Key Takeaways
- • According to data from the Financial Supervisory Service provided to lawmaker Park Hong-bae's office, 74.62% of clients at Korea's top 10 comprehensive securities firms show an aggressive investment propensity of risk-neutral (Grade 3) or higher, with 13,332,200 of 17,685,779 graded individuals classified as aggressive investors.
- • Securities firm IRP assets fell 4.4% to 59.1693 trillion won at the end of Q3, a 2.7207 trillion won decline, roughly double the 2.17% decline at 10 banks over the same period.
- • Industry players expect a second large-scale pension fund transfer as the government moves to gradually ease the 70% cap on risk assets in retirement pension accounts.
- • Samsung Securities leads in aggressive-client share at 80.7%, followed by Daishin Securities (67.7%) and Mirae Asset Securities (56.7%).
- • Kiwoom Securities was the only firm among the top 10 to grow DC and IRP assets in Q3, adding 108.3 billion won (166.9%) after its pension business launch.
Summary
Securities firms in Korea are positioning for a potential second wave of pension fund transfers as regulators prepare to relax the cap on risk assets in retirement pension accounts. According to data submitted by the Financial Supervisory Service to the office of Democratic Party of Korea lawmaker Park Hong-bae, 74.62% of clients at the top 10 comprehensive financial investment business operators fall into the risk-neutral (Grade 3) category or more aggressive tiers. Of 17,685,779 individuals who underwent investment risk propensity grading, 13,332,200 were classified as aggressive investors willing to accept potential principal loss in pursuit of medium-to-high returns.
By grade, growth-seeking type (Grade 2) was the most common at 30.95%, followed by risk-neutral type (Grade 3) at 21.84% and growth type (Grade 1) at 21.83%. Conservative profiles accounted for roughly one-quarter of clients, with stability-pursuing type (Grade 4) at 14.83% and stability-seeking type (Grade 5) at 10.54%. Aggressive shares varied by firm: Samsung Securities (80.7%), Daishin Securities (67.7%), Mirae Asset Securities (56.7%), KB Securities (53.9%) and Hana Securities (53.6%) led the group on combined Grade 1 and 2 shares.
The industry's interest in regulatory change stems from pension asset outflows in the third quarter. Currently, up to 70% of IRP assets may be invested in risk assets, but the government has decided to ease this cap gradually as part of its retirement pension improvement plan. According to the Financial Supervisory Service's pension portal, IRP assets at 10 securities firms totaled 59.1693 trillion won at the end of the third quarter, down 2.7207 trillion won (4.4%) from the prior quarter, compared with a 2.17% decline at 10 banks. Combined DC and IRP assets fell 2.78% at securities firms versus 2.54% at banks. Mirae Asset Securities lost 1.6712 trillion won (3.6%), while Daishin Securities (5.76%), Hanwha Investment & Securities (4.59%), NH Investment & Securities (4.12%) and KB Securities (4.05%) posted declines above 4%.
Kiwoom Securities, which fully launched its pension business in June of last year, was the sole firm to record growth, with DC and IRP assets rising 108.3 billion won (166.9%). Industry participants also welcomed the proposed inclusion of Integrated Margin Account (IMA) and commercial paper, both funding channels for comprehensive securities firms, as eligible pension investment targets, and a plan to evaluate default option products based on yield. A securities industry official said the plan "will significantly enhance the product appeal of contract-based IRPs," adding that pension subscribers would gain a wider range of product choices.
By grade, growth-seeking type (Grade 2) was the most common at 30.95%, followed by risk-neutral type (Grade 3) at 21.84% and growth type (Grade 1) at 21.83%. Conservative profiles accounted for roughly one-quarter of clients, with stability-pursuing type (Grade 4) at 14.83% and stability-seeking type (Grade 5) at 10.54%. Aggressive shares varied by firm: Samsung Securities (80.7%), Daishin Securities (67.7%), Mirae Asset Securities (56.7%), KB Securities (53.9%) and Hana Securities (53.6%) led the group on combined Grade 1 and 2 shares.
The industry's interest in regulatory change stems from pension asset outflows in the third quarter. Currently, up to 70% of IRP assets may be invested in risk assets, but the government has decided to ease this cap gradually as part of its retirement pension improvement plan. According to the Financial Supervisory Service's pension portal, IRP assets at 10 securities firms totaled 59.1693 trillion won at the end of the third quarter, down 2.7207 trillion won (4.4%) from the prior quarter, compared with a 2.17% decline at 10 banks. Combined DC and IRP assets fell 2.78% at securities firms versus 2.54% at banks. Mirae Asset Securities lost 1.6712 trillion won (3.6%), while Daishin Securities (5.76%), Hanwha Investment & Securities (4.59%), NH Investment & Securities (4.12%) and KB Securities (4.05%) posted declines above 4%.
Kiwoom Securities, which fully launched its pension business in June of last year, was the sole firm to record growth, with DC and IRP assets rising 108.3 billion won (166.9%). Industry participants also welcomed the proposed inclusion of Integrated Margin Account (IMA) and commercial paper, both funding channels for comprehensive securities firms, as eligible pension investment targets, and a plan to evaluate default option products based on yield. A securities industry official said the plan "will significantly enhance the product appeal of contract-based IRPs," adding that pension subscribers would gain a wider range of product choices.
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