Why is Money Forward Launching a Business Aimed at the Ultra-Wealthy? <Part 2>

In the first part, I discussed Money Forward's current initiatives that connect household financial management to asset management and formation, as well as the background behind the launch of our new NISA-compatible discretionary investment service "SUSTEN for Money Forward."

In this second part, I would like to talk about our collaboration with PrivateBANK to establish "Money Forward Private Bank Co., Ltd.," a joint venture that will develop a family office business to support the wealth management and accumulation of the ultra-wealthy.

We have announced through our press release about this initiative, but sorry the press release is only in Japanese.

To summarize, we have established a joint venture company, "Money Forward Private Bank Co., Ltd.," with PrivateBANK, which operates a family office business in Japan. We aim to challenge the family office business for individuals with assets over one billion yen (referred to as "ultra-wealthy" based on a report by Nomura Research Institute).

Let me introduce the concept of a family office and details of PrivateBANK as we embark on this joint venture.

About Family Offices

The term "family office" may still be unfamiliar in Japan, but it refers to a dedicated organization that manages the assets of one or multiple family groups, each with assets exceeding 10 billion yen. A single-family office serves one client exclusively, while a multi-family office, like PrivateBANK and our new joint venture, serves multiple clients. Family offices are characterized by their broad support range, including financial assets, real estate, inheritance, business succession, education, health, and philanthropy.

About PrivateBANK

PrivateBANK was founded in 2014 by President Sato, a former executive of Sumitomo Mitsui Trust Bank. With the vision of “providing genuine wealth management consulting for theJapan market," they currently offer asset management, advisory services, and various other forms of support for individuals with assets totaling over 10 billion yen. With nearly a decade of service, they possess top-class expertise in Japan.

What struck me as similar between PrivateBANK and our company is the commitment to "stand on the user's side, make things convenient for users, minimize the information gap with financial institutions, and enable users to make fair decisions."

Even today, many excellent financial institutions offer a variety of financial services and products. However, the sheer number of these can inevitably create an information gap with users. Moreover, the ultra-wealthy, busy with their primary occupations, often have limited time to manage their assets.

Our Goals for the Joint Venture

The pain points that busy ultra-wealthy individuals likely face were identified through extensive interviews during the service planning stage.?

Our joint venture aims to create a service that stands firmly on the user's side and addresses these issues. The value we want to provide through our service primarily includes the following three points:

Financial product sales and purchasing inherently have potential conflicts of interest, known as the agent problem. To offer a user-side service, we've adopted a business model that doesn't rely on transaction-based sales commissions but instead charges a basic fixed advisory fee. (While Money Forward Private Bank plans to obtain licenses for investment advisory and real estate services to offer broader support, additional costs will apply when users choose to utilize these services based on their intentions.)

We believe that "time" is an invaluable asset. For example, users paying 500 yen monthly for "Money Forward ME" have expressed gratitude, saying that what used to take hours on weekends to create spreadsheets for household accounting can now be done for 500 yen, which they find cost-effective when compared to their hourly wage.

For the ultra-wealthy, who often find themselves pressed for time, services that address challenges like "overwhelmed with paperwork from financial institutions, no time to meet with all of them," or "uncertain about current asset status, no one to consult with," will be beneficial.

Who We Want as Users

By partnering with PrivateBANK and leveraging digital technology, we aim to provide services efficiently and at low cost. Our primary target users are individuals with assets over one billion yen. Due to the high confidentiality required by our clients, we will operate the business through the joint venture company, Money Forward Private Bank Co., Ltd., as mentioned earlier.

Partners, We Want to Collaborate With

This business is committed to prioritizing the user's perspective. We are looking to build partnerships with financial institutions that can offer valuable proposals and services to users.

We also want to establish partnerships with tax offices that have wealthy clients, collaborating on services that go beyond what tax offices can cover alone.

Money Forward's vision is "Becoming the financial platform for all." With this joint venture, we aim to become "the financial platform for the wealthy," creating opportunities and connections between users and service providers on the platform.

In this sense, we are eager to build strong partnerships with financial institutions and tax offices. If you are interested, we would be delighted to hear from you.

Looking to the Future…

Through this initiative, we aim to learn what constitutes better asset management and advice, which financial institutions to partner with, and what products and services to offer, all while standing on the user's side. We plan to build Japan's family office business using digital technology.

Furthermore, by harnessing digital and generative AI technologies, we hope to provide user-side services to more people at lower costs, reducing financial challenges and increasing the time they can devote to their primary occupations and asset growth.

It's an ambitious goal, but every journey begins with a single step. We are committed to moving forward steadily and would greatly appreciate your guidance and cooperation!