Mitsubishi UFJ Morgan Stanley PB Securities
Notwithstanding the grand ambitions for private wealth management in Japan, it was a tough year for these businesses, all of which saw declines in profitability during our review period in the face of difficult market conditions.
Mitsubishi UFJ Morgan Stanley PB Securities, which lost ground too, is still clearly profitable, and its clients still think it is the best option in Japan. In Euromoney’s 2019 private banking and wealth management survey, it swept the board, winning in best private banking services overall, all classes of ultra-high and high net-worth clients, asset management, family office, philanthropy, ESG and succession planning.
The business is big, with 527 employees, including 250 advisers, and with Y3.39 trillion ($31 billion) of client assets as of March 31, 2019 (that figure at least is going up). It’s also the first to introduce an advisory business in a concerted, enterprise-wide fashion, having launched full-scale to clients in 2017. This has to be the future for private wealth as traditional brokerage models decline.
In another sign for the future, annuity revenue accounted for 23% of net revenue in the 2018 financial year, a number that will likely rise in future.
While some see automation as a threat – which it is to person-to-person brokerage models – this group has sought to embrace it, introducing robotic process automation to replace some back-office work, and reducing more than 8,000 working hours in the process.
Reinventing private wealth in Japan is not going to be an easy task for president Satoru Adachi, and will take a generation. But Mitsubishi UFJ Morgan Stanley PB Securities looks like the institution best placed to attempt it.