The landscape for getting investment advice in Japan has changed over the past few years says Richard Cayne at Meyer Asset Management Ltd. Its unfortunate but residents of Japan while they themselves are free to invest anywhere in the world without restriction cant get reliable information these days.
Just a few years ago investment advisors in Japan were able to give advice and help their clients by showing and intermediating hundreds of overseas investment choices but now that the regulatory regime has changed, this is no longer legally possible. Now says Richard Cayne at Meyer Asset Management Ltd investment advisors in Japan are limited as to what activities they can perform under the license they hold. Under the Financial Instruments and Exchange law (FIEL) an investment advisory firm licensed is only allowed to give general advice to clients and only charge clients for this advice. There is no provision to allow for selling, intermediating or introducing their clients to overseas funds which are not registered in Japan with the regulators there. In fact just an introduction whereby they receive a fee is seen now to be a form of solicitation by the regulators helping in the sales process and is no longer permitted by law.
The ultimate looser in this is the Japan client wanting to diversify his/her holdings abroad. There are still some intermediaries in Japan who market themselves as licensed and able to give financial advice which is misleading to clients given the above laws do not permit the said advisory firm to introduce specific securities to residents in Japan regardless of nationality. Richard Cayne of Meyer has assisted the regulators in Japan in defining what the offshore investment market entails and also to inform overseas fund companies that they themselves need to be cautious about dealing with investment advisory firms in Japan and to register their products with the regulators should they want to market their products via Japanese based entities to residents of Japan. Clearly the FSA in Japan wants to have more control over companies that wish to market their products in Japan.
Unfortunately the FSA has set new conditions and companies like UBS, Credit Suisse, and a long list of private banks and investment firms previously offering offshore funds to residents of Japan have shut their offices in Japan and simply assisting Japan clients from abroad while being careful not to solicit clients in Japan. This is the only way forward and means that residents of Japan if they want to invest abroad can do so but must be the ones interested reaching out to the overseas financial firms.
The good news for internationally minded investors resident of Japan is that they are free to invest wherever they like without restrictions unlike many other countries in Asia where residents are not free to do so. Therefore Richard Meyer Cayne recommends that any serious investor should look to the advantages that offshore investments hold for them.
Richard Cayne had lived in Tokyo Japan for over 15 years and currently resides in Bangkok Thailand. He is Managing Director of the Meyer Group of companies which is part of Asia Wealth Group Holdings Ltd a London UK stock market listed financial services holding company.