Chairman Hwang Young-key of the Korea Financial Investment Association (KOFIA) said on March 31 that the non face-to-face financial consultations conducted online should be open to everyone in the financial industry in Korea.
The KOFIA chairman said online deals on all financial products including ISAs (individual savings accounts) should be allowed to be conducted without customers visiting financial institutions, but online through the Internet and smartphones.
Hwang made the remark at a seminar held at KOFIA office titled “Prospects for Asset Management using Robo Advisors.” He said robo advisors will dominate the operation of the financial industry in Korea in the future.
Many key financial managers at the gathering agreed that the government plan to expand the use of robo advisors by steps cannot catch up with the speed of the expansion of the use of robo advisors in the financial industry. The Financial Services Commission (FSC) on March 24 allowed financial institutions across the country to operate robo advisors to conduct financial transactions such as fund investments and the withdrawal of funds without humans manipulating them.
Chairman Hwang said financial firms are ready to let robo advisors manage funds without human manipulation. The FSC plans to hold a test for financial firms on their ability to allow robo advisors to manage funds. KOFIA is preparing to take charge of building and then running “Open Beta.”
Hwang also asked for tax breaks for financial firms using robo advisors in order to expand their uses in the financial industry, such as those on fees and taxation.
Funds managed by robo advisors will be introduced at the financial market in the middle of April, Chairman Hwang said. It will be the first time that any customer can invest their funds via robo advisors, Hwang said.
KB Asset Management will be the first financial firm in Korea to launch the service on April 11 under the name “KB Global Shares Solution Fund,” Robo advisors will use ETFs to invest the fund in 20 stock markets around the world.
People will follow what robo advisors tell them to do in managing funds, including changes in stock portfolios. The results of a simulated experiment over the past 12 years showed that some 10.6 percent in profit was generated.
KB Asset Management will put the new robo advisory fund into the KBSTAR from KStar and expand the operations of funds for solutions tailor-made for customer demands and product lineups.
Kium Asset Management, too, plans to introduce the “Kium Quarterback Asset Distribution Fund in cooperation with Quarterback Investment Consultation Co. The fund will be invested in shares listed on the U.S. stock exchanges, utilizing some 2,500 ETFs with diverse investment portfolios made up of bonds, stocks and raw materials. They expect to earn some 7 percent in profit from the fund managed by robo advisors this year.
Korea Financial Investment Association Chairman Hwang Young-key advised the group’s members to “strengthen asset management services that help customers’ asset accumulation and retirement preparation,” via new services like the individual savings account, tax-free overseas investment funds and eased regulations on managing retirement pensions.
Established in 2009 through a merger of the three associations of securities, futures and asset management firms, KOFIA serves as a nonprofit, self-regulatory body to represent 312 members, mostly brokerage and asset management firms.
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