Wealth Management Trust Observation: Moving from "Tool-Oriented Thinking" to "System-Oriented Thinking"

How can AI · Wealth Management Trust achieve a deep evolution from tool to system?

Reporter Yang Mengxue, 21st Century Business Herald

In 2013, China’s first family trust quietly came into being, marking the beginning of practical trust services in wealth management. After more than a decade of development, this niche tool for high-net-worth individuals’ wealth transfer has been incorporated into the new three-category regulation as the largest asset service trust category. A complete system covering family trusts, household service trusts, insurance trusts, special needs trusts, and other seven business types is gradually taking shape.

Under the industry transformation, wealth management is becoming a key focus for trust companies competing in the market. Data from the China Trust Industry Association shows that as of the end of June 2025, wealth management service trusts totaled 4.37 trillion yuan, making it the largest among all asset service trusts.

Expert trustee Zhou Xiaoming of the China Trust Industry Association mentioned in the 2025 mid-year development review that, in the long term, institutional constraints limiting the development of asset service trusts will gradually be resolved. Wealth management service trusts, especially, will see better and faster growth, potentially forming valuable business models and becoming engines of growth with both scale and performance contributions.

The establishment of the system has driven a profound evolution in the industry from “tool thinking” to “system thinking,” turning wealth management service trusts into customized legal frameworks deeply embedded in life stages, family relationships, and special needs.

From asset allocation to relationship management, from exclusive high-net-worth services to inclusive approaches, from private benefits to public welfare, wealth management service trusts are entering more family scenarios with unprecedented breadth and warmth. However, as the system benefits continue to be released, practical challenges such as legal bottlenecks and service capability disparities are also emerging.

Wealth management service trusts officially appeared as a formal category after the 2023 new three-category regulation, but core businesses like family trusts and insurance trusts had already been widely practiced beforehand.

The first domestic family trust was established in 2013, followed by many trust institutions entering the field, and exploration of insurance trusts and other services began. These businesses essentially provide comprehensive wealth protection, inheritance, and management services for high-net-worth clients, forming the embryonic structure of wealth management service trusts, and later becoming core business types in the new three-category regulation.

In 2018, the former China Banking and Insurance Regulatory Commission issued the “Notice on Strengthening the Supervision of Trusts During the Transition Period for Asset Management Business” (the “37th Document”), which officially defined family trusts, clarifying their purpose of “wealth protection, inheritance, and management,” and distinguishing them from trust products solely aimed at preservation and appreciation. This laid the foundation for subsequent standardized development.

In 2023, the “Notice on Regulating the Classification of Trust Business of Trust Companies” was officially issued and implemented, making asset service trusts the top category in the three-category system, with wealth management service trusts listed as the largest under asset service trusts.

Thus, wealth management service trusts have gradually formed a relatively complete business system. Under this system, based on service content and target, there are seven types: family trusts, household service trusts, insurance trusts, special needs trusts, will trusts, other personal wealth management trusts, and corporate and non-corporate organizational wealth management trusts.

Dr. Zuo Junchao, responsible for the founding of Yuan Trust’s elderly care-related business, believes that the principles of these wealth management service trusts related to families and individuals are similar: they aim to meet family needs and solve family problems through designing dedicated trust solutions. “Family trusts, household service trusts, and other personal wealth management trusts are mainly distinguished by the scale of entrusted assets, with different investment scopes and functions. Types like insurance trusts, special needs trusts, and will trusts focus on different applicable scenarios,” he explains.

The specific business classification requires certain asset thresholds: family trusts should have a minimum initial trust property of 10 million yuan; household service trusts, 1 million yuan; other personal wealth management trusts, 6 million yuan; and trusts for legal and non-legal entities, at least 10 million yuan in entrusted assets.

“Therefore, wealth management service trusts related to families and individuals are essentially family planning using trust laws and financial trust systems. The main difference lies in personalized service content tailored to diverse client groups, asset types and quantities, various needs, and different scenarios,” says Zuo.

“Trusts, as a natural tool for wealth management, can realize multiple functions such as property rights confirmation, risk isolation, cross-generational inheritance, and third-party distribution, serving the wealth transfer needs of families, clans, and even society. Through trust arrangements, clients’ long-term capital planning, management, and inheritance needs can be met,” states a senior official from Shanghai Trust.

Reviewing the evolution of wealth management service trusts, these products are shifting from standardization to scenario-based customization, from “tool thinking” to “system thinking.” This transformation is driven by changing client demands, making trusts no longer uniform financial products but deeply embedded legal frameworks tailored to life stages, family relationships, and special needs.

Liao Jiayu, Chief Operating Officer of Hong Kong Inheritance Trust, notes that over the past decade, family inheritance demands have become exponentially more complex. “Early arrangements were often scattered and secretive. Now, leading families aim to establish transparent, systematic inheritance systems with formal governance rules.”

“Asset allocation strategies are becoming more ‘personalized,’ requiring different trusts for different family members, tailored to human development. Additionally, the rise of charitable trusts is notable, essentially transforming part of financial capital into investments in ‘family human capital and social capital,’” Liao explains.

A senior executive from Shanghai Trust states that high-net-worth families’ wealth management needs are undergoing profound changes. On one hand, there is a clear demand for long-term preservation and smooth intergenerational transfer of family wealth; on the other hand, as China’s high-net-worth population’s global asset allocation needs grow, cross-border wealth management and inheritance have become core competitive areas.

Based on current market practices and industry insights, wealth management service trusts are also evolving from tool-based to system-based thinking in four key ways.

First, from asset allocation to relationship management. The rise of dual trusteeships and family co-governance models indicates a shift from “how to manage money” to “how to manage relationships”—marital, parent-child, and intergenerational relationships are being institutionalized and standardized through trust structures.

Second, from standardized products to embedded services. Whether it’s third-party payment mechanisms in elderly trusts or dual supervisor models in special needs trusts, trusts are deeply integrated into specific life scenarios, becoming “system interfaces” connecting finance, law, healthcare, and public welfare.

Third, from exclusive high-net-worth services to inclusive approaches. The new regulation lowered the threshold for household service trusts to 1 million yuan, and in practice, thresholds for special needs trusts have dropped to 300,000 yuan, breaking the traditional image of trusts serving only ultra-high-net-worth clients. With pilot programs like real estate trust registration, ordinary families owning property can also use trusts for wealth protection and inheritance—an important step toward broader accessibility.

Fourth, the integration of charitable trusts with financial management trusts reflects a trend from private benefits to public welfare continuation. For example, combining charitable and family trusts allows private wealth to generate social value beyond family needs. Similarly, residual assets in special needs trusts can be donated, seamlessly connecting individual family benefits with societal public welfare.

While the system has been established and scenario-based evolution is underway, the development of wealth management service trusts faces multiple practical challenges. These include fundamental legal obstacles and internal pressures on institutions’ capacity building.

In terms of institutional supply, although trust property registration pilots in real estate, equity, and movable assets have made progress, deeper systemic bottlenecks remain.

A senior executive from Shanghai Trust points out that some institutional barriers still restrict high-quality development of family trusts, leading many funds to flow overseas via offshore family trusts. These obstacles mainly include legal system revisions, non-fund trust registration systems for real estate and equity, and tax incentives.

He recommends accelerating the promotion and expansion of registration systems for non-fund trust assets like real estate and equity, optimizing real estate trust tax policies, and conducting pilots in Shanghai Free Trade Zone and Hainan Free Trade Port, allowing trust companies to establish dedicated subsidiaries for family trusts and private asset management, exploring offshore family trusts.

Professor Zhao Lianhui, Director of the Trust Law Research Center at China University of Political Science and Law, notes that current trust law provides a rough framework and rules suitable for developing asset management businesses but is inadequate for the nuanced needs of the trust industry’s refined development. It cannot meet the urgent practical needs of the general public.

Zhao points out that issues such as the qualifications of trustees and settlors, trust property ownership, and independence remain ambiguous; the rules governing fiduciary duties are disorganized and incomplete; trustee responsibilities are lacking; and rules for trust amendments and terminations are unscientific and unreasonable. The absence of foundational rules for trust registration and taxation has long constrained the industry’s development.

Furthermore, as wealth management service trusts continue to grow, trust companies face not just “whether they can do it,” but “whether they can do it well.”

As highlighted in the China High-Net-Worth Wealth Management White Paper jointly released by Bank of China and 21st Century Business Herald, the wealth management needs of high-net-worth individuals are undergoing a structural shift—from simple product purchases to asset preservation and appreciation, comprehensive asset allocation, and now to multi-dimensional needs including intergenerational transfer, corporate financial support, and integrated value-added services. “Personalization, professionalism, and security” are now core demands, requiring wealth management institutions to provide comprehensive solutions and personalized experiences.

Liao Jiayu also believes that the biggest current challenge is expanding service boundaries. “Clients need us not only as architects but as long-term partners in their family governance systems. This requires understanding family culture, helping them formalize informal practices into official regulations, and ensuring that trust—this ‘hardware system’—can seamlessly align and upgrade with the family’s ‘software system’ during intergenerational transitions. This marks a profound shift from ‘service provider’ to ‘co-growth partner’ with the family.”