MUFG Bank takes 15.55% stake in WealthNavi, builds Money Advisory Platform

MUFG Bank, a consolidated subsidiary of Mitsubishi UFJ Financial Group, has executed an agreement on capital and business alliance with WealthNavi.

In accordance with the Capital and Business Alliance, MUFG Bank will subscribe 9,110,000 shares of common stock of WealthNavi to be issued through a third party allotment (equivalent to a 15.55% stake).

Subsequently, MUFG Bank is planning to send one external director to the WealthNavi’s board of directors, subject to approval at the annual general shareholders’ meeting of WealthNavi, to ensure the Capital and Business Alliance proceeds smoothly. These transactions will make WealthNavi an equity method affiliate of MUFG Bank.

Rationale

MUFG, focusing on “digital transformation (DX)” as one of the key strategies highlighted in its Medium-term Business Plan, has enhanced contact points for digital services for all its customers and promoted digitalization in its products and services. MUFG can offer tailored proposals according to each customer’s life events, based on an enhanced data platform and applications integrated among group companies, with the aim of providing group-wide support for customers throughout their lives, illustrating the importance of the “lifetime value” concept.

WealthNavi, operating with its mission of “Helping working families build wealth,” provides its fully automated robo-advisor “WealthNavi” to build and maintain a long-term, globally diversified portfolio to build wealth for a more comfortable retirement. Since the launch of its service in July 2016, WealthNavi has released a series of new functions based on its capabilities in product development. After launching “Robo-NISA,” a tax-free managed account service using NISA (Nippon Individual Savings Account, a tax-exempt small investment program in Japan) account in February 2021, WealthNavi now offers an enhanced service fully aligned with New NISA which started in January 2024. Based on this track record, WealthNavi is the top robo-advisor in Japan in terms of assets under management and number of users, with assets under management exceeding 1 trillion yen as of January 11, 2024. WealthNavi is also committed to building a personal financial platform, extending its services beyond asset management.

MUFG Bank and WealthNavi have made joint efforts to address customers’ diversified asset building needs through their “WealthNavi for MUFG Bank” robo-advisor business alliance that provides enhanced services to MUFG Bank customers. Moreover, the partners have recognized that they need to offer services tailored to each customer over the medium to long term and provide supportive solutions to solve their customers’ diversifying challenges related to asset management in order to continue being their financial service provider of choice, amid the Japanese government’s policy changes and institutional reforms to promote Japan as a leading asset management center, such as its Doubling Asset-based Income Plan, as well as its decision to upgrade the NISA program and make it permanent. Therefore, MUFG Bank and WealthNavi have held a series of talks about potential collaborations beyond the framework of the existing business alliance, with the aim of further evolving services and offering greater added value to individual customers’ asset building.

Under this Capital and Business Alliance, MUFG Bank and WealthNavi reached an agreement on the development and provision of a Money Advisory Platform to solve customers’ financial issues throughout their lifetime, as well as promoting use of its robo-advisor services and “Robo-NISA,” through a combination of MUFG’s wide-ranging customer base and product lineup and WealthNavi’s outstanding capabilities in agile planning and product development. The partners are determined to make contributions to individuals’ sound asset building and pursue the enhancement of both parties’ corporate value by executing the strategy as follows.

Implementation Details

MUFG Bank and WealthNavi will combine the strengths of both parties to accelerate support for asset building in the retail market mainly consisting of working families and to offer services tailored to each customer over the medium- to long-term, with the aim of contributing to Japanese individuals’ sound asset building.

Specifically, MUFG Bank and WealthNavi will strengthen their existing collaboration in the robo-advisor business including “Robo-NISA,” and will additionally join hands in developing and providing the Money Advisory Platform, which will include services related to not only asset management but also others, such as life insurance, pensions, financial education, and housing loans. MUFG Bank and WealthNavi are planning to enhance and upgrade their service lineup in a phased manner, with the launch of enhanced collaboration in robo-advisor services and start of development of the Money Advisory Platform by the end of 2024, followed by the latter’s release in 2025.

Robo-advisor business

• Enhanced collaboration for referral of more customers who need fully-automated asset management services to “WealthNavi for MUFG Bank,” leveraging MUFG Bank’s customer base
• Initiatives to attract and acquire new customers for WealthNavi’s robo-advisor business by guiding users of MUFG Bank Direct internet banking service to “WealthNavi for MUFG3 Bank” and including “WealthNavi for MUFG Bank” in MUFG’s loyalty program
• Potential collaboration between WealthNavi and MUFG (including Mitsubishi UFJ Morgan Stanley Securities and au Kabucom Securities)

Money Advisory Platform

The Money Advisory Platform is intended to provide customers with optimal advice on financial products based on algorithms and collected customer data on their age, family structure, and PFM (personal financial management), aiming to offer the best customer experience.

• Development and service launch of the Money Advisory Platform through joint planning and discussion
• Provision of advice from a neutral standpoint, throughout customers’ lifetimes according to their specific circumstances, with a scope that will be extended in a phased manner from asset management to life insurance, pensions, financial education, housing loans, etc.
• Cross-selling to MUFG Bank Direct internet banking service users and potential utilization of WealthNavi’s advisory service at MUFG Bank branches
• More extensive and in-depth collaborations between WealthNavi and MUFG (Mitsubishi UFJ Morgan Stanley Securities, au Kabucom Securities, Mitsubishi UFJ Trust and Banking, Mitsubishi UFJ NICOS, etc.), such as including “WealthNavi for MUFG Bank” in MUFG’s loyalty program, to contribute to the shift from savings to investment trend in Japan

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