Capital Asset Planning

Asset management is crucial for wealthy Japanese families focused on optimizing inheritance for future generations. Financial institutions are in the quest for comprehensive asset management systems to help these wealthy families and business owners burdened by Japan’s high tax rates - 55 percent of the value of their assets must be paid in cash for the inheritance tax.

Leading the way for financial wellness, Capital Asset Planning (CAP) emerges as a beacon of wealth management in Japan.

CAP provides high-value digital transformation (DX) solutions for efficient asset formation and smooth asset and business succession. Financial planners and private bankers can leverage its solutions to help Japan’s wealthy families effectively manage a wide variety of assets such as financial portfolios, real estate, insurance, and company stocks and ‘visualize’ them for the future.

CAP’s premium integrated asset management system, Wealth Management Workstation (WMW), enables asset management businesses to integrate portfolio management for high-net-worth clients with 100 million yen or more, overseeing company stocks, real estate, insurance, and tax planning. Blending asset and tax management, CAP provides a customized approach to ‘policy-based financial planning.’ WMW leverages AI technology to help clients step up their customers’ wealth evaluation and management. Using the system, customers can mitigate numerous risks and ensure financial stability and growth of their assets over the short and long term.

Two prime questions that clients need to constantly ponder and answer are, “What kind of risk are customers currently facing?” and, “How much inheritance tax must be paid within ten months of the owners’ death?”

In Japan, where over 50 percent of assets are tied up in real estate and company stocks, inheritance tax and property division are major family risks for the affluent, potentially leading to disputes. The challenge lies in paying a 55 percent inheritance tax on wealth exceeding 600 million yen within ten months. Fluctuations in inheritance tax amounts could significantly impact asset owners, affecting their ability to pay. Many affluent Japanese families aren’t ready to handle this tax burden post-inheritance.

By integrating financial technology (FT) and information technology (IT), WMW allows for proactive risk analysis before inheritance and supports rational decision-making in asset management amidst day-to-day fluctuations in asset price. Using the WMW platform, issues encompassing financial portfolios, insurance, pensions, and tax solutions can be analyzed daily.

“People often cannot see the forest for the trees. We enable our clients to help customers anticipate and strategize at least ten years before inheritance to alleviate the burdensome tax payment and facilitate seamless property distribution,” says Masaichi Kitayama, CEO at Capital Asset Planning.

Backed by a team of certified public accountants (CPAs), tax accountants, and IT professionals, CAP aims to achieve a balanced fulfillment of the issues through the realization of ‘financial wellness.’ Japanese asset owners’ six pivotal concerns – goal-based planning, personal asset management, smooth property division, tax preparation, business succession strategies, and death and hospitalization care insurance – are addressed analytically. The team helps clients tactically identify the shortcomings by posing ‘Yes/No’ questions to customers in interviews using WMW.

When wealth details of individuals or business families are entered into the software, WMW provides two simulation options for asset management - a simple version and a detailed version. The simple simulation uses the interview sheet for basic input, calculating primary and secondary inheritance tax amounts based on asset information. It offers an overall view of assets and can optimize annual gift amounts if a gift plan is entered.

Detailed simulation allows specific heir designation and policy to calculate primary and secondary inheritance tax amounts. It analyzes inheritance tax payment possibilities for each heir, verifying payment feasibility. It also includes analysis and input for portfolio, insurance, and taxation measures, along with quick evaluation of complex real estate and stock inheritance tax values.

After completing the simulation, clients generate a proposal document to report to their customers. This document encompasses portfolio analysis, insurance evaluation and tax breakdowns. WMW provides 180 alarms and action plans aimed at addressing inheritance tax concerns. With this, clients are well-equipped to help customers manage risks and handle gifting strategies.

Equally impressive is Design Your Goal (DYG), CAP’s consulting tool system for goal-based planning designed for customers with financial assets of 10 million yen or more. DYG emerges as a brilliant tool for predicting lifetime cash flow, managing retirement funds, and strategizing inheritance. This empowers individuals to foresee their financial future and allocate assets efficiently. Connecting profile details, occupation data, and financial asset information from WMW to DYG, clients can accurately reflect the latest information and perform simulations while preventing financial asset erosion.

The crux of wealth management lies in foresight and strategic planning. As Japan will be in the era of great inheritance for the next 20 years, clients are prioritizing tech-driven methods to stay equipped and optimize inheritance. The evolution of wealth management in Japan isn’t just about financial prowess but financial wellness – the strategic fusion of knowledge, technology, and foresight. CAP, at the forefront of this evolution, epitomizes a new era—a synergy between financial planning expertise and technology, laying the foundation for a seamless succession of wealth and tax management in Japan and beyond.