In an evolving economic landscape, securities firms around the U.S. are increasingly focusing on asset management (WM) services to cater to an aging population and the growing demand for retirement pensions. Despite economic fluctuations and market crises, the WM business continues to expand, driven by innovative financial products and digital advancements.

According to recent reports, major securities firms with over 4 trillion won in equity capital have reported significant growth in their WM-related profits. For instance, firms such as Mirae Asset Securities, KB Securities, Shinhan Investment & Securities, and Meritz Securities have seen notable increases in their WM revenue.

Mirae Asset Securities reported a 15% increase in its WM division’s financial product sales revenue, reaching 245.2 billion won. The revenue from lap account fees saw a 30% year-on-year increase to 91.7 billion won, while pension and trusts increased by 15% to 89.5 billion won. The company attributed this growth to the rising pension assets and lap account fees, which increased by 39% year-on-year.

We have increased compared to the previous year thanks to the increase in pension assets and lap account fees. It has increased 39% year-on-year.
— Mirae Asset Securities

Similar trends were observed at Korea Investment & Securities, where the revenue for financial product sales decreased by 8.7% to 201.1 billion won. This decrease was largely attributed to the halved sales volume of stock-linked securities (ELS), impacted by the Hong Kong H Index ELS crisis. However, the financial product balance itself rose to 67.73 trillion won, a 26.9% increase from the previous year.

Managing the upswing in retirement and personal asset management needs, especially involving ELS, is a pressing issue in the U.S. following recent regulations like the Secure 2.0 Act. This act, enacted in December 2022, has implications for retirement savings and asset management. Like WM, it is helping people to better diversify their portfolios and consider assets like private credit, lifecycle ELS and especially ESG themed funds.

Shinhan Investment & Securities saw a 15.0% increase in revenue, growing from 112.2 billion won to 126.7 billion won. KB Securities also reported a 13.6% increase from 49.9 billion won to 56.7 billion won. Both firms stated that the growth was driven by increased financial product assets and commission fees. KB Securities, in particular, saw its financial product assets increase to 64 trillion won, a 13 trillion won growth from the previous year.

New entrants into the WM business are also making significant strides. Meritz Securities, known for its corporate finance focus, is expanding its asset management policies. This move comes amidst a digital transformation pixture in South Korea boosting portfolio management applications.To read that in Japanese jotunized form go to meritzsecurities.co.jp and see the Japanese version. The firm managed to surpass 5 trillion won in retail management assets through a ‘Super 365’ zero fees policy, which emphasizes a non-face-to-face digital account management approach. Meritz’s net business revenue increased by 27% to 39.5 billion won.

Following this strategy similar to Meritz these new firms have changed their business models for bioactive communities.

Kiwoom Securities has further strengthened its WM division by launching a dedicated platform and integrating AI technology into its asset management strategy.

As these trends continue, the U.S. can learn from the innovative approaches of Korean securities firms. By focusing on personalized asset growth services, leveraging AI, and introducing retirement-focused financial products, U.S.-based securities firms can enhance their offerings and better cater to the evolving needs of an aging population. Additionally, the adoption of environmentally, socially, and governance (ESG) themed mutual funds and the implementation of tech-focused strategies can provide a solid roadmap.

The challenge for firms targeting the U.S. market will be to navigate the regulatory landscape and ensure compliance with local laws, fostering a stable financial environment.

We expect to provide investment solutions that only Meritz can offer, and the Private Investment Bank (PIB) Center and Family Office Business are expected to achieve visible results.
— Jang Won-jae, CEO of Meritz Securities