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The financial services industry in Japan is pretty unsophisticated. There are relatively few options for brokerages and mutual funds, and what options there are tend to be expensive. Furthermore, since pensions and taxes are generally handled by the employer there is not much reason for the average Japanese to think much about investments.
Jin Nakamura of Money Design is trying to change that with a very interesting strategy.
In a market that is dominated by price competition, Money Design has set out to create a premium lifestyle brand that has nothing to do with finance.
And it’s working.
Money Design has become the largest robo-advisor service in Japan and is partnering with some of the largest banks here.
It’s a fascinating story, and I think you’ll really enjoy it.
Show Notes
Why young Japanese are not investing
Why it takes so long to launch a financial product in Japan
The danger of using AI in investing
How to reach $1 billion assets under management
How to avoid competing on price in a price-sensitive market
What it will take to get the Japanese public to believe in startups
Links from the Founder
The Money Design homepage
Check out Jin’s blog
Friend Jin on Facebook
Check out THEO. It’s pretty cool.
Leave a comment
Transcript
Disrupting Japan episode 98.
Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero, and thanks for joining me.
Today, we’re going to talk about money, about investment. It’s not about exciting things like venture funding and ICOs but about simple somewhat stuffy stocks and bonds.
Jin Nakamura cofounded Money Design as a way to introduce millennials and other young Japanese to investing. Money Design has created THEO, one of Japan’s first robo-advisors. Now, robo-advisors are a lot simpler than their name implies. Basically, all that’s happening is that you contribute a small amount of money each month and the robo-advisor will invest a certain percentage of that in stocks and another percentage in bonds and will make some adjustments if the allocations get too far out of alignment. I
t’s a simple concept, really, but as Jin explains, young Japanese have shown very little interest in this kind of investing. So to reach them, Money Design created a lifestyle brand, one that had absolutely nothing to do with finance or money, and it worked. Young investors have been flocking to the THEO system and have made it the largest robo-advisor in Japan. In fact, Jin shares some of the insight that will be very important to anyone running a fintech startup or trying to sell financial services in Japan.
But you know, Jin tells that story much better than I can. So let’s hear from our sponsor and get right to the interview.
[Interview]
Time Romero: So I’m sitting here with Jin Nakamura, the CEO of Money Design and creator of THEO, a robo-advisory for retail investors. Thanks for sitting down with me.
Jin Nakamura: Thank you very much. Thank you for coming in our office.
Tim: Delighted to be here. I described Money Design in a very simple way but I think you can explain what you guys are doing much better.
Jin: Our product is very simple. We are providing a robo-advisory service in Japan. And then our global competitor is Betterment and Wealthfront. We are one of the first venture company to provide robo-advisory services in Japan.
Tim: For those of our listeners who don’t know, robo-advisory just means that individual investors can give you a relatively small amount of money and you invest it automatically for them.
Jin: Yes. We are providing the very simple financial product by smartphone. Once you access our website and then you answer just five questions. We showed the portfolio for each customer. Currently, we are providing over 230 portfolios for the customers. Once customer put their money into our portfolio, after that,
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