As more people take a keener interest in how they invest their money, demand is growing in Japan for financial planners and people qualified to advise individuals on their assets and investments.
“With people growing older and with uncertainty about pension funds, there is increasing demand for the advice of experts,” said Makiko Ishiwatari, a spokeswoman at LPL Japan Securities K.K., the Japanese branch of LPL Financial Services, a U.S. independent brokerage house.
To cater to rising demand for customized services, more brokers are encouraging sales staff to become qualified as financial planners and to advise customers on how to diversify their assets in a wide range of investment trusts, stocks and bonds.
Some brokerages have started offering services by commissioning independent financial planners, known as IFPs. Often, IFPs are qualified financial planners who are primarily employed as tax accountants or at insurance agencies.
Such IFPs work on a contract basis with brokerages, with the firms taking care of the paperwork, keeping a record of settlements and providing the necessary information on the financial products.
In October, Nikko Cordial Securities Inc. launched an independent financial adviser department to provide customers with financial planning services free of charge. The department has about 200 financial advisers working on a contract basis.
The financial advisers receive a portion of the commission fees that Nikko Cordial Securities gets each time a financial product is sold.
“We are confident that we have a group of experts who can provide advice from an independent and neutral standpoint,” a company spokesman said. “Customers are given the choice of selecting products from Nikko Cordial and other companies, including Fidelity Investments, Pacific Investment Management Co. and JP Morgan Fleming.”
LPL Japan Securities began offering financial planning services in February 2000. It currently has around 270 registered IFPs.
“We offer 72 investment products sold by 18 Japanese and foreign companies we have checked and chosen,” Ishiwatari of LPL Japan Securities said. “We don’t have any products of our own to sell, so we can offer services to our customers without any sort of favoritism.”
Ishiwatari said the financial planning business will probably grow in the future, as the government plan to cap bank deposit guarantees beginning April 2005 is making customers wary of the banking system.
“With the upcoming ‘payoff’ system, people will feel a stronger need to protect their assets,” she said.
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