Financial authorities are considering instructing securities firms to slash service fees, including those on transactions for stocks and equity funds.
Over the past five years, the local brokerage sector has enjoyed huge gains ranging between 6 trillion won ($5.2 billion) and 9 trillion won per annum by charging financial consumers a variety of fees.
“We plan to review the service charge structure of the overall brokerage sector. Then, we will map out guidelines (to cut the fees),” said an official of the Financial Services Commission.
An official of the Financial Supervisory Service said the regulators are consulting with the Korea Financial Investment Association and each securities firm to revamp the fee-charging structure.
Brokerage houses raked in about 6.1 trillion won in service fees in 2006, 9.3 trillion won in 2007, 6.7 trillion won in 2008, 8 trillion won in 2009 and 8.2 trillion won in 2010.
Of the 8.2 trillion won for last year, commission income from the trading of stocks reached 5.36 trillion won and those from the trading of funds came to 669 billion won.
The big three gained the most in the commission income. Daewoo Securities topped the list by gaining 431.1 billion won in fees, followed by Samsung Securities with 427.5 billion won, and Woori Investment & Securities with 386.3 billion won
Hyundai Securities posted 364 billion won in fee income, followed by Korea Investment & Securities with 333.2 billion won, and Shinhan Investment Corp. with 315.2 billion won.
In the commission income for fund transactions, Mirae Asset earned the most with 130.6 billion won, trailed by Korea Investment & Securities with 96.5 billion won, along with Hana Daetoo Securities with 61.9 billion won.
The nation’s financial sector has faced strong criticism over their high profit margins and big paychecks after the Occupy Wall Street Movement in the U.S. spurred similar protests here.
“But as service charges have been a key income source for securities, a series of conflicts are expected during the talks between regulators and the brokerage sector,” an FSS official said.
By Kim Yon-se (
kys@heraldcorp.com)
