As South Korea’s retirement pension market has exceeded 500 trillion won, brokerages are moving to strengthen their pension platforms. They link asset checks and investment on mobile and support tailored consultations and management of pension payouts.

Korea Investment & Securities on Tuesday held a briefing at TP Tower in Seoul’s Yeouido district and demonstrated its revamped mobile trading system (MTS) pension service.

Korea Investment & Securities plans to expand a pension platform that supports the entire retirement preparation process from contributions to management and payouts. It plans to analyse subscriber data to suggest next-step management measures. It also plans to link private banker (PB) consultations for individual clients and services from its corporate finance and corporate sales divisions for corporate clients.

Brokerages are strengthening pension services as the market grows and investment methods change. The Ministry of Employment and Labor and the Financial Supervisory Service said retirement pension reserves stood at 501.4 trillion won at the end of last year, up 69.7 trillion won from a year earlier.

The combined share of defined contribution (DC) plans and individual retirement pension (IRP) accounts, in which subscribers choose investment products themselves, was 54.3%, exceeding half of the total. Investment in exchange-traded funds (ETFs) within retirement pensions also rose to 48.7 trillion won, accounting for about 40% of performance-linked reserves of 123.3 trillion won.

In the securities industry, Mirae Asset Securities ranked first with a 31.5% share based on retirement pension reserves at the end of the second quarter. Samsung Securities and Korea Investment & Securities ranked second and third. Samsung Securities moved into second place at the end of last year, overtaking Korea Investment & Securities, and widened the gap in reserves between the two companies to about 1.7 trillion won in the first half of this year.

New entrant Kiwoom Securities launched retirement pension services in June, pitching an online investment-oriented pension platform. It applied its existing trading environment to pension accounts, enabling real-time ETF trading and regular investment plans.

It also reflected investment performance in fees. Kiwoom Securities waives an annual management fee of 0.10% for IRP accounts if the annual return is equal to or lower than a benchmark indicator. It does not charge an asset management fee, while product-level fees for financial investment products apply separately.

Established brokerages are also reinforcing functions that link asset checks and investment.

KB Securities on Oct. 2 revamped the 'My Pension' section of its MTS 'KB M-able'. It separated account status and investment status to allow users to check contribution information, tax deduction status and balances by product. It also enabled users to move directly from holdings searches to real-time quotes and trading screens. It strengthened information for checking management status, including return trends and the share of risky assets.

Shinhan Investment Corp this year set up a pension customer management team and is expanding consultations and management after enrolment. It guides new DC and IRP customers within three days of account opening on the system and how to use the account, and connects customers one-on-one with pension specialist PBs known as 'Pension Star'. It also operates 'Shinhan Premier Pension Consulting', which covers strategies to reduce retirement income tax and pension payout plans.

Systems for managing corporate clients are also being overhauled.

NH Investment & Securities said it built a retirement pension corporate client management system on Sept. 28. It integrates information on corporate clients and potential customers and manages contract and management status and consultation histories on a single screen. It aims to improve the efficiency of company-by-company consultations and follow-up management by managing everything from customer contact to reserve management and execution.

Some say it is necessary to separately examine whether such service expansion by brokerages leads to improved investment performance for subscribers.

Hong Won-gu (홍원구), a research fellow at the Korea Capital Market Institute, analysed that no clear relationship appeared between long-term investment performance and market share among retirement pension operators. He said corporate selection of operators and subscribers’ choices of investment products are separated, and there are difficulties in comparing returns and costs.

Hong said in a report, "Competition among retirement pension operators also needs to develop from competition focused on securing customers to competition aimed at improving subscribers’ long-term investment performance."