Wealth Management in Japan 2004

CHAPTER 1 EXECUTIVE SUMMARY

Introduction

What is this report about?

Market overview

Retail savings and investments

Wealthy individuals

Customer focus

Competitive dynamics

Future decoded

CHAPTER 2 INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report

CHAPTER 3 MARKET OVERVIEW

Introduction

Macroeconomic overview

GDP growth

Inflation

Interest rates

Stock Market Cap

Market size

Retail liquid savings and investments

Deposits

Direct Bond investment

Mutual fund investment

Direct equity investment

Income inequalityand the Gini index

Affluent wealth

Mass affluent individuals

Number of individuals

Onshore liquid wealth

High net worth individuals

Number of individuals

Onshore liquid wealth

Data

CHAPTER 4 CUSTOMER FOCUS

Products and service preferences

Property

Offshore tendency

Hedge funds

Equities

Bonds

Population profile

Age and diversity

Target segments

Expatriates

Entrepreneurs

High earners

Data

CHAPTER 5 COMPETITIVE DYNAMICS

Introduction

Opportunities

Barriers

Regulatory changes

Securities Companies

Local banking groups

Foreign banks

CHAPTER 6 FUTURE DECODED

Introduction

Forecast assumptions

Economic outlook

Retail savings and investments growth

Wealthy individuals

Mass affluent individuals

Number of individuals

Onshore liquid wealth

High net worth individuals

Number of individuals

Onshore liquid wealth

Data

CHAPTER 7 APPENDIX

Definitions

AAGR

Advisory portfolio management

CAGR

Discretionary portfolio management

The responsibility for buying and selling investments is delegated to an investment manager. The client grants the investment manager the authority to transact on their behalf, without seeking approval for every trade.

Gini index

High net worth (HNW)

An individual holding USD300K or more of liquid assets.

Liquid assets

Liquid asset bands

Mass affluent

Datamonitor uses this term to refer to individuals who are of above average wealth, but do not have sufficient liquid assets to be classed as HNWs, i.e. they have liquid assets of USD50K -300K. As such they form the bridge between the HNW market and the mass retail market.

Research methodology

The Global Wealth Model

The UK sub model

Asia-Pacific sub model

Forecasting methodology

Datamonitor's wealth numbers compared with others' numbers

Bespoke Wealth Market Sizing

Further reading

Datamonitor Asia-Pacific Wealth Reports

Datamonitor Asia-Pacific Insight Reports

Datamonitor Global Wealth Service: Competitor Tracking

Datamonitor Financial Services Consulting

Asia-Pacific contacts

List of Tables

Table 1: Macro-economic factors, 1998-2003

Table 2: Japanese onshore retail liquid asset balances, 1998-2003

Table 3: Japanese onshore retail liquid asset balances, 1998-2003

Table 4: Japan's GINI index and income quintiles

Table 5: Percentage of affluent individuals and liquid assets by liquid wealth band, 2003

Table 6: Japanese mass affluent individuals, 1998-2003

Table 7: Japanese mass affluent liquid assets, 1998-2003

Table 8: Number of Japanese HNW individuals, 1998-2003

Table 9: Japanese HNW liquid assets, 1998-2003

Table 10: Japanese population by age range, 2003

Table 11: Japanese property price index - Nationwide

Table 12: Japanese outstanding SME lending by lender, 2001

Table 13: Number of households by household income, 2003

Table 14: There are several foreign wealth brands competing in Japan

Table 15: GDP growth and adult population forecasts, 2003-2008

Table 16: Forecasted retail savings and investments growth, 2003-2008

Table 17: Number of Japanese mass affluent individuals, 2003-2008

Table 18: Japanese mass affluent liquid assets, 2003-2008

Table 19: Number of Japanese HNW individuals, 2003-2008

Table 20: Japanese HNW liquid assets, 2003-2008

Table 21: Wealth markets that have been modeled using the Global Wealth Model

List of Figures

Figure 1: Japanese retail savings and investments increased by just 2.1% in 2003

Figure 2: The wealthiest 0.3% of wealthy individuals own 12.3% of total liquid assets owned by wealthy individuals

Figure 3: There are a significant number of wealthy expatriates living and working in Japan

Figure 4: The number of affluent Japanese individuals is set to grow at a rate of 3.9% averaged annually over the 2003-2008 period

Figure 5: Methodology diagram and report structure

Figure 6: The Japanese economy has performed poorly in the last six years

Figure 7: The TSE has seen a turbulent few years in recent times, peaking in 1999 and the falling to a low in 2002

Figure 8: Japanese retail savings and investments increased by just 2.1% in 2003

Figure 9: The 20% of Japan individuals that have the highest income levels, earn 35.7% of total income

Figure 10: Affluent assets decreased as a percentage of total wealth over the 2000-2002 period

Figure 11: The wealthiest 0.3% of wealthy individuals own 12.3% of total liquid assets owned by wealthy individuals

Figure 12: The number of Japanese mass affluent individuals has grown at an average annual rate of 1.0% over the 1998-2003 period

Figure 13: Mass affluent liquid assets in Japan grew by just 4.8% over the 1998-2003 period

Figure 14: The number of Japan HNW individuals has grown at a rate of 1.8% averaged annually over the 1998-2003 period

Figure 15: HNW liquid assets in Japan dipped to USD2,102bn in 2002

Figure 16: Retail property prices in Japan have been decreasing rapidly in recent years

Figure 17: Japan has a relatively old population, with 18.5% of residents over 64 years of age

Figure 18: Almost three quarters of foreigners in Japan are from Asia, 2002

Figure 19: There are a significant number of wealthy expatriates living and working in Japan

Figure 20: The Japanese SME loan market is dominated by the large banks

Figure 21: In 2003 there were over 2.8 million resident households with an annual income of more than JPY10m (USD90,000)

Figure 22: Consolidation in the Japanese banking market created four über banks in 2001

Figure 23: Retail savings and investments set to grow at a compound rate of 3.9% between 2003 and 2008

Figure 24: Mass affluent individuals will increase at an average annual rate of 3.9% over the 2003-2008 period

Figure 25: Liquid assets of mass affluent individuals are expected to grow at a rate of 4.4% between 2003 and 2008 compounded annually

Figure 26: The high net worth population in Japan is set to grow at an average annual growth rate of 4.8% over the 2003-2008 period

Figure 27: Liquid assets are expected to grow substantially faster than mass affluent assets at 6.6% CAGR over the 2003-2008 period