Foreign-owned asset managers in Japan spend more on salaries and significantly more on bonuses than local companies, and enjoy much smaller profit margins.
As a percentage of the overall cost structure, salary payouts are 29% larger for foreign-affiliated asset managers than for local firms, while bonus payments are 84% larger, according to the survey by research firm Cerulli Associates and the Nomura Research Institute.
Together, salary and bonus payments account for 39% of foreign-affiliated asset managers' costs in Japan, compared to 27% for local asset managers, according to the figures.
The knock-on effect for profits is significant, with the profit margin at local asset managers more than a quarter of the overall cost base and just 9% for foreign-affiliated managers.
Yoon Ng, Asia research director for Cerulli Associates, says the research “suggests that foreign managers prefer a flexible and individual approach to pay”.
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