Foreign bankers set to reel in young Japanese

By Aiko Hayashi

TOKYO (Reuters) - Foreign bankers have a good shot at reeling in Japan's new generation of wealthy by offering investment advice and innovative services such as hedge funds, consulting firm Nomura Research Institute Ltd. (4307.T: Quote, Profile, Research, Stock Buzz) said on Tuesday.

About two-thirds of assets of the rich are managed by domestic banks and securities firms as many Japanese hold unfavorable views of foreign banks, Nomura Research senior consultant Hiroyuki Miyamoto said at the Reuters Wealth Management Summit in Tokyo.

But the new generation, defined as those under 60, is more willing than its older counterparts to use foreign financial institutions.

"They (the younger wealthy) are less reluctant to pay fees to receive advice and second opinions and to receive other kinds of services offered by foreign agencies," Miyamoto said.

Already 20 percent of the new generation use foreign financial institutions as their main financial helpers, compared with 33 percent who use domestic mega-banks, according to Nomura Research.

That means foreign bankers have made inroads into Japan, as they have just 5 percent of the older generation. Nearly 60 percent of the older generation use Japan's mega-banks and 21 percent use securities firms.

"Foreign banks can grab more market share by providing especially the younger wealthy with detailed services and innovative products," Miyamoto said. "The old generation might refuse that."

The country's rich, those with financial assets worth 100-500 million yen ($850,000 to $4.25 million), have two-thirds of their money in financial assets such as stocks and bonds and one-third in bank deposits.  Continued...