For many foreigners living and working in Japan, retirement may be a long time off; for some, it may be on the horizon. For other expats who have left Japan and moved overseas, how to manage their investments for the future is an ongoing concern.
Choosing the best investment for you and your family in an uncertain world can be a daunting task. It has become even more important over the last 12 months since the coronavirus pandemic hit the world, causing a shake-up in financial markets and economies.
Financial planning firms such as Argentum Wealth Management can help you make the right decisions, not only now but for the post-pandemic period.
Founded in Japan in 2007, Argentum Wealth Management is based in Minato Ward, Tokyo and also has offices in Seoul and affiliate offices in Hong Kong to advise and offer ongoing support to clients throughout Asia and the rest of the world. They help clients with investment advice, retirement planning, education planning for their children, offshore tax planning, life insurance, as well as pension transfers and UK and U.S. national specific investment solutions. Through Argentum Properties, they help their clients purchase and finance property both in Japan and abroad.
The key to success for businesses like Argentum is trust. Co-founders Lloyd Danon and Martin Zotta are well known in the foreign community and have built up a solid team, enabling them to offer a more personalized approach to working with existing and new clients. Danon was born in Leeds, England, and studied at the University of Manchester – Manchester Business School. He has over 25 years of experience working within the financial services industry providing clients with personal financial advice. Zotta was born in Buenos Aires, Argentina, and grew up in New Jersey, graduating from Rutgers University. He also has over 20 years of experience working within the financial services industry in Japan.
How has the pandemic affected your business?
Danon: Like many businesses we found ourselves having to move very quickly to manage and support our clients online. Luckily, we had experience in this as many of our clients were already living overseas and so we applied the same remote online support we offered to them to our clients living here in Japan. But that was on the client side of the business, having the admin team move to work from home took more effort, but we got it done.
Zotta: Many clients are now working from home, so it has been easier to book times to talk with them as they have more flexibility. We find clients generally have more time now to work on their finances. It has been a very busy work period for us during which we have had to further expand the team.
What are the main issues that your clients have been asking you about during the coronavirus?
Zotta: We’ve noticed that clients have been saving more during this time, and are more aggressive in investing their extra savings. They are looking at their work life balance more closely, reassessing their retirement goals and what they need to do to hit their financial targets.
Danon: We’ve also noticed a greater interest in estate planning and life insurance in general. The pandemic has made people realize that life can end unexpectedly, so it’s important to have finances in order for loved ones should anything happen.
During times of crisis such as the pandemic, what havens for investment do you recommend to clients as being the safest?
Zotta: We recommend starting by having right portfolio for your personal risk appetite from the beginning, and one that correctly reflects the current risk in the market. There is no such thing as a “pandemic portfolio.” But there are opportunities presented by sudden market corrections and this is something that we advised clients to take advantage of and many did. A portfolio should be built in such away that you can move from protected assets into buying opportunities when the time is right.
Let’s go back a bit. Why did you decide to establish Argentum Wealth Management and how was it at the beginning?
Danon: Martin and I had worked together in a previous financial advisory company. We worked very well together, and had we decided to set up our own company 14 years ago. It allowed us to give a wider range of services to clients and have full control regarding quality of the services provided. We have continued to grow and we are now the largest firm in Japan offering financial planning services to the foreign community.
Zotta: It was a challenge at first because we actually established the company just before the Lehman shock in 2008. We were able to make it through that initial period, and I think that made our company much stronger as a result.
Is your company licensed?
We are locally licensed with the Japanese Financial Services agency. We are also a member of the Japan Investment Advisers Association. The FSA strongly recommends that you only receive financial advice and services from a locally licensed and regulated firm. You should always check that the company you are talking to or working with is properly registered and licensed in Japan.
Who do your clients tend to be?
Zotta: Our clients are foreign professionals or business owners who need financial advice tailored to their needs. They are people for whom Japanese domestic solutions are not the right fit, and are looking for solutions that are international, portable and secure. Some of our clients are just starting out in their careers, while others might be mid-career or even retired, so their needs will be different.
Danon: Although many clients are on higher incomes, we also offer advice on a wide range of solutions even for those who are looking to start out. With some accounts, you can start out by investing just a few hundred dollars a month. Others require an initial investment of a few million Japanese yen. Common goals for clients are building wealth, setting aside funds for their kids’ education, sorting out their life insurance, pension planning etc.
What should people look for in choosing a financial adviser?
Danon: I think trust is a key element. What you need to look for is a well-established company with a good reputation, licensed to offer advice locally and that has servicing and client support capabilities in house. The range of services is important. We can offer financial planning options from retirement to kids’ education to international investment and insurance solutions, pension transfers and inheritance tax planning, and wills for residents. We can also advice and support with real estate both in Japan and abroad, including sourcing properties and taking the deal from start to finish.
Pensions are a prime concern to foreigners in Japan.
Danon: Pensions are something everybody is concerned about. Most people are not expecting to get much from the Japanese government or their company pensions. So now it’s more important than ever to have a private retirement plan. We help clients set up their private retirement accounts, and can also help with pension transfers, and consolidating existing pensions. Most pensions are capped and if you are used to a certain lifestyle and you want to maintain that when you retire, you will need to supplement it.
Zotta: Particularly for expats who tend to move from one county to the next every few years, they will not have full government benefits, so it is important to have a private pension that is portable.
Are many of your clients overseas?
Danon: Due to the pandemic, the movement of clients abroad or into Japan has reduced, but having the flexibility to support clients living both inside and outside Japan is critical to our advisory service. We maintain regular contact with our clients, and we have an online portal which they can access and monitor their investments, and meetings are of course done remotely.
Inheritance planning is a big issue in Japan because of the tax system, isn’t it?
Danon: Japan has a very unusual tax system in that the tax burden is on the beneficiary and not on the estate. It almost forces the beneficiary into debt if they don’t have their own money to pay the required tax bill. Usually, an accountant would look at your current assets and liabilities and make an assessment of what your beneficiaries/spouses tax liability would be and then depending on the case we would then propose a solution. We have many clients with international assets, where one spouse is Japanese, and it is important to put these solutions in place so there is no economic duress on one spouse in the event of death.
Tell us about your team.
Zotta: We are very proud of the Argentum team. It is a very international and diverse team, committed to serving clients, and each person brings something unique to the company. Our advisory team has a lot of experience, as most of us have been in the industry for quite a while.
Danon: We have been very fortunate in that we have a very low staff turnover. In fact, applicants tend to reach out to us for positions.
How do you get feedback from your clients in Japan?
Zotta: As advisors, we stay in contact with clients as much as we can. Nowadays this is all done through Zoom or Skype meetings or telephone.
Danon: We develop long-term relationships with clients, and over the years, you come to understand your clients’ customs, ideas, objectives and spending habits. You get to know what they want and what is needed.
How do you ensure you are not dealing with clients with income from questionable sources?
Danon: In Japan and also internationally, there are know-your-client rules and source-of-wealth rules where everybody has to verify their wealth. These are very stringent regulations that all financial institutions require of their clients before allowing them to open any accounts.
For first-time investors, how should they go about contacting you?
Zotta: Our website has a lot of information as well as contact us forms that you can simply complete and submit and an advisor will respond to you on the same day. You can also email or phone us and then we will set up a free consultation either by Zoom or Skype or just over the phone. Initial financial reviews are strictly confidential, and are an opportunity for the client to let us know about their situation and what areas are most important to them.
Is this business a seven-day-a-week job?
Danon: Financial advisors will work on weekends. Some clients want to meet early mornings or after work, so the hours can vary. There are a lot of aspects to running the business which have to get done as well during the week. I work really long hours, but try to avoid weekend work so I can spend it with my wife and two kids.
Zotta: As an advisory company, we have to be flexible to our clients’ needs when it comes to scheduling. We strive for better work-life balance as we think this makes us more productive. Work is important, but so are family and friends. I think most clients think the same, and they usually prefer to meet during business hours as well.
For more information, visit www.argentumwealth.com or call 03-5549-9099.
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