side advisory,” said Hu Conghui, deputy dean of the School of Economics and Business Administration at Beijing Normal University, adding that the fully entrusted model is more suitable for client groups with mature long-term wealth management awareness and often needs to form a transition and supplement with advisory services at the current stage.

“If advisory services are deeply tied to proprietary product sales, scale statistics are more likely to be ‘inflated,’ but it also raises external doubts about the independence of the buy side,” Luo Ronghua stated, indicating that the more composite and emphasized continuous adjustment records are kept, the closer it is to “truly managed”; conversely, if the focus is on consultation/advice, the scale may not be large, but that does not mean the service lacks value.

Xiao Wen stated that according to the “total scale of fund advisory contracts” definition, securities firms, benefiting from high-net-worth clients and offline team advantages, lead in total amounts; third parties are rapidly catching up with their inclusive and standardized advisory, with the most prominent growth rates. According to the “fully entrusted/separate account scale” definition, securities firms lead, while third parties and public funds are significantly smaller. The fully entrusted model has high thresholds and is inclined toward high-net-worth customization, which are traditional advantageous areas for securities firms and banks, while third parties do not primarily focus on high-threshold separate accounts. According to the “number of clients served” definition, third parties dominate the long-tail retail market with their low thresholds, fully online presence, and strong companionship, supporting the industry’s foundational base with client numbers.

In Xiao Wen’s view, the differences in statistical data essentially result from the different emphases of various types of institutions on the “investment” and “advisory” balance. Securities firms tend to promote management-type advisory, and currently, this type of asset constitutes a very high proportion of the advisory scale in leading securities firms; their core logic is to enhance risk control and trading agility by authorizing clients to make adjustment decisions. Public fund advisory has a strong asset-side imprint, and in portfolio construction, some public fund advisors may exhibit a preference for allocating their proprietary products. Third-party institutions are driven by service, adhering to an “open architecture” and a “30% advisory and 70% management” model, with scale growth relying more on refined operations on the liability side.

“The differences in rankings reflect ‘differences in business logic,’” Xu Haining believes. Third-party institutions use buy-side advisory as their only business model, building resource matches around client needs, where client experience determines retention scale, and advisory services determine client experience, creating a smooth positive cycle. Among traditional financial institutions, leading securities firms with abundant license resources are less sensitive, while their existing burdens lead to insufficient transformation motivation; conversely, medium-sized securities firms are more proactive, often outperforming some large firms.

What disadvantages arise from ambiguous statistical definitions?

Interviewees unanimously believe that the ambiguity of advisory scale statistical definitions and unclear disclosure standards will bring adverse effects on investors and the development of the industry.

“Investors may mistakenly interpret ‘covered assets/contracted assets’ as ‘real managed scale,’ thereby misjudging the capacity of institutions and subsequently choosing advisory firms that do not fit their needs,” Luo Ronghua stated.

Xu Haining also believes that chaotic standards may prevent investors from accurately comparing the service capabilities of different institutions, easily misled by “inflated scales,” making it difficult to make rational choices, and even leading to a trust crisis in the advisory industry due to mismatched scales and actual services.

For the advisory industry itself, Tian Lihui indicated that ambiguous definitions could lead the industry into a “scale number game,” rather than focusing on improving “client account health” in a distorted competition.

“Some institutions, in order to enhance market visibility and competitiveness, may engage in unfair competition by artificially inflating scales or exaggerating performance, which would lead to ‘bad money driving out good money,’ harming the long-term healthy development of the industry,” Tian Xuan remarked.

“Without a unified standard, the industry is likely to fall into distorted competition of ‘comparing definitions and inflating figures,’ with some institutions inflating superficial scales by adjusting statistical definitions while neglecting core indicators such as client profitability, long-term holdings, and service quality. This will force institutions focused on pure buy-side services to passively follow suit, completely distorting the industry’s value orientation,” Xiao Wen stated.

In Xiao Wen’s view, unifying the statistical definitions of advisory scales is a necessary step for the industry to transition from extensive expansion to standardized maturity, and is a fundamental issue that must be resolved for the industry to move to a high-quality stage. “Only when statistical standards are transparent can the industry shift from ‘who runs faster’ to ‘who runs more steadily,’ truly bridging the ‘last mile’ from fund product returns to client account returns,” Xiao Wen emphasized.

How can information disclosure move toward unification and transparency?

Xiao Wen suggested that the CSRC, industry associations, and advisory institutions should each play their respective roles and collaborate. The CSRC, as the top-level rule-maker and supervisor, should establish the compliance baseline for statistics and enforce mandatory requirements; the China Fund Industry Association, as the executor of standards, should formulate detailed accounting rules, data reporting specifications, and unified disclosure templates; and licensed advisory institutions should strictly report data according to unified definitions and regulate their promotions.

In terms of practical implementation pathways, Xiao Wen stated that first, there should be a clear distinction between pure fund advisory existing scales, high-net-worth fully entrusted separate account scales, and traditional fund distribution retention scales, fundamentally eliminating “data mixing and inflated scales.” It should be clearly defined what constitutes “advisory service assets,” with only assets corresponding to fund trading accounts established for receiving advisory services under signed advisory service agreements counted in the pure buy-side advisory scale, distinguishing it from traditional fund sales.

Secondly, unified accounting rules should be established to eliminate scale inflation. The core accounting principles should be clarified: only include asset management scales for contracted clients, excluding product flow scales; all market selections and allocations of proprietary products should be executed under the same definitions and standards.

Finally, an official unified disclosure platform should be established. Xiao Wen proposed that industry associations create a dedicated section for disclosing advisory data, where institutions periodically and truthfully disclose, ensuring that scales are synchronized with client numbers, average holding durations, and the proportion of client profitability, linking scale with service quality.

Tian Lihui also believes that establishing unified standards requires collaboration among regulators, industry associations, and leading institutions. The specific path could be divided into three steps: the industry association should take the lead, clearly defining and publishing accounting guidelines based on the core elements of “client authorization—advisory services—continuous management.” Unified definitions should be used for “fund advisory scale” in regulatory frameworks such as securities firm classification evaluations to provide incentives. Leading institutions should be encouraged to disclose according to new definitions while simultaneously making public client numbers, profitability ratios, and other quality indicators, pushing the entire industry to follow suit through market selection, ultimately achieving a transformation from “scale orientation” to “value orientation.”

“It requires the leadership of regulatory authorities, collaboration with industry associations, and participation from institutions to form a closed loop of ‘top-level design—standard formulation—implementation—supervision and assessment,’” Xu Haining stated, suggesting that the statistical boundaries of buy-side advisory scales should be clearly defined, excluding funds that are not fully entrusted or professionally managed. Additionally, institutions should actively practice the principle of “honest disclosure,” avoiding exaggeration or misleading statements, and jointly maintain the industry’s credibility.

Luo Ronghua proposed establishing a framework of “three-tier definitions + mandatory disclosure items”: the first tier is the must-disclose core definition, namely real managed/retained scale. It should be clear which assets are included, whether strategy execution is required, and whether adjustment records are required. The second tier consists of auxiliary definitions that may be disclosed but need to be accompanied by supporting disclosures, such as the proportion of “actual executing strategy assets” when disclosing contracted assets. The third tier consists of marketing definitions that may allow the disclosure of covered assets/reachable assets but must clarify that “it does not equate to managed scale.”

In this structure, regulators are responsible for clarifying the baseline, especially the must-disclose core definitions; industry associations coordinate various institutions to promote the establishment of widely accepted scale statistical indicators; and advisory institutions should timely and accurately disclose relevant data.

“Moreover, to ensure the effective implementation of standards, two supporting systems should be established: unified auditing/sampling rules to prevent unexecuted strategy assets from being counted in ‘managed’; and a unified disclosure timing and frequency to avoid selectively disclosing ‘the most favorable day,’” Luo Ronghua stated.

Tian Xuan suggested that regulatory authorities organize industry experts, institutional representatives, etc., to jointly research and formulate the “Buy-side Advisory Institutions Scale Statistical Norms,” clearly defining AUM statistical boundaries, calculation timing, valuation methods, and principles of client asset ownership. Additionally, a unified information disclosure platform should be established, requiring all institutions to periodically upload audited scale data to the platform for disclosure. Furthermore, there should be increased supervision and inspection of buy-side advisory institutions’ scale statistics and information disclosure practices, with serious consequences for any violations found.

Xiao Wen stated that regulators are currently strengthening relevant norms. The “Guidelines for Publicly Raised Securities Investment Fund Performance Comparison Standards” published by the CSRC in January 2026, which will take effect in March, aims to guide the industry in establishing unified and transparent evaluation standards to prevent misleading statements.

Looking toward the future of the advisory industry, Xiao Wen believes that client re-investment rates, average holding durations, and other indicators will become more important quality metrics than simple scale rankings. In the future, the decisive factors in scale competition will focus on who can effectively exercise good “management-type” authorization, efficiently converting product net value growth into actual returns for client accounts.

Xu Haining emphasized that buy-side advisory is an important and even strategic lever for deepening capital market reforms. “The true ‘big brother’ should not be the largest institution by scale, but the one providing the best service and most recognized by clients. Ultimately, industry competition will return to the essence of service.”