Kiwoom Securities, recognized as a retail powerhouse, holds approximately 25% market share in the retail sector, maintaining its position as the top player in South Korea for 21 consecutive years. However, its focus on retail has been seen as a weakness due to a lack of diversity in its revenue portfolio.
Now, Kiwoom is venturing into a new area. As the 47th retirement pension provider in South Korea, it plans to enter the 500 trillion won retirement pension market starting in June. The company aims to leverage its retail strengths to compete in the online retirement pension platform market, with a goal of achieving a 10% market share in the retirement pension sector within the next decade. The industry is closely watching to see if Kiwoom's entry will disrupt the market.
On May 28, Kiwoom Securities held a press conference at TP Tower in Yeouido, Seoul, to unveil its roadmap for entering the retirement pension market. CEO Eom Joo-sung stated, "We will enhance our customers' long-term asset returns through bold fee innovations, reflecting our philosophy that Kiwoom can only grow if our customers grow."
Kiwoom will officially launch its retirement pension business on June 1. The company plans to establish its own performance benchmarks for retirement pension returns and will not charge management fees if these benchmarks are not met. The target return rate is currently being considered to be slightly above deposit interest rates.
Additionally, Kiwoom will waive management and asset management fees for the first year across all retirement pension schemes, including defined benefit (DB) and defined contribution (DC) plans, in line with the government's policy to reduce fee burdens and to accelerate the acquisition of initial subscribers.
The company is also focusing on expanding its product lineup. Song Soo-yeol, head of the pension consulting team, noted, "We have secured a higher number of principal-protected products compared to other providers and have registered retirement pension funds and performance-based products based on our existing fund lineup. We have also registered most ETFs available from other providers."
This strategy targets the retirement pension asset transfer system implemented last year. The transfer process can be cumbersome if the products in existing retirement accounts are not available with the new provider, requiring liquidation and cash conversion. Kiwoom aims to minimize these inconveniences to enhance its competitiveness in attracting new clients transferring their savings from banks and insurance companies to securities firms.
For the first time, Kiwoom will offer foreign RP products to all retirement pension clients, including individuals and corporations. The company plans to gradually introduce a variety of products, starting with foreign RP, followed by bonds and ELS based on asset sizes, leveraging the regulatory allowance for foreign investments in retirement pensions.
Kiwoom has worked to ensure that the platform environment enjoyed by existing stock trading clients is extended to retirement pensions. The system allows for real-time trading of retirement pension ETFs within the same framework as stock trading, addressing previous inconveniences such as needing to transfer funds to a separate account or difficulties in checking real-time transaction balances.
The company has also strengthened its non-face-to-face processing system. A dedicated web system has been established to allow corporate clients to handle everything from enrollment to deposits and benefit payments online without the need for complex paperwork or seals.
Kiwoom Securities believes that changes in the retirement pension market will favor online platform providers. Historically, corporate sales relied heavily on branch networks, but with the market expanding and the proportion of individual investors increasing, the influence of online platforms is growing.
Byun Young-dae, head of the pension platform division, stated, "The retirement pension market has surpassed 500 trillion won in accumulated funds and is transitioning from a phase of quantitative growth to qualitative competition. As trends in pension investments spread and the asset transfer system is implemented, the capabilities of online investment platforms will become increasingly important."
Kiwoom Securities has set a goal of achieving a 10% market share in the retirement pension sector within the securities industry by 2035 and aims to rank among the top five based on accumulated funds. As of the end of the first quarter of this year, Mirae Asset Securities led the market with 42.44 trillion won, followed by Samsung Securities (23.27 trillion won), Korea Investment & Securities (22.59 trillion won), Hyundai Motor Securities (18.86 trillion won), NH Investment & Securities (10.75 trillion won), and KB Securities (8.90 trillion won).
Byun added, "The retirement pension market is expected to grow to 1,200 trillion won by 2035. In our first year of entry, we will focus on stabilizing the business while leveraging Kiwoom's retail strengths to achieve our long-term goals."
* This article has been translated by AI.
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