As financial authorities put the brakes on securities firms' excessive overseas stock transaction promotions, the industry's marketing firepower is rapidly shifting to ISAs (individual savings accounts) and pension products.
According to the financial investment industry on the 12th, Mirae Asset Securities decided to extend for one more year, through the end of this year, the preferential online stock trading fee benefits for the non-face-to-face product "Direct brokerage-type ISA" and for pension savings accounts. As a result, investors will pay only 0.0036%, the level of related-agency fees, instead of the standard fee of 0.139%. The strategy is to tout virtually "zero fees" to secure long-term investment funds.
Firms currently running preferential fee promotions include Mirae Asset Securities, Samsung Securities, KB Securities, Shinhan Investment, and Korea Investment & Securities Co. Samsung Securities (0.0036396%), KB Securities (0.0044792%), and Shinhan Investment (0.0036396%) offer lifetime preferential fees only to customers who open a brokerage-type ISA account this year.
In the case of Korea Investment & Securities Co., when opening an ISA account it offers the online domestic stock trading fee at 0.0031833%, the lowest level in the industry. However, the promotion period is relatively short, running until Feb. 28. Also, for trades executed on or after Feb. 13, a 0.0036396% rate applies.
The ISA market is expanding rapidly on the back of a "tax-saving boom." According to the Korea Financial Investment Association, as of the end of November last year, the number of subscribers stood at 7.19 million, with inflows reaching 4.65 trillion won. In particular, the growth is brisk, with 1 million new subscribers added in just nine months after surpassing 6 million in Feb. last year.
In particular, subscribers to brokerage-type accounts, where investors select stocks themselves, number 6.137 million, accounting for 85.4% of the total. As subscriptions to trust-type and discretionary-type accounts mainly handled by banks decline, this is also why funds are flocking to securities firm ISA accounts. ISAs have the advantage of taxing only net profits after offsetting gains and losses within the account. Under the general type, up to 2 million won (4 million won for the low-income type) is tax-exempt, and any excess is subject to a separate 9.9% tax.
In the securities industry, marketing competition to secure long-term customers is also active, such as recognizing double the transfer amount when moving ISA funds to another firm or to a pension account (IRP or pension savings) after maturity and offering benefits. Kiwoom Securities is running a promotion through the end of March this year in which customers who transfer their ISA account from another firm can receive up to 1 million won in gift certificates, with twice the transferred amount counted as deposits when calculating net deposits. In addition, all new account openers and customers transferring from other firms receive a 10,000-won gift certificate.
However, as preferential fees and in-kind promotions surge across securities firms, there are considerable concerns that competition to attract customers has overheated. In particular, with the Financial Supervisory Service recently urging firms to refrain from overseas stock marketing due to exchange-rate volatility and other reasons, there are worries that a balloon effect could concentrate marketing firepower on domestic stocks and pension products.
Earlier, at the end of 2024, when securities firms ran net-deposit promotions bundling personal pension savings products and individual retirement pensions (IRPs) and offered prizes far exceeding the 30,000-won limit for retirement pension giveaways, the Financial Supervisory Service put the brakes on, saying it could be seen as inducing IRP enrollment. In response, Samsung Securities and Mirae Asset Securities ended the related promotions early.
A securities industry official said, "At the start of the year, many ISA maturity funds are converted into pensions, and as transfers of pensions from other firms and contribution demand increase significantly, related promotions are actively appearing," adding, "Because it is an opportunity to 'lock in' long-term customers, competition among securities firms is fierce."