An online broker held apart — and folded back in sixteen years later (2021)

The weight of holding it twice

Roughly 160 staff at Matsui Securities against about 1,200 at a second-tier house. Those two numbers, printed side by side in 2000, bound Okasan’s next twenty years. If you cannot compete on cheap commissions while carrying a face-to-face salesforce, the online business has to be held in a separate legal entity — the 2006 founding of Okasan Online Securities appears to have been exactly that concession. It was absorbed sixteen years later because the premise of the concession had evaporated: the firm could not win on price, and all that remained was the cost of holding systems and administration twice over.

Yet it cannot be said that bundling everything into one company was the answer either. Four years after the merger, Okasan handed some 460,000 Japanese-equity and investment-trust accounts to SBI Securities, releasing the main part of the online business it had started itself. Spending on defences against account takeovers — a cost nobody was counting in 2006 — had pushed the economics under water. What remained was face-to-face consulting and the business of supplying securities functions to other firms. The choice to own an online broker outright was, it seems fair to say, wound up over twenty years.