Geopolitical tensions in the Middle East have fueled volatility in South Korea’s stock market, prompting even typically conservative bank customers to look at investment products. As more investors try to buy after sharp declines in hopes of a rebound, bank counters and private-banking centers have seen a rise in inquiries about funds and exchange-traded funds, or ETFs.
On March 8, the financial industry said demand for investment consultations and product sign-ups has noticeably increased at banks as swings in the Kospi have grown. Customers who had focused on safer assets such as savings deposits are increasingly viewing market sell-offs as a chance to buy at lower prices, banks said.
Branch visits have climbed particularly among older customers who are less comfortable using mobile apps. Some branches have seen customers arrive with cash ranging from tens of millions of won to, in some cases, hundreds of millions of won to ask about signing up for products, reflecting demand for in-person advice during a steep downturn.
At the four major banks — KB Kookmin, Shinhan, Hana and Woori — ETFs sold in trust form totaled 7.3351 trillion won in January and 8.2819 trillion won in February, for a combined 16.8450 trillion won, according to the industry. The figures marked record highs for two straight months. Sales in January and February last year were under 1.5 trillion won, meaning the total rose more than tenfold in a year. This month, the Kospi fell sharply for two consecutive days on March 3 and 4 amid the Middle East situation, but banks still sold 1.2279 trillion won of ETFs over that period.
Banks attribute much of the increase to a surge in demand from middle-aged and older customers. Younger investors who are used to trading stocks tend to buy and sell ETFs through brokerage apps, while older, wealthier clients often prefer to select products with help from private bankers and purchase them through banks, industry officials said.
The rush has also created bottlenecks online. For some fund products and ETF-linked trust products, non-face-to-face sign-ups require a video call to explain investment risks, and heavy demand has led to waits of 30 minutes to more than an hour in many cases.
A private-banking official at one bank said, “High-net-worth clients at banks used to focus on tax strategies or stable asset allocation, but recently there has been a clear move to look for investment opportunities that take advantage of market volatility.” The official added, “Some customers often move funds in the hundreds of millions of won to sign up for investment products.”
Banks cautioned, however, that investors should avoid overextending themselves while uncertainty remains high. A banking industry official said inquiries have surged, but “given concerns about short-term volatility, decisions should fully consider investment goals and risk tolerance.”
* This article has been translated by AI.
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