What does it mean to terminate bank financing in advance? What is the reason?

In recent months, many bank wealth management products have been terminated early. Early termination of bank wealth management products has become an increasingly common phenomenon. This is bound to have a certain impact on investors. After all, investors who buy bank wealth management in the later stage do not rule out that they will encounter wealth management products that are terminated early. So what does it mean to terminate the bank financing in advance? What is the reason? Let's get to know each other.

What does it mean to terminate bank financing in advance?

Early termination of bank wealth management refers to the situation that wealth management products with a fixed term terminate the wealth management contract before the contract deadline. Or the wealth management products with no fixed term will not continue to perform the contract, and the wealth management products will be liquidated in advance. The early termination of bank financing is generally decided by banks or bank financing subsidiaries, and investors can only be forced to accept it.

Early termination of bank financing is similar to capital settlement. The early termination of wealth management products will not lead to the disappearance of investors' funds, but will return the remaining assets to investors according to the proportion of investment according to the liquidation situation.

Generally speaking, there are many reasons for the early termination of bank financing, as follows:

The investment performance of 1 is less than expected, and its net value fluctuates greatly. In order to stop the loss in time, the operation was terminated in advance. Some banks have set corresponding early termination clauses for regular financial management, which may include performance-related clauses. If the performance is not good, it will be terminated in advance to achieve the purpose of timely stop loss.

2 The management scale of wealth management products is declining, and the investment risk is high, which makes the continuous management cost-effective for institutions. The capital scale of banks is relatively small, and continuous operation can no longer bring benefits to banks. For general bank wealth management products, banks mainly obtain income through management fees, which are charged in proportion. The smaller the scale of wealth management products, the lower the management fee.

3. Major market changes or early termination of business according to regulatory requirements. It is often that banks think that there are some uncontrollable factors in the follow-up and require the early termination of wealth management products.