"Reserve advisory fees, funds are still being sold" - Why can Yingmi Funds forcibly redeem customer positions?

Yenmi Fund’s QieMan platform was exposed for “illegally selling investors’ funds.”

Recently, an investor posted on social media claiming that Yenmi Fund’s QieMan platform “sold investors’ funds without authorization.” The message content showed that their “ChangYing Plan” was mistakenly redeemed due to system issues, resulting in the deduction of advisory service fees.

Several users commented with similar experiences, with one investor saying, “Their funds were sold while still in a loss.” Another investor told The Paper that, “I knew they would deduct the advisory fee, so I left some money in Yenmi Bao, but now they say they only charge from the dedicated Yenmi Bao, and still redeemed my funds.”

System configuration errors

In response, Yenmi Fund stated that, according to the advisory service agreement, fees can be collected through methods approved by regulatory authorities, such as fund transfers, designated fee accounts, or transfer of fund shares. Industry practice generally involves deducting advisory fees from client accounts based on service agreements.

Common methods include:

1. Transferring from the client’s designated money market fund account (such as various “Bao” products);
2. Deducting directly from the client’s investment portfolio (as in this case);
3. If the above are not feasible, deducting at the time of fund redemption.

Yenmi Fund further explained that initially, fees were deducted in the order of methods one to three. However, because the “ChangYing Plan” advisory portfolio is somewhat special—lacking money market funds and because feedback indicated that method two affected investment experience—the company adjusted the rules to prioritize methods one and three, canceling method two.

“However, in March this year, QieMan upgraded its fee system to help clients reduce advisory costs. During the upgrade, due to configuration errors, the previously canceled method two (deduction from non-money fund assets) was mistakenly re-enabled,” Yenmi Fund said.

Yenmi Fund emphasized that regarding the safety of funds and the collection of advisory fees, these are strictly regulated, just like fund management fees. Besides legally mandated charges, no organization or individual has the right to deduct funds from clients’ assets for any purpose.

The founder of the ChangYing Plan previously promised “no longer automatically sell holdings”

Is it compliant to sell funds without informing investors? How should losses caused by redemption be assessed? Can costs incurred from repurchasing fund shares be compensated? These questions are now the focus of investor concern.

Yenmi Fund stated that this incident was not due to illegal fee collection or overcharging, nor did it infringe on investors’ interests. The method of deducting fees “from the client’s investment portfolio” is a common industry practice, and it is clearly specified in the advisory service agreement.

“We have previously designed some rules to minimize impact on clients’ portfolios, such as prioritizing deduction from bond funds, mixed funds, and equity funds when no money market funds are available. Even then, it was not ideal, so we started testing a new approach: if there are no money market funds in the portfolio, fees are not deducted from the portfolio. This new design is better, and we plan to gradually implement it across more advisory strategies after system improvements,” Yenmi Fund said.

According to screenshots provided by investors, in December 2025, regarding “the handling of fund sales for advisory fee payments due to insufficient Yenmi Bao balance,” the founder of the ChangYing Index Investment Plan, “ETF Saves the World,” published an article. The article stated, “All friends who automatically sold holdings of the ChangYing Plan this month to pay advisory fees will receive a full refund of the advisory fees paid due to this incident,” and promised, “Such incidents will not happen again. Even in the most extreme cases, holdings will not be automatically sold.”

However, practical issues persisted. Some investors told The Paper that, “I knew they would deduct the advisory fee, so I left some money in Yenmi Bao, but now they say they only charge from the dedicated Yenmi Bao, and still redeemed my funds.”

Additionally, some investors publicly shared their redemption records on social media, showing that most of the sold funds were stock and mixed funds within the advisory portfolios, such as GF Wealth Consumption Theme Mixed Fund, E Fund CSI Overseas Connect RMB, Bank of Communications Schroder CSI Overseas China Internet Index, Bosera CSI Dividend Low Volatility 100 ETF, with redemption shares ranging from 0.74 to 15.16.

At the same time, the fee details page for redeemed funds shows that advisory service fees will be prioritized to be charged from Yenmi Bao (or dedicated Yenmi Bao). If the balance is insufficient at the time of deduction, the system will automatically reattempt deduction once additional funds are deposited into the client’s Yenmi Bao account (no manual operation needed). Moreover, since net asset values are only disclosed after fund sales, the actual charged amount may differ from the planned fee, and any remaining unpaid advisory fees will be collected in the next cycle.

Industry experts pointed out that this incident exposes operational risks in fund advisory institutions’ fee system upgrades and personalized strategy configurations. The setting of fee priority, system parameter changes, and discrepancies with customer expectations may still trigger concerns over account security and transparency.

Differences in fee deduction methods across fund advisory types

In November 2025, QieMan officially launched its first batch of advisory fund portfolios (including ChangYing Plan, ChunHua QiuShi, Weekly Partners, Marathon Fixed Income Enhancement, Southern Dream Plus, Money Market Three Best), switching from a model of fee deduction via transaction costs to a regular monthly fee collection.

This adjustment was closely related to the reform of public fund fee rates. After the 2026 reform, the industry fully abandoned the practice of deducting advisory fees from transaction costs, entering a new phase of independent fee collection. Regulations clarified that advisory fees must be charged separately and independently, prohibiting double charging. Advisory institutions are not allowed to receive trailing commissions from fund companies after collecting advisory fees; if technically impossible, they must fully refund investors.

Industry practice shows that fund advisory products mainly fall into two categories: management and recommendation. Management-type fund advisory involves investors authorizing the advisor to directly operate the account, including fund selection, timing of trades, and position adjustments, without manual confirmation each time. Recommendation-type fund advisory involves fund managers providing signals and reasoning, helping investors track market changes and reducing the burden of market analysis. Investors retain autonomy to choose whether to follow the signals, satisfying their independence needs.

Fee deduction methods may differ between these types. Management-type funds often set up a small amount of money market funds as a “deduction account” to facilitate automatic fee deduction without interfering with the main strategy. Recommendation-type funds, since the institution cannot directly access investor funds, do not require mandatory money market fund allocation for fee collection.

A public fund professional told The Paper that currently, management-type advisory fees are generally charged annually, accrued daily, and collected quarterly or upon redemption. Since the portfolio always includes chargeable money market funds, fees are deducted via these funds, avoiding non-money fund redemption issues. Another example is Alipay’s “Help You Invest,” where advisory fees are deducted by first transferring funds into Yu’e Bao when investors sell fund shares, then deducting fees from there.

Besides QieMan’s “ChangYing Plan,” Tian Tian Fund’s “Portfolio Genius Pro” is also a typical recommendation-type fund advisory product. Its fee strategy involves daily accrual, with monthly or lump-sum collection upon termination or redemption, primarily through transfer from money market funds. If no funds are available, fees are settled at the time of sale or contract termination. Investors may also have a “pending investment” balance in their accounts—funds that are not yet allocated to specific products, serving as liquidity reserves for future fee payments or additional investments.

Industry insiders say that management-type advisory funds, with dedicated deduction accounts, usually do not trigger non-money fund redemptions. In contrast, recommendation-type funds lacking such arrangements may, if system execution follows the original order, involuntarily trigger non-money fund redemptions, affecting investment continuity. Although QieMan reduced actual investor losses by not charging advisory fees this time, it also highlights the need for further transparency and prior notification in fee processes.