Automatic monthly investments through Rakuten

[EmaxisSlim Cultist]

There are 3 benefits.

1. Ensuring you have the 1000万 coverage accross 2 or 3 accounts.

2. The ability to earn free points via Tsumitate (SBI/Monex/Rakuten). (The max is ５万 per card/account)

3. Access to different products of services.

....

[adamu]

So, who is concerned enough about this that they have either divided assets into 2 or more brokers, or are planning to do so?

I don't think it is remotely likely that one of the big brokers will have problems.

Have you heard of Yamaichi? It used to be one of the big four, with Nomura, Daiwa, and SMBC.

https://en.wikipedia.org/wiki/Yamaichi_Securities

I think splitting across multiple brokers is a sensible decision. If the worst happens, you will still have access to the funds in the other brokers, which should hopefully give you the patience to let the failed broker situation work out.

Personally I've been exclusively SBI since I started, but I've recently started Rakuten too. May also be useful for writing wiki guides if I ever get around to it

There are 3 benefits.

1. Ensuring you have the 1000万 coverage accross 2 or 3 accounts.

2. The ability to earn free points via Tsumitate (SBI/Monex/Rakuten). (The max is ５万 per card/account)

3. Access to different products of services.

IMO most of these are not that relevant. The main benefit is having access to some of your assets in another broker in the case one of the brokers fails. To break it down:

1. Covered this above - this insurance is only to cover the case where the protection schemes in place fail. Using this as a reason for spreading across brokers is only valid if multiple brokers fail at the same time. If that was the case, I bet there are going to be bigger problems to worry about
2. Nice to have, but pretty minor compared the benefits of regular savings and investments, and protecting them from loss. This is more of a personal choice for people that like to hack the system, rather than a general guideline that's universally useful. You might get orders of magnitude levels of return by putting the same amount of effort into market research for a job change / asking for a raise, for example.
3. Also nice to have but for most passive investors, the options are all pretty vanilla across the (online-broker) board.

[EmaxisSlim Cultist]

1. Covered this above - this insurance is only to cover the case where the protection schemes in place fail. Using this as a reason for spreading across brokers is only valid if multiple brokers fail at the same time. If that was the case, I bet there are going to be bigger problems to worry about

2. Nice to have, but pretty minor compared the benefits of regular savings and investments, and protecting them from loss. This is more of a personal choice for people that like to hack the system, rather than a general guideline that's universally useful. You might get orders of magnitude levels of return by putting the same amount of effort into market research for a job change / asking for a raise, for example.

3. Also nice to have but for most passive investors, the options are all pretty vanilla across the (online-broker) board.

1. That is precisely why you remain insured. for unlikely scenarios. It is a simple step to take.

2. .5% - 1% off on investments is not a minor benefit. The system is automatic and takes no time to maintain. Your other points seem to be off the mark.

3. Monex introducing DRIP with American ETFs was definitely one example of a recent unique change. I would hope competition forces everyone else to adapt. Especially when it comes to Rakuten lowering their Vanguard wrap fees.

[ToushiTime]

1. Ensuring you have the 1000万 coverage across 2 or 3 accounts.

Are you implying that the insurance coverage per person is 10m for all of their accounts combined or for each of their accounts?

For comparison, the bank deposit insurance scheme is "¥10 million plus accrued interest thereon per depositor per financial institution." https://www.dic.go.jp/content/000010138.pdf

The JIPF site https://jipf.or.jp/en/introduction/index.html just says "In the event that, for some reason, customer assets cannot be returned smoothly from a bankrupt securities firm" in the singular.

I don't see anywhere that it is capped at 10 million for all brokerage claims per person.

[EmaxisSlim Cultist]

1. Ensuring you have the 1000万 coverage across 2 or 3 accounts.

Are you implying that the insurance coverage per person is 10m for all of their accounts combined or for each of their accounts?

For comparison, the bank deposit insurance scheme is "¥10 million plus accrued interest thereon per depositor per financial institution." https://www.dic.go.jp/content/000010138.pdf

The JIPF site https://jipf.or.jp/en/introduction/index.html just says "In the event that, for some reason, customer assets cannot be returned smoothly from a bankrupt securities firm" in the singular.

I don't see anywhere that it is capped at 10 million for all brokerage claims per person.

Per account. Nomura spells it out. https://www.nomura.co.jp/guide/system/payoff/. However, I do not trust my Japanese to parse this legalese.

「“ペイオフ”が解禁された…」といった記事やニュース解説を、見聞きした方もいらっしゃると思います。ペイオフ（pay off、支払うの意）とは、本来、預金保険金の支払いのことをいいますが、「ペイオフの解禁」という言葉が使われるときには、全額保護が終了し、「1,000万円を超える預金は保護されない」ということを“ペイオフ”と捉えているようです。
また、いわゆるペイオフの解禁の後は、ペイオフとは預金者に対し、預金保険機構から保険金を直接支払うことをいいます。金融機関が破たんした場合の預金者保護の方法の1つです。「1,000万円を超える預金はすべて保護されなくなる」と思われている方もいらっしゃるようです。確かに現在では、1,000万円を超える預金者に対して負担が求められることになりましたが、全く払い戻されないということではなく、つぎに紹介する「預金等債権の買い取り」等により、破たん金融機関の財産の状況に応じて支払いを受けることができます。

The risks are obviously very low, but accounts are free, so it does not cost you anything to diversify.

[ToushiTime]

Per account. Nomura spells it out. https://www.nomura.co.jp/guide/system/payoff/. However, I do not trust my Japanese to parse this legalese.

「“ペイオフ”が解禁された…」といった記事やニュース解説を、見聞きした方もいらっしゃると思います。ペイオフ（pay off、支払うの意）とは、本来、預金保険金の支払いのことをいいますが、「ペイオフの解禁」という言葉が使われるときには、全額保護が終了し、「1,000万円を超える預金は保護されない」ということを“ペイオフ”と捉えているようです。
また、いわゆるペイオフの解禁の後は、ペイオフとは預金者に対し、預金保険機構から保険金を直接支払うことをいいます。金融機関が破たんした場合の預金者保護の方法の1つです。「1,000万円を超える預金はすべて保護されなくなる」と思われている方もいらっしゃるようです。確かに現在では、1,000万円を超える預金者に対して負担が求められることになりましたが、全く払い戻されないということではなく、つぎに紹介する「預金等債権の買い取り」等により、破たん金融機関の財産の状況に応じて支払いを受けることができます。

That section you pasted is about the Pay-off system i.e the 預金保険制度 that protects deposits at banks and trust banks.
The bottom of the same page discusses 投資者保護基金 which covers investment assets, but I don't see it specifying per firm/account. It just says per customer.

It would be nice to see it spelled out somewhere as 10m per account/firm.

The English translation of the JIPF site, which I linked to above, seems to imply per account.
And the Pay-off system for banks is 10m per bank account.

So, like you, I work on the assumption it is coverage per account.

As someone else noted, hacking is more scary than brokerage bankruptcies.

[Tolmekian]

Maybe I should ask this in a separate SMBC Prestia Trust thread as it seems more specific to my bank, but I'll ask here first in case anyone has first hand experience.

Is there a way to make automatic monthly investment with SMBC Prestia Trust bank? Pretty much every app (rakuten securities, paypay, line, etc.) only supports linking regular SMBC as far as I know, but Prestia is my main account that salary is paid into. Maybe I should try selecting Citibank as that's what Prestia formerly was?

I was declined from Rakuten bank this week so using money sweep, rakuten cc, etc. isn't an option.

[EmaxisSlim Cultist]

Point 1 - Rakuten CC and Rakuten bank are not directly related. Apply for the credit card still. Many members were denied for the bank but approved for the card. The card is very easy to get relative to other Japanese cards.

Point 2 - SMBC seems to be listed as supported. Any reason to suspect it would not be? (see attached.)

They mention they have a relationship with Prestia specifically for foreign currency. https://www.rakuten-sec.co.jp/web/servi ... nsfer.html

[Tolmekian]

Point 1 - Rakuten CC and Rakuten bank are not directly related. Apply for the credit card still. Many members were denied for the bank but approved for the card. The card is very easy to get relative to other Japanese cards.

Point 2 - SMBC seems to be listed as supported. Any reason to suspect it would not be? (see attached.)

They mention they have a relationship with Prestia specifically for foreign currency. https://www.rakuten-sec.co.jp/web/servi ... nsfer.html

wasy.jpg

Many thanks for the reply.

1) I'll look into Rakuten CC separately then . Although, I think there's a maximum monthly limit of 50K on CC so a bank transfer would be preferred.

2) SMBC is listed, but this is actually entirely separate to SMBCTB (Prestia / SMBC Trust Bank). For instance when inputting the branch number and account number, it will not find you as branch 001 on SMBC is different to branch 001 on SMBCTB. Totally different databases unfortunately, and it seems SMBCTB is just always forgotten about!

Interesting to see the foreign currency exchange setup between Rakuten Sec and SMBCTB is documented, but I just want to deposit JPY for this.

[zeroshiki]

I have Prestia (got it when it was still Citibank) and I've never gotten it to work with these things. They're never on the list and doing it manually is too much hassle. I always had to resort to using my SMBC account or my recently created Rakuten Bank account.