Daiwa aims for private banking outside Japan

By Emi Emoto and Brian Kelleher

TOKYO (Reuters) - Daiwa Securities Group Inc. (8601.T: Quote, Profile, Research, Stock Buzz), Japan's second-biggest brokerage, is betting on a new Singapore office to win business from wealthy Asian clients keen to invest in Japan, its head of private banking said on Tuesday.

Daiwa is entering a competitive private banking market in Asia, where wealth is growing at a faster rate than in Europe or the United States and there are already entrenched players like Switzerland's Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) and UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz).

Daiwa's edge in Japan has been separately managed accounts (SMAs), or "wraps" -- accounts that wrap management, administrative and transaction costs for all financial products in the customer's portfolio into one asset-based fee.

"We'd like to sell SMAs to wealthy Asians and Middle Easterners and even foreign socialites and celebrities," Koshiro Taniguchi, executive officer, private banking, said at the Reuters Wealth Management Summit in Tokyo.

Daiwa's outbound strategy is three-fold: win Asian clients interested in Japanese investments, develop Asian products for its Japanese clients, and win business from Japanese seeking lower tax jurisdictions abroad.

The number of Asia's high-net-worth individuals (HNWIs) -- those with more than $1 million in investable assets -- grew 7.3 percent to 2.4 million people last year, according to a report by Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) and Capgemini.

North American HNWIs grew 6.9 percent to 2.9 million people, while European growth was 4.5 percent to 2.8 million people.

Daiwa plans to differentiate itself by targeting Japanese retirees who spend a lot of their time outside of the country and want to put their money in lower-tax jurisdictions like Singapore.  Continued...