Stands out as broader securities sector sees pension reserves shrink

MTS platform and ETF convenience drive growth

75% of IRP reserves transferred from rival firms

[Provided by Kiwoom Securities]
[Provided by Kiwoom Securities]

Kiwoom Securities' retirement pension reserves surpassed 200 billion won ($150 million) roughly five months after the firm entered the market, as the brokerage leverages its mobile platform and ETF-focused investment tools to carve out a position in the pension sector.

Kiwoom Securities announced Monday that reserves have grown rapidly since it formally launched its retirement pension business in June, crossing the 200 billion won mark.

South Korea's retirement pension system allows companies to entrust employee severance funds to financial institutions, where workers can invest the money in various products and receive the proceeds as a pension or lump sum upon retirement.

Kiwoom Securities' pension reserves rose from 64.9 billion won at the end of June to 188.2 billion won at the end of September — an increase of 123.3 billion won in roughly three months. That growth stands in contrast to the broader securities sector, where total retirement pension reserves fell 2.88% quarter-on-quarter over the same period.

The firm attributes the momentum to its existing investment platform. Kiwoom Securities has integrated the digital capabilities built through its domestic stock trading platform into its pension service, allowing subscribers to trade a wide range of investment products through their pension accounts via the mobile trading system Yeongungmun S#.

In fact, about 75% of assets in Kiwoom Securities' individual retirement pension accounts were transferred from other financial institutions, indicating that inflows from existing pension holders — not just new sign-ups — have underpinned the reserve growth.

Kiwoom Securities is paying close attention to a broader trend in which pension subscribers are taking a more active role in choosing their financial provider and investment products. The firm says product variety and ease of trading are emerging as key competitive factors for pension providers.

In the defined-contribution pension market, Kiwoom Securities is also expanding subscriber choice by operating a service that lets workers request their employer adopt Kiwoom Securities as its pension provider, giving subscribers a voice in the company's selection process.

Going forward, Kiwoom Securities plans to strengthen its investment product lineup and digital service capabilities, and to progressively enhance its end-to-end offering — from pension asset accumulation and management through to payout.

"Surpassing 200 billion won in reserves in such a short time since launch reflects customers' attention to Kiwoom Securities' investment environment and the convenience of managing pension assets," said Pyo Young-dae, head of Kiwoom Securities' pension platform division. "We will strengthen the environment for subscribers to manage their pension assets proactively and provide a service that accompanies them from asset accumulation all the way through to receipt."


kacew@heraldcorp.com