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MUFG-Morgan Stanley venture to triple Japan wealth management team

Business will focus on the growing ranks of affluent Japanese

MUFG is the top shareholder in Morgan Stanley,holding a stake of 24%.   © Reuters

TOKYO -- The Japanese joint venture between Mitsubishi UFJ Financial Group and brokerage Morgan Stanley plans to nearly triple its staff focused on wealthy individuals by 2022, becoming a leading player in one of the country's few growing fields for financial services.

"We will increase the number of employees dedicated to services for high net worth clients to 1,600 in the next two years," Naoyuki Hamada, deputy president at  Mitsubishi UFJ Morgan Stanley Securities, told Nikkei.

Japan's shrinking population and negative interest rates make such clients a rare growth niche. Over 1.18 million Japanese households owned assets of 100 million yen ($934,000) to 500 million yen in 2017, the highest figure since 2000.

Their needs are also diversifying, especially in light of the coronavirus pandemic.

"We're seeing more demand not only for asset management, but also services related to business succession and [mergers and acquisitions], mostly among business owners," an executive at a major bank said.

MUFG next month will merge Hamada's unit and Mitsubishi UFJ Morgan Stanley PB, which heads the group's wealth management operations for high net worth clients. Mitsubishi UFJ Morgan Stanley also will dedicate 1,000 of its salespeople across Japan to rich clients.

"We will allow employees to pursue a work style that suits them, so they can maintain long-term relationships with their clients," Hamada said.

MUFG looks to introduce certain performance incentives used by partner Morgan Stanley, a major global player on services for wealthy individuals, such as bonuses that correspond to client returns.

Japan's banking giants traditionally had individual units deal separately with wealthy clients. But this structure made it difficult for the units to share information regarding these clients, pushing many groups to streamline the services.

Sumitomo Mitsui Financial Group formed a division for individuals with at least 2 billion yen in assets at unit SMBC Nikko Securities. It will help these clients with services such as asset management, estate planning and choosing overseas schools for their children. Sumitomo Mitsui Trust Holdings is also creating a joint venture with the Japan arm of UBS in 2021.

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