• In November 2023, Yamanashi Chuo Bank, Ltd. announced that it would enter the investment advisory business by leveraging the know-how of its securities management department. A wholly owned subsidiary was established in December. We will begin sales to investment management companies and others within fiscal 11. The policy is to develop consulting fees from investment advice into a new source of income.

• The subsidiary to be established will be located in Kofu City, with a capital of 5000 million yen, and will begin operations with less than 10 employees seconded from the bank's operations department. In the future, the company aims to expand its business to include investment management companies that manage publicly offered investment trusts.

• Among regional banks, Higo Bank, Ltd. (Kumamoto Prefecture) and Hokkoku Bank, Ltd. (Ishikawa Prefecture) have started investment advisory businesses through their subsidiaries.

■ Concurrent business regulations at various financial institutions　　

Various financial institutions, including banks, securities companies, and asset management companies, are subject to the scope of other business (concurrent business) that they can engage in under each business law, for the purpose of eliminating the risk that their business foundations are threatened by other business. There are certain restrictions.

[For banks]

• In the case of banks, based on the Banking Act, the scope of concurrent employment is stipulated as follows, and any other concurrent employment is not permitted.

• In line with changes in the role that banks are expected to play in society and the economy, the scope of banks' concurrent businesses has been revised frequently, and among the above, there is a tendency to expand the scope of "ancillary businesses" in particular.

• In addition, regulations on banks' concurrent business activities are imposed not only on banks themselves, but also on bank subsidiaries and bank affiliated companies. However, the regulations differ from those for banks themselves; bank subsidiaries are stipulated in [Banking Act 16-2], and bank sister companies are stipulated in [Banking Act 52-23]. Furthermore, bank subsidiaries are permitted to engage in some operations based on the Financial Instruments and Exchange Act, including "investment advisory business," under Article 17-2, Paragraph 2 of the Banking Act Enforcement Regulations.

■ Opportunities to utilize investment advisory services　　

1. “Consultation on entering the investment advisory business from other industries” is increasing　　

• There are four types of financial instruments trading industry: Type 4, Type XNUMX, Operation, and Advisory.
  Among these, the one that has the widest scope for utilization (this is my experience after many years of involvement in financial transactions), has lower hurdles for obtaining and maintaining a license than other types, and is often consulted by our company. "Investment advisory business".
  
  Especially recently, we have seen an increase in consultations regarding new entry into the investment advisory business from other businesses, such as the following.
  
  Our pattern is to focus on existing businesses that already have a certain track record and a certain number of customers, and also provide investment advisory services that can make use of the know-how and customer base of those existing businesses, increasing business synergies and expanding profit opportunities.
  
  [Frequently asked questions]

2. Why are we in the “investment advisory business” now?

• One reason for the increase in consultations for investment advisory services is the ``increased investment appetite of individual investors who have been affected by the coronavirus.''
  
  Due to the effects of the coronavirus, there has been a rise in people's awareness of how to protect their lives, and the spread of telecommuting, online interviews, etc. has created more free time, and a wide range of individual investors, including young people, are becoming more willing to invest. Additionally, due to the review of the NISA system and the government's efforts to disseminate investment and economic education, there is a growing interest in investment.
  
  In response to these social changes, we are working to provide investment information for beginners such as stocks and diversified, small-amount, savings-type financial products that are easy for individuals with little investment experience to get involved in, and to attract young investors at an early stage. It seems that there is an increasing number of inquiries about using the investment advisory industry as an opportunity to lock in and provide various investment and management opportunities over the long term.
  
  

3． The appeal of “investment advisory business”

• "Investment advisory business" refers to providing advice on "value of securities, etc." or "investment decisions based on analysis of the value of financial products, etc." based on investment advisory contracts (paid) concluded with customers. .
  
  
• It should be noted that investment advisors only provide "advice" and that individual investment decisions are made by investors (customers) themselves.
  
  For example, if "investment decisions are made by an investment advisory business rather than a customer" (including automatic trading systems such as Mirror Trade), the business may fall under the category of investment management business rather than investment advisory business. Additionally, if a business is involved in the sale or purchase procedure of a specific product, it may fall under Type 1/2 Financial Instruments Transaction Business or Financial Instruments Intermediary Business.
  
  
• I think the appeal of the investment advisory business lies in the following points.
  Furthermore, amidst the trend of "from savings to investment" promoted by the government, the NISA system is being reviewed and financial education is being spread, and the investment advisory industry is compatible with these national and policy directions. .
  
  [① Width of target audience (customer base, region, etc.)]
  　✓ Other industries (type 2, etc.) are often involved when customers actually make investments and transactions.
  　　 The investment advisory business is involved from the stage before making an investment, etc., regardless of whether the client actually makes an investment or not.
  　　 You can earn rewards.
  
  　　 In fact, stock investment schools etc. target young people who have no investment experience but are interested in investing.
  　　 We will teach you how to analyze individual stocks and how to read charts, and provide investment simulations.
  　　 We may receive compensation from customers who do not actually make investments.
  
  　✓ Investment advisors provide advice not only face-to-face, but also by phone, email, chat, documents, books, videos, etc.
  　　 It's wide-ranging. Due to the coronavirus pandemic, various online tools have become popular, and now you can serve customers all over the country from one location.
  　　 It is also practical to provide advisory services remotely to the target in a variety of ways.
  
  　　 In addition, investment advisory businesses may conduct solicitations online, such as on their homepage, under certain rules.
  　　 It is also possible to conclude an investment advisory contract electronically.
  　　(Comparison) In other industries (type 2, etc.), when soliciting and attracting customers on homepages, etc.
  　　　　　　This falls under electronic recruitment handling operations, etc., and the registration hurdles may suddenly become higher.
  
  [② Flexibility of compensation system]
  　✓ The compensation structure that investment advisors receive from their clients can also be set relatively flexibly.
  　　(Investment advisors are obligated to act in a manner that puts the interests of their clients first.
  　　　Of course, an unreasonable compensation system is no good. In addition, various procedures such as writing in the business method manual are also required)
  
  　　 Fixed remuneration can be set based on various criteria, such as ``¥1/month/¥1/year, ¥XNUMX/per issue, ¥XNUMX/per time.''
  　　 It is also possible to set a "success fee" that will be charged if the advice results in a profit.
  　　(A combination of fixed fee x performance fee is also possible) If you have set up multiple attractive plans/services,
  　　 In some cases, we have concluded multiple investment advisory agreements with a single client.

Four. Points to note when entering the investment advisory business from other businesses

• When entering the investment advisory business from other businesses, one thing to keep in mind is ``who should apply?''
  
  ✓ An investment advisory license is granted to the applicant (individual or corporation).
  　 It is not possible to transfer the license to another person/company.
  　(In principle, if you want to change the license entity, re-license the license.)
  
  ✓ In order to acquire and maintain an investment advisory business, it is necessary to
  　 You must continue to meet multiple requirements.
  
  ✓ Investment advisors are subject to inspections such as securities inspections and association inspections as gold merchants.
  　 In the unlikely event that an administrative action is taken, that information may be made public and may have an impact on other businesses other than financial trading.
  
  Based on these factors, we aim not only to develop our business in the future, but also to secure appropriate personnel and work side jobs in the long term.
  You need to choose the most suitable applicant.

• If the other business you are already conducting requires some kind of license, you will need to deal with the requirements and rules of multiple licenses across the board. For example, there are cases where you put so much emphasis on developing the requirements for gold trading that you end up in conflict with the requirements for other businesses (e.g., real estate transaction business, money lending business, etc.), so be careful.

Above

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