There are said to be securities firms that make more money than banks. The shift of individual retirement pension (IRP) accounts to securities firms has already become routine. The emergence of new products, including the individual money account (IMA), is no longer favorable to banks.
Ham Young-joo, chairman of Hana Financial Group, cited the outflow of retirement pension funds as one of the crises facing banks in this year's New Year's address. Customers who signed up for bank retirement pension products are moving their accounts to securities firms that are posting higher returns.
According to the Financial Supervisory Service's retirement pension comparison disclosure on the 10th, as of the end of September last year, the retirement pension reserves of 12 banks stood at 241.04 trillion won, up 2.32% from the previous quarter (235.56 trillion won). Over the same period, the reserves of 14 securities firms rose from 112.61 trillion won to 119.72 trillion won, an increase of 6.32%.
Retirement pensions are divided into the defined benefit (DB) type, in which the future severance pay is fixed, the defined contribution (DC) type, in which workers invest directly with their reserves to grow their severance pay, and the IRP, which workers join and manage individually. In DC and IRP, the severance pay varies depending on investment results.
Recently, the DC and IRP types, which accept the possibility of loss and pursue higher returns, have gained popularity over the DB type that guarantees principal. In particular, more workers are choosing DC and IRP at securities firms that sell exchange-traded funds (ETFs).
Since October 2024, when the system for physically transferring retirement pensions to another financial institution without closing the account was introduced, a total of 5.1 trillion won had moved by the end of June last year. During this period, banks saw net outflows of 450.1 billion won from DC and 734.6 billion won from IRP, while securities firms recorded net inflows of 522 billion won into DC and 783.5 billion won into IRP.
Securities firms also hold the edge in long- and short-term returns. As of the end of September last year, banks' average one-year return for DC was 5%, about half that of securities firms (10.17%), and banks' IRP return during the period was 6.24%, lower than securities firms' 10.57%. As of the end of September last year, the three-, five-, seven- and 10-year annualized returns for DB, DC and IRP were also higher at securities firms than at banks.