China's rising affluent cohort, defined by personal incomes between 125,000 and 1 million yuan and investable assets under $1 million, have become more confident and active in managing their wealth. However, long-term financial planning continues to lag behind, according to the latest China Rising Affluent Financial Well-Being Index.
- Financial confidence among China's affluent rises to highest level since 2021.
- Only about half have formal financial plans, with retirement and education planning minimal.
- Low-risk assets and cash dominate portfolios, even for aggressive investors.
What happened
The tenth edition of the China Rising Affluent Financial Well-Being Index recorded a year-on-year increase to 71.99, the highest since 2021. This increase reflects improved investor confidence, better engagement with financial services, wealth management activities, and planning. The study targeted individuals earning between 125,000 and 1 million yuan annually with investable assets below $1 million.
Despite improvements in several dimensions, the planning sub-index remains historically low at 36.21. Only 54.9% of respondents reported having established financial plans, a decline over the past decade. Respondents often view planning as static or unnecessary, with many focusing narrowly on short-term asset growth rather than comprehensive strategies covering retirement or children's education.
Why it matters
This affluent group is increasingly influential within China’s financial sector and will help shape demand for wealth management services as their wealth grows. Their rising confidence in financial markets contrasts with persistent gaps in strategic planning that could hinder long-term financial security.
The dominance of cash and fixed-term deposits, especially among those who consider themselves aggressive investors, indicates a reluctance or lack of access to more diversified financial instruments. This conservatism limits portfolio growth potential and signals a need for expanded advisory services, particularly in mutual funds and other diversified investments.
What to watch next
Financial institutions and advisors should watch how Chinese rising affluent clients adapt their portfolios in response to growing awareness of wealth management benefits. The industry’s response in offering tailored, dynamic financial planning and increasing awareness of diversified products will be critical for market development.
The expansion of pension funds and other forms of long-term capital investing in China’s capital markets is also a key trend to monitor. If these funds increase their market participation and coverage, they could address some of the current planning deficiencies and support deeper engagement in the financial sector.