It was a little bit underwhelming to be honest
As part of my research into the Financial Planner test here in Japan, I had a look through the Japan Financial Planner Association website and discovered that they do free consultations in their regional centres (Tokyo, Osaka, Sapporo, Sendai, Nagoya, Hiroshima, Fukuoka, and Kanazawa).
Of course I called up and booked an appointment immediately for my wife and I.
Making the appointment was easy: just call up, give your name and a contact number, and let them know roughly what you are interested in talking about. I said I wanted them to look at our financial plan and give me feedback.
This provoked some puzzlement (the reason became clear once we met the planners) but wasn't a problem.
We arrived five minutes early for our 50-minute session and were shown into an interview room with two men around my age. To their credit they didn't seem particularly surprised to see me (is it bad that that is a positive?) and we soon got down to business.
The two FPs we talked to were both had Certified Financial Planner certification as well as the Financial Planner qualifications, so about as well-qualified as possible.
They confirmed that we wanted to get feedback on our finances, then asked some questions about our income, savings, etc.
Using that information they ran some simulations of pensions, etc. and gave us some estimates of what we would get under the current pension system, as well as how much we would be likely to save up with our current arrangements.
About halfway through the session they kind of gave up :)
Basically we are on track to meet our goals and have very solid finances. They were not able to suggest anything we're not already doing, and in fact hadn't heard of robo-advisors (I had to explain the concept to them).
We spent the rest of the time talking about my wife's business and whether she should create a kabushiki gaisha to reduce taxes and make it easier to sell.
There were some positives from the session though:
- I felt quite good that our plan met with their approval
- More importantly, my wife came away much more confident about our strategy (two professionals had confirmed that I am not making all this stuff up)
- Under current rules, we'd receive a fairly decent pension that would allow us to live a basic life even without supplementing it.
- They reminded me that we can spend our principal. I tend to focus only on yield and my goal is never to sell anything, but this is probably overkill.
Now, of course I am under no illusions that pensions will remain the same, but we currently are not including them in our plans at all so anything we do get will just be a nice bonus.
I also learned more about financial planners:
- They aren't particularly focused or even knowledgeble about investing: I often felt that I was thinking several levels above them (they didn't mention exchange rates, diversification, rebalancing, safe rates of withdrawal).
- They seemed to just think about cash, not investments. All of their calculations appeared to assume that we would accumulate cash and then spend it. They didn't take market growth or yield into account.
- They aren't familiar with the FIRE (financial independence, retire early) crowd. To the FPs, our plans are total overkill. According to their models, we could probably retire soon, spend down our assets until we get pensions, then live on the pensions. The idea of living off yield or self-insuring against Black Swan events provoked puzzlement.
- On a related note, they advised us to pay off our mortgage to reduce our monthly expenses. They also asked why we had a 30-year mortgage on such a cheap property. Even after I explained that I am happy to borrow as much money as people will lend me at 0.5% if I can invest and get 3-4% they didn't seem to get why carrying the mortgage might be better than paying it off.
- FPs in Japan seem to be about fine-tuning minor details (insurance policies, monthly savings) instead of looking for major wins (cars, housing, earning).
All in all, it was a fun experience, and one that I would recommend if you are near a centre and have something you want to ask about.
We had the option to schedule paid consultations as a follow-up but even the FPs didn't seem to think there was much point in doing that.
Friends of mine have talked to FPs that were trying to sell them insurance, etc. and it's very common to run into them working for other companies. Needless to say I recommend talking to an independent FP over one working on commission or salary.
Anyone else have experience with Financial Planners in Japan?