Daiwa Securities, the second-biggest brokerage in Japan and the leading provider of separately managed accounts, is taking the formula down market with mutual fund wrap accounts, executives said at the Reuters Wealth Summit in Tokyo.
Rather than requiring a $400,000 minimum, as it does for its SMAs, Daiwa is only requiring about one-tenth that, or $43,000, for its mutual fund wrap accounts, which it just unveiled and is supporting with seminars in all of its branches in Japan this month.
With millions of Japanese shifting their savings from bank and postal savings accounts, Daiwa expects to raise as much as $8.5 billion for its wrap accounts in the first year alone. That would be a huge amount, given that Daiwa currently has $2 billion in SMA assets under management, or a 35% share of that market.
“We hope retirees will jump into the market with a significant portion of their funds,” said Koshiro Taniguchi, managing director at Daiwa. Noting that Daiwa fell short of boosting its SMA assets to $2.5 billion, Taniguchi said the firm is now turning to wrap accounts.
“Our strategy is to expand the scope of our clients through the sale of mutual fund wraps,” he said. “We expect some of these clients to move into higher-end SMAs.”