By Makiko Yamazaki
TOKYO (Reuters) – Japan plans to ask domestic institutional investors such as banks and insurance firms to actively tap emerging asset managers as the government aims to spur healthy competition in the country’s $5 trillion asset management industry.
The request, which was included in the government’s action plans for asset management industry reform, reflects concerns that the industry is dominated by those affiliated with large banks and brokerage houses.
The government will ask financial institutions “to actively use emerging asset managers and not to exclude them just because of their short track records,” according to the action plans released on Wednesday.
To help institutional investors pick emerging asset managers, the government plans to compile a list of those managers with their track records.
The plans also pledged to remove hurdles, including Japan-specific business practices that have been hampering new entrants in the asset management industry.
The reform has been driven by Japan’s revived policy pledge to move 2,000 trillion yen ($13.48 trillion) of household financial assets into investment, as half of such assets are sitting in cash or bank deposits.
(Reporting by Makiko Yamazaki; Editing by Christian Schmollinger)
