The Korea Financial Investment Association (KOFIA) turned to a loss last year despite collecting more membership fees from member firms such as securities companies. The increase was largely due to a sharp rise in labor costs from higher base wages and retroactive payments related to past base wages.
According to KOFIA's "2025 business report and settlement of account report" on the 26th, the association's net income for the year came to minus (-) 4.1 billion won. Compared with a profit of 4.7 billion won in 2024, revenue fell by 8.8 billion won, swinging to a loss.
Looking at the revenue side equivalent to sales, KOFIA collected more membership fees (assessments) from member firms last year. The association's membership fee revenue last year was 57 billion won, up 1.5 billion won from the previous year's 55.5 billion won.
Each year, KOFIA sets its one-year budget through the board of directors and the general meeting, and member firms pay the assessed fees based on their equity capital and operating profit. Last year, the association had 409 regular members, including securities companies, asset management companies, futures companies, and trust companies, and 155 associate members, including investment advisory firms, banks, and insurers, for a total of 592.
However, with the maturity of outsourced chief investment officer (OCIO) funds and other factors, non-operating income such as interest and dividends plunged by 7.1 billion won, and total revenue (75.3 billion won) fell by 5.9 billion won from a year earlier.
While revenue was declining, expenses increased further. The association's total expenses last year were 79.4 billion won, up 2.9 billion won from 76.5 billion won a year earlier.
Labor costs had the biggest impact on the increase in expenses. Personnel expenditure last year was 31.7 billion won, up 1.9 billion won from 29.8 billion won the previous year.
The rise in base wages led to higher overtime pay and retirement benefits. In addition, a one-time retroactive payment of 3.8 billion won related to the base wage agreement was recognized all at once as a non-operating loss, sharply lifting expenses.
One-off expenditure from the base wage issue combined with fixed-cost wage hikes, resulting in a loss that outstripped the increase in membership fee revenue paid by member firms.
To cover the 4.1 billion won deficit last year, the association transferred 4.3 billion won from its internally accumulated general business purpose reserve. The remaining 200 million won was set aside as a reserve for responsibility for electronic financial incidents.