In what is being widely-regarded as a move to exert pressure on rivals in the highly-competitive Asia Pacific wealth management industry, Nippon Capital AM (Nippon Capital Asset Management J-LLC), the Japan-based investment house and wealth manager, is reportedly considering a broad-based reduction in its charges for overseeing institutional client funds.
The news comes hot on the heels of the firm’s announcement that it had appointed industry veteran, Toshiro Noda to the position of Senior Vice President.
Charles Worth, Executive Vice-President and Co-Chief Investment Officer at Nippon Capital AM explained, “Toshiro Noda has committed to increasing our funds under management significantly and the board has given him wide latitude and discretion in the manner in which he chooses to go about achieving that goal. Our investment performance speaks for itself but competition is fierce particularly from the large US-based banks and financial institutions with operations in our region.”
Institutions are typically paying slightly less than one half of 1 percent on funds and a reduction in charges would be seen as a shot across the bows of rivals whom Mr. Noda has called “complacent.” Recently, institutions have been moving to put pressure on under-performing asset managers, some of whose charges have soared from 1/10th of 1 percent to the current average of ½ of 1 percent over the decades.
“Clients should not have to subsidize under-performance. The manager cannot justify an increase in charges without a corresponding increase in return for the client, hence we are considering cutting charging rates as a show of goodwill to Nippon Capital AM clients and as a way of acknowledging that their continued patronage is of the utmost importance to us,” said Mr. Noda by telephone.
