A majority of investment advisory companies in South Korea suffered losses in the third quarter of their fiscal 2016, hit by a decrease in contract amount, data showed Friday.

A total of 159 full-time investment advisory firms were registered with the Financial Supervisory Service last year.

They posted a combined loss of 2.1 billion won ($1.8 million) during the September-December period, versus a net profit of 14.6 billion won in the previous quarter, according to the data compiled by the watchdog.

Their return on equity, a measure of profitability, stood at minus 1.5 percent, down 11.4 percentage points from three months earlier.

Among the 159 firms, 93, or 58.5 percent, recorded net losses, mainly attributable to a drop in contract amount and increased costs.

Their combined contract volume fell 4.7 percent on-quarter to 15.5 trillion won as of the end of 2016.

"Competition is getting fiercer among small and medium-sized investment advisory firms, with contract amount continuing to drop and the number of loss-making companies growing," Ryu Kook-hyun, a senior FSS official, said. 

The FSS will constantly monitor their financial soundness and other business conditions, he added. (Yonhap)