Elderly Japanese, among the world’s richest retirees, are flocking to inheritance advisers, tackling historical taboos on discussing death and providing a rare avenue of growth for the country’s brokerages and banks.
Trillions of US dollars parked in savings accounts are set to be released in the coming years as Japan’s death rate climbs and new, more onerous inheritance tax rules kick in.
The shift is attracting investment from companies such as Nomura Holdings Inc, Daiwa Securities Group and Mizuho Financial Group which are ramping up offerings of inheritance-related services and products, hoping to lock in a new generation of customers.
“Until now, Nomura has dealt with its customers individually. When they pass away, that connection ends. We want their children to become customers,” said Naoshi Sakai, who oversees trusts at Nomura Securities Co, a subsidiary of Nomura Holdings.
“Business chances for domestic sales will get smaller as the population shrinks, and we have to avoid that. Inheritance is one business that will certainly grow in the next 20 years,” Sakai said.
More than US$470 billion — nearly Norway’s GDP — in financial assets is passed on annually in Japan, Nomura Institute of Capital Markets Research estimates. That figure, which includes property, is set to grow to US$660 billion a year by 2030. Cumulatively, more than US$4.7 trillion, equivalent to Japan’s GDP, will be passed down by 2030.
As families plan to deal with this flood of funds, discussion of mortality is becoming more common. Interest in shukatsu — literally preparing for the end — has boosted death-related businesses, from try-before-you-die coffins to funeral planning.
“My sons are starting to give their opinion on inheritance, and I’m interested,” 84-year-old Susumu Yokoyama said after a recent Nomura seminar on estate planning in Tokyo. “I’m thinking about what to do.”
Due to a rock-bottom birth rate, Japan’s population is shrinking and ageing fast. The government predicts the population will fall to about 80 million by 2050 from 127 million last year. By then 40 percent of people would be over 65, compared with 27 percent last year.
They are also expiring faster than ever: The national death rate spiked to 10.4 deaths per 1,000 people last year from 9.5 in 2010.
However, they are wealthy. Those over 60 years old own more than half of the country’s US$14 trillion in personal financial assets, according to the Bank of Japan.
Japan already has among the highest inheritance tax in the world with a top rate of 55 percent, and changes introduced last year lowered the threshold for paying the tax to US$280,000 from US$471,000.
In the US, the threshold is US$5.5 million with a top rate of 40 percent, while numerous countries including China and 15 Organisation of Economic Co-operation and Development nations have no inheritance tax.
Trust banks, such as Sumitomo Mitsui Trust Bank Ltd, traditionally the main providers of inheritance services, are facing a push from banks such as Mizuho, which are seeking to bolster their asset management businesses as negative interest rates sap returns and demand for loans remains tepid.
However, even as the sector grows, death remains the elephant in the room for those selling the products. Marketing materials use phrases such as “preparing for the future” or “memories for your family,” and sellers tread carefully when meeting customers.
“We discuss inheritance not in terms of ‘what will you do when you die?’ but rather in terms of how you can leave assets to your family,” said Takayuki Konno, a marketing manager at Mizuho. “It’s a practical problem that people want to solve.”
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
RSS