Vanguard is considering a change to its strategy in Japan by selling funds directly to investors instead of exclusively through local partners, write Min Jeong Lee and Hiroyuki Sekine for Bloomberg.

This marks a renewed attempt by the world’s second-largest money manager to crack a market that has mostly eluded it for nearly two decades.

“You have to think very carefully about the ability of an American company to come in, create a name essentially from scratch, create an infrastructure, and gain clients,” said David Kim, Vanguard’s Head of Japan. “It’s certainly not impossible.”

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The main challenge Vanguard faces is its unwillingness to pay commissions to fund distributors to sell its products. This increases the price for investors, and is common throughout Asia.

The decision to expand its presence in Japan comes as the country’s government seeks to get people to transfer more than $8.8 trillion in cash and deposit accounts to the stock market. Meanwhile, Japan’s powerful financial regulator has criticized expensive funds, saying they are not building a culture of long-term investing.

“We feel like we can be relevant here,” said Kim. “Vanguard can help introduce that low-cost mindset.”

Read more about the Malvern-based investment giant’s efforts in Japan at Bloomberg here, and check out previous VISTA Today coverage of Vanguard here.

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