[Direct answer]Whether investors can claim compensation for losses in bank wealth management products depends on whether the bank is at fault. If the product's risk level matches the client's tolerance, the sales process is compliant, and the losses stem from normal market fluctuations, investors are generally responsible for bearing the losses themselves. However, if the bank engages in misleading sales, verbally promises guaranteed returns, fills out risk assessments on behalf of investors or performs them superficially, fails to disclose important information in a timely manner, or sells products privately, investors can claim compensation in accordance with Article 577 of the Civil Code of the People's Republic of China and relevant rules on financial consumer protection. The statute of limitations is three years. It is recommended to first obtain evidence by retrieving the audio-video recordings and risk assessment materials, then file a written complaint with the bank and report the matter to the regulatory authorities. If no settlement can be reached, investors should promptly file a lawsuit. For related services, please refer to the following link:Financial capital and cross-border legal services involving foreign affairsAndBeijing Henglue Law Firm.

1. Problem background and typical scenarios

After the implementation of the new regulations on asset management, bank wealth management products have become fully net-value oriented, with no longer guaranteed principal and returns. The net value of the products fluctuates with the market, and this has become the norm. In practice, the most common disputes include: elderly or low-risk tolerance clients being recommended to purchase products with significantly higher risk ratings; client managers verbally promising "stability" and "no historical losses," downplaying the risk of drawdowns; risk assessment questionnaires being guided or even filled out by client managers, resulting in risk ratings that are disconnected from the clients' actual situations; problems with the underlying assets of the products, with the bank failing to disclose them in a timely manner, causing clients to miss the opportunity to cut losses; and bank employees using their positions to privately sell non-bank products, forming "illegal transactions." After losses occur, banks often respond with "normal fluctuations," leaving investors with no way to provide evidence and only being able to passively accept the losses.

II. Key points of contention

  • Whether the suitability obligation has been fulfilled: whether the risk assessment is genuine and effective, whether the product risk level matches the client's risk tolerance level, and whether the risk disclosure is sufficient. Such facts are mainly proven by the bank according to the law. If the bank cannot provide materials such as dual recording and questionnaires, it will often bear adverse consequences.
  • Attribution of losses: When market systemic declines overlap with banks' negligence, losses should be apportioned based on the proportion of causation. Courts typically determine the compensation share by considering market data and the degree of negligence, rather than awarding all or nothing compensation.
  • Product ownership and responsibility entities: Whether the financial products are self-operated by the bank, sold on behalf of the bank, or privately sold by employees as "unofficial transactions", determines whether the responsibility entity is the bank or a third-party institution, and also affects whether the bank will be held accountable for failing to fulfill its management obligations.

III. Professional analysis by Henglue Lawyers

The success or failure of financial claims depends on two factors: identifying the bank's fault and securing evidence from the sales process. Under judicial and regulatory frameworks, if the seller institution fails to fulfill its suitability obligations and causes financial consumers to suffer losses, it should bear compensation liability. The seller institution must provide evidence to demonstrate the fulfillment of its obligation to provide information and explain risks. If the bank fails to provide materials such as dual-recording audio and video, risk assessment questionnaires, and risk disclosure documents, it will often be deemed unable to provide evidence. Investors should first apply to the bank to retrieve dual-recording documents from the account opening and sales process, the original risk assessment questionnaires, product brochures, and investment agreements, and compare them with the promotional materials, the client manager's promises, and the contract terms. At the same time, they can check the product registration code on China Wealth Management Network to verify whether the product is a bank's self-operated or agency-sold product. Products without a registration code are often non-standard products. If employees are found to have sold products privately, investors can claim that the bank has loopholes in its employee management and require the bank to bear corresponding responsibilities, while simultaneously filing a complaint with the regulatory authorities. The litigation claims typically seek the return of the principal and corresponding interest losses. The court will determine the compensation ratio based on the fault of both parties, the holding period, and market trends. For disputes involving contractual aspects such as agency sales contracts and intermediary commitments, relevant evidence can be provided to support the claims.Business and contract dispute resolution services for enterprisesOutput: Sort out the chain of responsibility.

IV. Practical suggestions and legal basis

At the legal basis level: Article 577 of the Civil Code of the People's Republic of China stipulates the liability for breach of contract, and Article 188 stipulates a three-year statute of limitations; the "Guiding Opinions on Regulating Asset Management Business of Financial Institutions" (issued in 2018) clearly stipulates that financial institutions selling asset management products should fulfill the obligation of investor suitability management, fully disclose information to investors, disclose risks, and not mislead sales; the "Minutes of the National Court's Civil and Commercial Trial Work Conference" (issued in 2019) systematically stipulates the seller's obligation of suitability, the obligation of informing and explaining, and the distribution of the burden of proof, clarifying that the seller should bear the burden of proof for whether it has fulfilled its obligations. At the practical advice level: apply in writing to retrieve the video recording and evaluation questionnaire at the early stage of losses to prevent evidence from being overwritten; save screenshots of product promotion pages, records of client managers' sales pitches, and transfer vouchers; first file a written complaint with the bank and request a response within a specified period, then file a complaint with the dispatched agencies of the China Banking and Insurance Regulatory Commission; if no agreement is reached, sue within the statute of limitations and, if necessary, apply to the court to retrieve the bank's internal sales and risk control records. After entering the claim litigation, the verification of property clues can be assisted byCreditor-debtor relations and enforcement case servicesAdvance.

5. Henglu Law Firm's Reminder

The core logic of claiming compensation for financial losses is not "you have to compensate if you lose", but "you have to compensate if the sale violates regulations". Situations such as being promised guaranteed returns when signing the contract, going through a formality of risk assessment, and having the product's risk level artificially raised all have value in seeking legal evaluation. Special reminders on two matters: Firstly, do not sign documents such as risk confirmation and waiver of claims under the bank's verbal reassurance, otherwise it will greatly increase the difficulty of subsequent claims; Secondly, the preservation period of evidence in processes such as dual recording is limited, and delay is the greatest enemy of claims. If you are currently facing similar disputes, it is recommended to bring your contract and vouchers for a consultation as soon as possible, and you can contact us through the following channels:Financial capital and cross-border legal services involving foreign affairsMake an appointment for an evaluation.

Q1: If a financial product loses money, under what circumstances does the bank need to compensate investors?

There are mainly three types of situations: First, violations of the obligation of appropriateness in the sales process, such as selling high-risk products to customers whose risk assessment clearly does not match the products, or filling in the assessment questionnaires on behalf of customers or going through the motions; Second, misleading sales, such as verbally promising guaranteed returns, exaggerating profits, and concealing the true risks of the products and underlying assets; Third, errors in management and operations, such as failing to operate within the contractually agreed investment scope or failing to disclose important information in a timely manner. If losses are caused by the above situations, investors may claim compensation in accordance with Article 577 of the Civil Code of the People's Republic of China and other provisions; if the bank is unable to prove that it has fulfilled its obligation to provide explanations and notifications, it will generally bear adverse consequences.

Q2: The risk assessment questionnaire was filled out by me at random at the request of the client manager. Can it be used as a basis for claiming compensation?

Yes, and it is often crucial evidence. Appropriateness management requires banks to genuinely assess clients' risk tolerance. If a client manager guides or fills out a "high score" on behalf of the client to match high-risk products, this constitutes a superficial assessment and a violation of the obligation of appropriateness. Verification methods include retrieving dual-recording audio and video, comparing questionnaire handwriting, and restoring account opening process records. If the bank cannot prove that the assessment is genuine and effective and that the products match the client's risk level, judicial practice often holds it liable for fault and requires it to bear compensation responsibilities in proportion to the fault. If abnormalities are found in the questionnaire, evidence should be fixed as soon as possible and the client should not sign confirmation documents as required by the bank afterwards.

Q3: If I lose money on the "unofficial transactions" sold privately by a bank employee, who should I seek compensation from?

"Flying orders" refers to bank employees using their positions to privately sell products that are not issued or sold on behalf of their own banks. If it can be proven that the sales occurred in the bank's business premises and during working hours, using the bank's name or resources, it can be argued that the bank failed to fulfill its obligations of internal management and risk prevention, and the bank should bear corresponding compensation responsibilities. At the same time, if the actual product-raising party is suspected of illegal fund-raising, the case should be reported to the police immediately, and the funds should be recovered through the asset recovery process. To determine whether there are "flying orders", you can check the product registration code on China Wealth Management Network. Both regular bank self-operated and agency-sold products have codes that can be checked. If any private sales are discovered, you should immediately file complaints with both the bank and regulatory authorities and preserve all evidence.

Q4: Can I still claim compensation from the bank even after signing the Risk Disclosure Statement?

Yes. Signing the risk disclosure document is just one of the formal requirements for banks to fulfill their obligation to provide information, but it doesn't mean that the bank has actually fulfilled its obligation to provide explanations. In judicial practice, courts will comprehensively review substantive elements such as the content of the dual recording, the sales process, and the investors' actual understanding of the product. If the client manager verbally promises guaranteed returns while guiding investors to sign the risk disclosure document, the obligation to provide explanations will still be deemed unfulfilled. However, it should also be noted that it will be more difficult to claim "complete ignorance" after signing the document. Therefore, process evidence such as dual recording audio and video and chat records are particularly important. After suffering losses, investors should not sign documents such as the "Risk Confirmation Letter" at the bank's request, to avoid admitting that they were aware of the risks.

Q5: What is the process and time limit for claiming compensation from the bank?

It is recommended to proceed in four steps: 1. First, secure evidence by submitting a written request to retrieve the dual-recording data, evaluation questionnaires, and product manuals. 2. Second, file a written complaint with the bank, demanding a written response within a specified timeframe and keeping the receipt. 3. Third, file a complaint with the local branch of the China Banking and Insurance Regulatory Commission. Regulatory intervention often facilitates settlement. 4. If no settlement is reached, initiate legal proceedings within the three-year statute of limitations and, if necessary, apply to the court to retrieve the bank's internal sales records. In terms of legal procedures, simple cases are handled through summary procedures and typically concluded within three months, while ordinary procedures are generally completed within six months. Dual-recording evidence has a limited retention period. It is recommended to initiate proceedings as soon as possible after losses occur, rather than waiting until evidence is lost before taking action.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Financial capital legal services·Beijing Henglue Law Firm