Retail Brokerage in Japan: Fighting Stagnation with Innovation

Celent Communications presents an overview of strategies adopted by Japanese securities firms to drive greater retail participation in the wake of a ten-year bear market.

In a new report, , Celent Communications concludes that, despite introducing a slew of new products and services aimed at individual investors, Japanese brokerages will not be successful in luring substantial new retail participation without a sustained market recovery. One bright spot in this generally depressed sector, however, is online trading. Celent expects online trading will account for nearly eighty percent of all retail trading in Japan by 2005, driven by a small but active segment of self-directed investors.

The report outlines new investment products being introduced by full-service, online and foreign securities firms in Japan, including covered warrants, exchange-traded funds, Japanese real estate investment trusts, and the new "Japanese 401k"

"Domestic brokerages, faced with intense competition on the institutional side from foreign firms, are paying more attention to the retail sector, offering a diverse lineup of new products to attract individual investors," says Celent analyst Neil Katkov, author of the report. "However, uptake of these products will be slow and insufficient to reverse the decline in retail securities investment, which fell seven percent between 1995 and 2000. This harsh environment, however, has only intensified the competition to attract retail business and firms will continue to introduce new investment products and more sophisticated features and services, both online and off."

A Table of Contents is available online.

of Celent Communication's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.