OSAKA -- When Goro Tatsumi joined a securities firm in Osaka's Kitahama district -- the city's financial hub -- more than 40 years ago, he predicted that the finance business would become a leading economic force in this country.

But the 65-year-old chairman of the Osaka Securities Exchange says Japan's financial sector today still lags far behind international standards, a problem that he attributes to a lack of vision on the part of both corporate managers and investors.

Tatsumi himself is a rare survivor in the rapidly changing world of finance. In 1961, at the age of 25, he founded Kosei Securities Co., an independent securities firm in Osaka that has never fallen into the red.

"This isn't a society where people try to foster an enterprise. Most entrepreneurs own and control their companies until they die, no matter how big their firms become," he said.

He noted that in the United States, companies are often sold once the business reaches a stage beyond the founders' management ability. "They know their own limits and hand the business over to someone (else) so it can grow further."

Tatsumi also pointed to the lack of inclination among investors to nurture enterprises in Japan. "Most investors only think of making a profit by trading stocks. They don't scrutinize the future vision of the firms they invest in but only follow the moves of foreign investors to see how stock prices may rise and fall.

"Because they don't intend to foster a company's growth, Japanese investors rarely buy stocks of a company that has been unsuccessful in a business, something quite common in the U.S.," Tatsumi added.

The low level of investment activity here also partly stems from a lack of education about money, not to mention finance, he observed. The OSE head said he became familiar with stock transactions because his father, who died before Tatsumi started school, left a lot of stocks in his will.

"In Japan, students are not taught about business, finance, or money, while in the U.S. or Britain, children learn about stocks from as early as the elementary school stage," he said. "That is one of the reasons why not as many young people (in Japan) start their own business."

Tatsumi, who early on harbored the ambition to start his own brokerage, decided to make his move when he saw that regulations concerning securities firms would be tightened from a registration system to one requiring government authorization. Kosei was the last company to enter the brokerage business under the old system.

He has battled the industry's time-honored conventions for 40 years. For example, as a newcomer, Kosei had to wait for existing slots to open at the nation's bourses to become a member, so it took the firm 10 years to obtain official membership of the OSE and another decade to become a Tokyo Stock Exchange member.

During its heyday in the early 1990s, Kosei had 21 offices -- including three overseas -- and some 500 employees. But when he turned the firm over to his son Daisuke in June, the company had been downsized to only two offices in Osaka and Tokyo with 100 employees.

"I thought it would be easier and faster for him to begin from scratch, unfettered by what I did. Managers in Japan often have to struggle with the customary rules their predecessors could not break with," said Tatsumi, who believes Japanese traditions such as keiretsu business groups, lifetime employment and seniority-based promotions should be eliminated.

But what is most important when running a company, he said, is whether managers have the correct philosophy. "Without philosophy, no one can really run a company properly."

As OSE chairman, his present task is to attract funds from around the world to the city. "Osaka needs an attractive and active financial market to compete against Tokyo -- more than it needs the (2008) Olympic Games or an expanded version of Kansai International Airport. And Japan, as a country of this size, needs at least two major financial markets."