Firms see fresh opportunity in providing new retirement-related asset management


South Korea’s major brokerages houses are setting up research centers targeting the country’s baby boomer generation in a bid to take a share in potentially huge securities-related markets.

The term “baby boomers” refers to those born from 1955 to 1963, and securities firms are predicting that demand for new services will rise rapidly following the mass retirement of the demographic, whose number is estimated at 7 million, or 14 percent of the country’s total population,

Brokerage houses said that an average of 440,000 people aged 55 were retiring each year, but as the baby boomers reach retirement age the number of people leaving the workforce will double to about 800,000 per year.

Korea’s baby boomers, who greatly contributed to the rapid growth of the Korean economy in the past decades, have paid little attention to their retirement plans, except for government-led pension programs.

Securities companies expect their new research centers to play a role in gauging the market for the baby boomers and coming up with new tailored services and products.

Woori Investment & Securities, for instance, recently set up the 100-plus Era Research Center, a hub that it hopes will take charge of all the retirement-related service development and strategy formation. The center analyzes the current financial services linked to post-retirement periods and also draws up specific strategies to stay ahead in the baby boomer investment consulting services that are slowly taking shape.

“A major shift took place in the funds market in Japan in the past decade since 2002 when Japanese baby boomers began to retire,” said Park Hyung-soo, manager at the center.

“There will be an equally important change in the Korean asset management market related to the baby boomer generation.”

Daewoo Securities also launched a task force last month to set up a retirement plan research center. The company said it sees a fresh opportunity in providing new retirement-oriented asset management and securities investment. The center is expected to be established by next month.

Mirae Asset Securities is widely regarded as a frontrunner in the fledgling field as it set up its own research center for retirement-centered services in December 2005.

Samsung Securities also launched its retirement plan center last December to join the baby boomer services bandwagon, focusing on the possible link between its private banking services and the baby boomers’ need for specific retirement plans and goals.

By Yang Sung-jin (insight@heraldcorp.com)