Retiring the “fierce sales” model: a fifth of domestic branches closed for wealth management (2019)

What it means to give up “fierce selling”

The implication of this reform is that Nomura let go of its own byword. The fierce selling of door-to-door visits and cold calls — enough to move the market — was the force that carried the firm to the top of the industry from the securities-democratisation drive onward. To announce that it would review that style is closer to a declaration of rebuilding the philosophy of how it earns than to a cost-cutting exercise: from brokerage that takes a commission on turnover to asset management that holds a client’s wealth for years and is paid for advice. Nomura, one may say, faced squarely the question of what a securities firm lives on.

Repainting the sign is not the same thing as changing the earnings constitution. Even after cutting a fifth of the branches and rebuilding the sales force around asset management, the bottom line had not reached the old peak and the ceiling remained low. In a market where online brokers take the trading and the mega-bank groups fight for the asset management, whether a great battleship of face-to-face retail can keep demonstrating added value is still an open question. Commission deregulation and digitalisation put the same question — what is the value of meeting a client in person? — to every securities firm. How far Nomura’s conversion answers it will be told, quietly, by the depth of client assets and fee income in the years ahead.