Japan’s Ministry of Post and Telecommunications (MPT) has grand ideas for the country's postal system - if plans come to fruition, the Postal Savings Service will enter the mutual fund and 401(k) distribution business next year. According to Makoto Fujiwara, manager at the Postal Savings Bureau in Tokyo, the postal system - commonly called Ubin Chokin - comprises 24,000 post offices and "holes in the wall", giving it the highest penetration amongst any financial or government institution in Japan.
MPT's plans for "fund vending" will take the postal system a step closer to its goal of becoming a public financial intermediary, especially now that financial planning through investment products is gaining in popularity alongside Japan's traditional "deposit culture." According to Japanese fund managers, this could also trigger the flow of 260 trillion yen (US$2.4 trillion) of Japanese postal savings—primarily nest-eggs of small investors—into mutual funds. The move is also expected to increase overall fund penetration in Japan, which is still in single digits.
Fund managers are also hailing the emergence of the postal system as the most objective and mass-market vending channel. So far, Japan's fledgling fund distribution business has been dominated by a handful of local brokers, who traditionally have pushed proprietary products.
Hiroshi Ohno of Morgan Stanley in Tokyo commented: 'It will be a drastic broadening of sales options for foreign investment trust managers such as Morgan Stanley Asset and Investment Trust Management, that do not have huge proprietary channels in Japan.' An official at Nomura Asset Management agreed, saying: 'This will be like a floodgate opening…one with huge credibility. [The] Japanese public trusts the postal system, as it is government owned, and because they have always entrusted it with their life savings.'
Meanwhile, the MPT has sent a proposal to the National Diet, the Japanese parliament, with whom responsibility for debating and passing the new legislation lies. Only then can the Ubin Chokin begin vending mutual funds. Although no product plans have yet been firmed up, the postal system will start with low-risk public and corporate bond trusts, keeping in mind its novice investor base. No discussions with fund houses have been started yet, though the provider list would likely include both local and foreign players. Front-runners are expected to be local institutions such as Nomura.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment