TOKYO (Reuters) - Japan's Nomura Holdings Inc 8604.T aims to leverage its access to about 1.6 million members of employee stock ownership plans to tap a new generation of customers as its client base grays.

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The country’s largest brokerage is administrator for about 60 percent of people in such plans at listed companies, and can do more to engage with them, Nomura Securities President Toshio Morita told Reuters in an interview.

Nomura aims to recruit younger plan members by boosting web and phone access to information on its products, Morita said. That could help it secure long-term clients, manage more assets and generate stabler revenue sources.

“Until now, we’ve relied on these people coming to us after retirement or visiting our branches,” said Morita, Nomura Securities chief from this month. “We’ll connect with them by phone and online, enriching the way we provide information.”

Thirty- and forty-somethings are crucial for Nomura - and peers including Daiwa Securities Group Inc 8601.T and SMBC Nikko Securities Inc - to build a new generation of clients as Japan's population shrinks.

Younger generations are often tech-savvy but lack investment experience and tend to choose low-cost internet securities firms like SBI Holdings Inc 8473.T, online brokerages said.

As of March last year, 2.6 million people owned shares worth 4.7 trillion yen ($43.2 billion) through employee stock ownership plans, Tokyo Stock Exchange data showed.

Nomura is administrator for 1.6 million people, according to Reuters calculations based on a 60 percent share.

Nomura’s domestic-focused retail arm has suffered since 2014 as investor optimism at government reflationary policies was replaced by concern over negative interest rates and the failure to end deflation.

In April-December, Nomura’s pretax profit plummeted nearly 60 percent year-on-year, compounding a one-third decline from 2014 through 2016. In the same periods, Daiwa’s profit fell 63 percent and 40 percent respectively.

The gloomy results come as Nomura shifts its focus to earning recurring revenue via consulting services and managing assets, rather than commission from securities. The brokerage aims to cover 50 percent of costs via recurring revenue by 2020.

Analyst Hideyasu Ban at Morgan Stanley MUFG Securities said cuts to the retail division’s cost base may be necessary to complete the transformation.

As of December, Nomura employed some 16,450 people in Japan. It had 158 branches, unchanged since 2013.

Morita, however, said he intends to boost resilience to stock market swings through the new business model.

“I’m always thinking of how to reduce costs,” he said. “But I’m not thinking of cuts to staff numbers.”

($1 = 108.8200 yen)