The oldest business in the brokerage industry is undergoing its most active transformation.

As the "cornerstone" business of the securities industry, wealth management has a long history and occupies an important position.

At the same time, it cannot be avoided that this business is becoming less and less profitable: the trend of declining transaction commission rates, trading volume increasingly concentrated in the hands of quantitative hedge funds, and declining turnover rates among individual investors are all pushing brokerages' wealth management operations to face various challenges.

Meanwhile, this business still has the highest number of employees among all brokerage business lines, and high fixed costs and labor expenses are pushing this business onto a path of transformation for survival.

This time around, brokerage wealth management businesses have found their transformation model — banks. More precisely, CM BANK (ASX: 03968).

A Late but Necessary Awakening

Observing the trends in the securities industry in recent years, it is evident that nearly all brokerages are pursuing wealth management transformation, and all executives in charge are talking about it. Clearly, wealth management business reform and transformation has escalated from an optional initiative within business lines to a strategic decision at the company level.

Although each institution's specific path differs, the underlying logic of transformation is highly consistent — increasing revenue, improving quality, and reducing costs.

More specifically, the operating philosophy of wealth management must shift from "selling products" to "how much of clients' assets are managed well"; the revenue model must shift from "volume-driven" transaction services to generating incremental revenue from client asset scale and service depth; and the service format must shift from single-product sales to providing clients with comprehensive asset allocation and long-term accompaniment.

In one sentence — switching from a sell-side logic to a buy-side logic.

Adjusting Assessment: Difficult but Critical

To make clients willing to pay value-added fees, the core is to let clients experience the results of asset appreciation.

More directly: putting clients' profits and losses and interests first.

But transforming a business organization that has long lived on commissions into a team that can provide value-added services to clients involves more than a little difficulty, and the key of keys lies in adjusting the assessment system.

Information from the industry shows that, around the requirements of the buy-side era, wealth management (brokerage) businesses at various institutions are generally adjusting assessment indicators: reducing "flow indicators" such as product distribution, account openings, and trading volume, while increasing "stock indicators" such as client returns, net new AUM, retention rates, and satisfaction — this has become an industry consensus.

This is also what CM BANK (ASX: 03968) began more than two decades ago: reducing the weight of sales indicators, assessing asset scale and appreciation rates, and step by step pushing the team toward thinking in the interests of clients.

This process will not be simple. Adjusting assessments will bring negative pressure on short-term revenue, and more manpower and resources will be allocated to long-term goals. The "gap" in income during the short-term transition period still exists — this requires both the determination of brokerage senior management and a market performance that cannot be too weak during the same period, greatly testing the decisiveness of brokerage leaders.

Talent: A Tower of Nine Levels Begins with Heap of Earth

Once the baton of assessment changes, the upgrading of the team's capabilities is immediately pushed to the forefront.

The original logic of employee assessment was: if you can sell products and attract trading, that is good performance.

The current logic is: if you can help clients' assets appreciate and allocate for the long term, that is a good employee.

From marketing to investment advisory, the two skill sets are not naturally transferable.

Therefore, various institutions have launched investment advisory training. Data shows that Huafu Securities, which has implemented all-staff investment advisory, has more than 1,200 investment advisors in recent years; GF Securities has nearly 5,000 certified investment advisors; and Guosen Securities has nearly 4,000.

On this basis, each institution also needs to build a matching service system and staffing structure, including but not limited to a complete investment advisory service system and requirements, setting up dedicated investment advisory positions, internal system rating and evaluation, and rewarding and promoting elite investment advisory talent.

But it must be acknowledged that talent transformation is one of the links with the longest cycle, the most difficulties, and the slowest results among all transformations. Systems can be rebuilt, and product systems can be restructured, but the deeply rooted "mindset" and "habits" in a person's mind cannot be changed by a few training sessions.

Products and Services: The Process and Goals of Innovation

For clients, what is most perceptible?

It is not employee qualifications, nor merely a beautiful lobby — the most critical thing is always an attractive product shelf and service system.

For brokerages, this is also what requires the most deliberation:

How many financial products should be provided? Is a greater number of products always better?

How does performance look after products are sold? Can they meet client needs? If not, is there after-sales follow-up?

What is the product positioning? Is it to help clients achieve asset allocation and long-term investment goals, or short-term performance returns?

When building products and portfolios, what value-added services can the team provide? How can service delivery rates be tracked, individual characteristics accommodated, and common performance improved?

Also equally important, can the company provide the product and service system it envisions? How can missing capabilities be filled? Is it by bringing in external talent or internal cultivation?

When so many questions are laid out, it becomes clear: this is not only a company's business decision, but also a strategic decision and competitive strategy. Each institution needs to provide its own "distinctive answer."

Organizational Structure Adjustment: Repair the "Temple" Without Expelling the "Monks"

The business logic has changed, and the organizational structure must keep up — this is another arrangement that affects the whole body.

Different brokerages have different adjustment paths, but the direction is the same: strengthen the output of research, strategy, and tools, and improve the response speed between frontline needs and support.

Southwest Securities announced on August 24, 2026, that its board of directors reviewed and approved a proposal to adjust the responsibilities of the Digital Finance Department of the Wealth Management Business Unit. This is the first important organizational structure adjustment implemented after the arrival of the company's new general manager Li Jun, and is regarded as a core move by the company to strengthen online service platform construction, intelligent investment advisory system iteration, online client operations, and other capabilities, connect online and offline service links, and promote the transformation of traditional brokerage business toward refined wealth management.

Huafu Securities also announced in August this year that its Shanghai Second Branch was officially unveiled and fully put into operation. As the first branch of Huafu Securities positioned as an "internet branch," the newly established internet branch will become a vehicle for the company's intensive operation of long-tail client groups.

Shenwan Hongyuan proposed promoting the research institute's investment research capabilities down to the frontline and establishing a collaborative mechanism in which analysts and investment advisors jointly create content and provide services. More than one assessment system and cooperation plan have been adjusted for this purpose.

Shanxi Securities built a "centralized + platform-based" research, investment, and advisory service system, forming a collaborative model of "headquarters investment research empowerment + branch manager implementation."

Clearly, wealth management in the new era is no longer a standalone departmental business, but a "hub business" that connects investment banking, research, asset management, and products.

Connecting — synergizing — focusing: this is the common choice of the industry.

AI: Not Decoration, but Reconstruction

In this round of transformation, AI is a variable that all industry companies are watching, and brokerages especially so.

A large number of institutions have announced resource investments in AI: Guoxin Securities is said to have accumulated 48 types of AI client tags on its internal social platform; after the second phase of Southwest Securities' investment advisory AI assistant went live, total account opening time was shortened by 42%; Shanxi Securities announced that it has built nine major scenario-based AI capability clusters; Shenwan Hongyuan relies on its AI platform to complete standardized work such as information aggregation, service product selection, portfolio backtesting, and draft plans; Sinolink Securities, as the earliest brokerage in the industry to use AI Agents, continues to expand customer service knowledge intelligent agents and accumulate excellent employee experience into standardized procedures.

And these are precisely the things AI is best at: freeing investment advisors from repetitive labor so that valuable manpower can be spent where clients truly need it.

CMB: A Fine Example Set Before Others

All of this is what CM BANK (ASX: 03968) began doing 20 years ago.

In 2002, CM BANK (ASX: 03968) launched the Golden Sunflower wealth management brand, taking the lead in implementing a wealth management product system and "one-on-one" relationship manager service.

In 2007, it was the first in the industry to propose the retail AUM management philosophy — just like the "assessment baton" adjustments brokerages are making today.

In 2020, CM BANK (ASX: 03968) proposed the "Great Wealth Management Value Circulation Chain" strategy, the core of which was transforming from "product sales" to asset allocation, and from "business-centered" to "client-centered."

In 2025, CM BANK (ASX: 03968) implemented the "AI First" strategy, with retail AUM exceeding RMB 16 trillion and APP monthly active users exceeding 65 million.

It took CM BANK (ASX: 03968) nine years to accumulate its first RMB 5 trillion in client assets, the second was shortened to five years, and the third took only just over three years — the trajectory of scale growth itself is proof of strategic success.

Further on, CM BANK (ASX: 03968) also proposed the "TREE Asset Allocation Service System," dividing client assets into four categories: cash management, stable investment, aggressive investment, and protection management, truly managing all of a client's assets and accounts.

These five points are almost the roadmap for brokerage wealth management's current transformation of "crossing the river by feeling the stones."

Brokerage wealth management transformation is still "on the way," but the core is already clear: the future direction is not to assess how much employees have sold, but to examine how much client trust the platform has accumulated. Only by putting client interests first in every link of assessment, products, and services can brokerage wealth management truly complete that leap from "sell-side" to "buy-side."

That leap took CM BANK (ASX: 03968) 20 years to prove it was right.

Brokerages have only just taken off.