Securities firms go all-out to attract more retirement pension customers

The Korea Times

The Korea Times

Finance

Sat, December 9, 2023 | 08:35

Markets

Securities firms go all-out to attract more retirement pension customers

Posted : 2023-04-21 16:56

Updated : 2023-04-23 13:54

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By Lee Min-hyung

Securities firms here are going all-out to attract more retirement pension customers amid falling deposit interest rates and an aging population.

According to data from the Financial Supervisory Service, the total for retirement pensions at financial firms including banks, insurers and securities firms, amounted to 336 trillion won ($253 billion) as of the end of 2022. The figure has doubled in the last six years. More people are forecast to deposit their money in retirement pension funds at least for the next few years, as the rate hike cycle nears its end as well as the fact that the deposit interest rate is unlikely to rise further.

Banks have long been major players in managing retirement pensions, but major securities firms here are moving to enhance their competitiveness in the market.

In January, Samsung Securities opened three new pension centers across the nation, as part of efforts to strengthen its retirement pension service.

Among brokerage houses, Mirae Asset Securities is the most proactive player in attracting more retirement pensions. The company established its retirement pension division in 2005 and launched a pension asset management center in 2018. More than 30 private bankers work at its flagship Yeouido branch in Seoul. Mirae Asset offers diverse retirement pension services, such as its personalized robot advisor consulting service.

Mirae Asset Securities' retirement pension is worth 20.9 trillion won as of the end of the first quarter of this year. However, it is notable to recognize the rapid rise of the figure. The company has surpassed Woori Bank's total during the same period, and is now the sixth-largest retirement pension fund manager in the local financial market.

Samsung Life Insurance topped the list with 44.5 trillion won, followed by Shinhan Bank and KB Kookmin Bank. Hana Bank came in fourth and the Industrial Bank of Korea (IBK) was the fifth-largest player in the market.

"The retirement pension market can still be seen as a fresh growth area from the perspective of securities firms, as their portion there falls far short of banks and insurers," an industry source said. "More brokerage houses will seek to expand their presence there amid Korea's aging population."

mhlee@koreatimes.co.kr