Recently, the rapid growth of the exchange-traded fund (ETF) market has led to an increase in related financial complaints, prompting the Financial Supervisory Service (FSS) to issue a warning to investors.
On May 21, the FSS shared key consumer warnings based on major complaint cases arising from ETF investments through specific money trusts, individual savings accounts (ISA), and pension savings accounts.
According to the FSS, complaints related to ETF investments have consistently been raised regarding fees, available investment options, trading timing, and automatic sell services.
The FSS noted that when investing in ETFs through pension savings accounts, significant differences in trading fees can occur depending on how the account is opened. Complaints have been received indicating that fees for trading ETFs can be up to ten times higher when accounts are opened at brokerage branches compared to those opened online. Typically, trading fees for ETFs in online accounts range from 0.01% to 0.015%, while fees for branch-opened accounts can reach 0.10% to 0.20%, with some even as high as 0.4% to 0.5%.
Additionally, there have been complaints that bank branch employees did not adequately explain the potential for additional costs beyond trading fees. The FSS explained that when investing in ETFs through specific money trusts, in addition to trading fees (around 0.1%), trust fees (ranging from 0.03% to 2.0%) and early redemption fees (from 0.00% to 1.0%) may also apply.
Another consumer warning highlighted the limitations on available ETF options during the transfer process of ISA accounts. The FSS stated that bank ISAs have a more restricted selection of ETFs compared to those at brokerage firms, and the available options may vary by bank. Therefore, investors should verify the availability of their desired ETFs before transferring their ISAs.
Complaints have also arisen regarding the timing of ETF trades. Unlike brokerage firms, banks do not allow real-time trading of ETFs, which can lead to discrepancies between the estimated value confirmed by investors and the actual execution price. The FSS urged investors to confirm the timing of actual transactions when entering into buy or sell agreements for ETFs.
Regarding automatic sell services, complaints have been reported about target profit rates being set without the investor's input and actual returns being lower than the target rates. The FSS emphasized the need for investors to verify their participation in automatic sell services and the settings for target profit rates when investing in ETFs through specific money trusts.
Investors should be aware that when investing in ETFs through specific money trusts, additional trust fees and early redemption fees may apply, in addition to trading fees.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.