Market Insights Financial Wealth Management

Financial Advisory - Japan

Japan

Assets under Management in the Financial Advisory market are projected to reach €5.75tn in 2024.
Assets under Management are expected to show an annual growth rate (CAGR 2024-2029) of 0.03%, resulting in a market volume of €5.76tn by 2029.

Key regions: United States, Singapore, Europe, Switzerland, Canada

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Analyst Opinion

The Financial Advisory market in Japan has been experiencing significant growth in recent years. Customer preferences are shifting towards seeking professional financial advice to help them navigate the complex and ever-changing financial landscape. This trend is driven by several factors, including an aging population, increasing wealth, and a desire for personalized financial solutions.

Customer preferences: Japanese customers are increasingly seeking professional financial advice to help them make informed decisions about their investments and financial planning. This is partly due to the aging population, as older individuals are more likely to require assistance in managing their retirement savings and ensuring financial security in their later years. Additionally, the increasing wealth in Japan has led to a greater need for sophisticated financial planning and investment strategies.

Trends in the market: One of the key trends in the Financial Advisory market in Japan is the shift towards fee-based advisory services. In the past, financial advisors in Japan primarily earned commissions from selling financial products. However, there has been a growing recognition of the potential conflicts of interest associated with this model, leading to a shift towards fee-based services. This allows advisors to provide unbiased advice and recommendations based on the client's best interests. Another trend in the market is the rise of digital financial advisory platforms. These platforms leverage technology to provide personalized financial advice and investment solutions to a wider audience. This trend is driven by the increasing demand for convenient and accessible financial services, particularly among younger generations who are more comfortable with digital platforms.

Local special circumstances: Japan has a unique cultural and regulatory environment that influences the Financial Advisory market. The culture of saving and long-term investment in Japan has created a strong demand for financial advisory services. Additionally, the regulatory framework in Japan is designed to protect investors and ensure the integrity of the financial markets. This has led to a high level of trust and confidence in the financial advisory industry.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the Financial Advisory market in Japan. The low interest rate environment has made it challenging for individuals to generate meaningful returns on their savings. As a result, many people are turning to financial advisors to help them identify investment opportunities that can generate higher returns. Furthermore, the increasing life expectancy in Japan has created a need for long-term financial planning. Individuals are seeking advice on how to manage their savings and investments to ensure a comfortable retirement and financial security in their later years. In conclusion, the Financial Advisory market in Japan is experiencing significant growth due to changing customer preferences, including a desire for professional financial advice and personalized solutions. This trend is driven by an aging population, increasing wealth, and a need for long-term financial planning. The market is also influenced by local cultural and regulatory factors, as well as underlying macroeconomic conditions such as low interest rates and increasing life expectancy.

Methodology

Data coverage:

The data encompasses B2C enterprises. The figures are based on gross revenues, assets under management, and user & advisor data of relevant services and products offered within the Wealth Management market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research activities (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, gross national income (GNI), consumer spending, total investment (% of GDP), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. In some cases, the data is updated on an ad hoc basis (e.g., when new, relevant data has been released or significant changes within the market have an impact on the projected development).