Kiwoom Securities apologized for the 'transaction delay incident' and decided not to charge domestic stock transaction fees for five trading days. This means it forfeited about 6.5 billion won in revenue. With several customers expressing dissatisfaction with the compensation process, it has become crucial to see if the fee waiver event can prevent customer attrition.
According to the financial investment industry on the 12th, Kiwoom Securities will not charge transaction fees for items including KOSPI, KOSDAQ, and KONEX market stocks, as well as exchange-traded funds (ETFs), exchange-traded notes (ETNs), and equity-linked warrants (ELWs) from the 14th to the 18th. During this period, customers using Kiwoom Securities' home and mobile trading systems (HTS and MTS) only need to pay the related agency fee (0.0036396% based on the Korea Exchange).
Kiwoom Securities generated a total of 369.7 billion won in domestic stock commission revenue last year. Taking into account that the market was open for 245 trading days, it earned about 1.3 billion won per day. It is estimated that Kiwoom Securities will forfeit about 6.5 billion won due to the commission-free event over these five trading days.
On the 3rd and 4th of this month, there were issues with delayed stock order processing on the Kiwoom Securities trading system for two consecutive days. This was due to a surge in transaction volume caused by the U.S. government's tariffs under Donald Trump and the impeachment trial of former President Yoon Suk-yeol. Kiwoom Securities suspended services for system checks over the weekend (5th and 6th) and announced a commission-free event on the 8th as a gesture of apology.
The main reason Kiwoom Securities decided on the free event is to prevent the attrition of individual investors, who are core clients. Kiwoom Securities had maintained a market share of about 30% of individual investors in domestic stocks and has held the number one position. However, as retail competition has intensified recently, the number of active accounts (accounts with cumulative transactions exceeding zero over the last six months) has continued to decline. This, combined with the transaction delay issue, has increased the need to appease customers.
Kiwoom Securities is proceeding with the compensation process separately from the commission-free event. There are over 400 compensation demands posted on the customer bulletin board on the website. It is reported that the actual number of customers demanding compensation is even higher.
The issue is that the compensation is based on 'log records.' Some investors claim, 'Since orders were not processed on time, there may be a discrepancy between the log records and the actual order time,' adding, 'Relying solely on log records to determine compensation amounts to a trick to avoid compensating by Kiwoom Securities.' As demands for compensation are piling up, many customers who have yet to receive contact are expressing frustration.
Kiwoom Securities has stated that it will finalize the compensation procedure as quickly as possible. A Kiwoom Securities representative noted, 'We are contacting customers who have filed complaints in order,' and added, 'The objective compensation criteria are based on log records, and we will do our best to proceed with the compensation process based on this.'