Samsung Asset Management, the top corporation in the domestic asset management industry, has come under scrutiny for using exaggerated expressions in advertisements for its Exchange-Traded Funds (ETFs), leading to the deletion of the related phrases following a warning from the Korea Financial Investment Association. Some critics suggest that an industry leader, which should prioritize market trust, has stimulated overheated competition. (Related article☞[Exclusive] Samsung Asset Management deletes exaggerated advertising phrases for 'additional dividends'... Korea Financial Investment Association 'caused confusion among investors')
According to the financial investment industry on the 28th, Samsung Asset Management faced controversy for using phrases that could mislead investors into thinking they could receive 'additional dividends' in addition to the existing dividends while promoting its ETF, 'KODEX U.S. S&P 500', and others.
The advertisements contained explanations that purchasing the product before the dividends payment date could yield additional profits. The ETF was originally operated on an automatic reinvestment (Total Return) basis but transitioned to a quarterly dividends method (PR) at the end of January, April, July, and October following amendments to the income tax law earlier this year. Samsung Asset Management has announced plans to distribute the retained dividends from the ETFs previously managed on the Total Return basis in the form of dividends over 15 quarters until January 2029.
The issue lies in the expression of the previously reinvested dividends as 'additional dividends'. Since the retained profit has already been reflected in the price of the ETF purchased by investors, it amounts to mere 'getting back one's own money' for new investors.
Some competing asset management firms raised concerns, and the Korea Financial Investment Association determined that the advertisement could mislead investors into thinking there were separate economic benefits, and conveyed this position to Samsung Asset Management. In response, Samsung Asset Management fully removed the problematic expressions from its website and YouTube.
Industry insiders believe that Samsung Asset Management made a mistake while trying to emphasize revenue or benefits amid intensified market share competition. Critics indicated that this marketing strategy contradicts the conservative image of the Samsung Group, which does not engage in reckless maneuvers.
Meanwhile, Samsung Asset Management acknowledged that it did receive feedback from the Korea Financial Investment Association but stated that it had already decided to take down the advertisement and videos on its own before the contact from the association. They received contact from the Korea Financial Investment Association in the afternoon of the 25th but had already removed the advertisement and the video that morning. A representative from Samsung Asset Management explained, "The compliance team said there might be misunderstandings in the advertisement and video, so we made corrections."
However, a source familiar with the situation noted, "I understand that the Korea Financial Investment Association acted early on the 25th."