[Asia Exclusive] "Strengthening Core WM Sales Expertise in Securities Industry... Customer Profitability is Top Priority"

Changes in Financial Market Landscape Increase WM Importance
Enhancing Client Returns and Sustaining Pension Leadership
Chairman Park Hyun-joo's Investment Meeting Video Gains Attention
Active Marketing to Respond to Money Moves

Over 10 Trillion in Overseas Assets... Increasing Cash Asset Ratio
Investing in Global Quality Assets, Expecting Stable Returns

Strengthening Digital Sector Including YouTube Channel Operation for Healthy Investment Culture and Investor Education

Lee Sang-geol, President of Mirae Asset Daewoo, is being interviewed on the 21st at Mirae Asset Center One in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Interview = Jeon Pil-su, Head of Capital Markets Department; Summary = Reporter Song Hwa-jung] "I believe the essence of the securities industry is the Wealth Management (WM) sector. We will focus our strategy on increasing customer returns by supplying high-quality products and spreading successful investment philosophies."

Lee Sang-geol, President of WM at Mirae Asset Daewoo, is a financial expert who has experience across securities, banking, and insurance. After serving as CEO of Mirae Asset Life Insurance and stepping away from the field, he returned to the securities industry after 15 years as the WM President at Mirae Asset Daewoo. Many around him were worried, fearing hardship due to the declining WM market. However, he believed that crisis is opportunity. As he predicted, the COVID-19 pandemic became an opportunity. The WM division showed strong performance last year, with pre-tax profits estimated to have increased more than tenfold compared to the previous year. Overseas stock assets also grew by over 10 trillion KRW within a year.

President Lee described this year’s market as "not yet the time to leave the ballroom, but a situation where no one knows when the music will end," advising that as long as investors adhere to three principles?diversification, long-term investment, and maintaining a certain cash ratio?there is little cause for concern.

▲ You mentioned that Mirae Asset Daewoo will particularly strengthen WM this year. What plans do you have for this?

= Since 2020, the landscape of the domestic financial market has been changing. Securities firms’ WM customer bases are expanding, and the importance of WM business is increasing. In this context, Mirae Asset Daewoo plans to strengthen WM by focusing on three areas: customers, the pension market, and marketing.

First, the most important goal is to increase customer returns. To achieve this, we are reforming the return management system, enhancing the professionalism of sales staff, and strengthening the headquarters’ product management capabilities. After assuming the WM presidency, we expanded the number of customers managed per sales employee and reinforced customer management. In April last year, we completely revamped the Masters League system, a customer return management program, to improve customer returns. As a result, from April to December 2020, the overall return rate of customers managed by WM sales staff reached 25.3%.

Second, we plan to maintain overwhelming dominance in the pension market. In 2020, Mirae Asset Daewoo’s share of new individual pension accounts among the top seven securities firms was about 55%. This is due to differentiated pension returns, infrastructure, and staff capabilities. The pension market is shifting from defined benefit (DB) products with fixed interest rates to defined contribution (DC) and individual retirement pension (IRP) products, where individuals can choose investments, amid continued low interest rates. The importance of global asset allocation is increasing.

Third, we will actively conduct marketing to respond to money moves. If the low interest rate environment continues, the flow of money into investment-type products is expected to strengthen. In response, since last year, we have expanded marketing through YouTube and social networking services (SNS), and in 2021, we plan to dramatically improve both quantity and quality. A representative example is the investment meeting video of Park Hyun-joo, Chairman of Mirae Asset Financial Group, which has recently attracted attention.

▲ Last year, the stock market plunged due to the COVID-19 crisis but surged past 3,000 points early this year, showing extreme market volatility. The keyword connecting these changes is undoubtedly "Donghak Ants" (individual investors). How do you view the stock frenzy among individual investors?

= Personally, I prefer not to use the term "Donghak Ants." The word "Donghak" has historical connotations and is not value-neutral; it risks being associated with negative meanings. Also, limiting asset allocation targets by terms like Donghak or Seohak (Western learning) is not desirable from an investment perspective. The general term "individual investors" is appropriate, and personally, I prefer the term "wise investors." The stock frenzy among individual investors is a natural economic phenomenon in a low-interest-rate investment environment, and financial companies must fulfill their responsibilities to help individual investors succeed.

As long as low interest rates persist, the major trend of money moving into stocks will accelerate. However, it is important to prevent investors from engaging in short-term trading as in the past, suffering losses, or investing in poor-quality or highly volatile stocks and failing.

▲ Overseas investment is also continuously expanding. Mirae Asset Daewoo’s overseas stock assets have exceeded 10 trillion KRW. What is your strategy for the overseas division?

= Overseas investment embodies Mirae Asset Group’s vision. Mirae Asset’s vision is "to contribute to customers’ successful asset management and peaceful retirement as a global investment specialist group." Based on this vision, Mirae Asset introduced innovative companies and global exchange-traded funds (ETFs), increasing customer overseas stock assets from just 1 trillion KRW in 2017 to 18 trillion KRW at the beginning of this year.

Overseas stock investment is just beginning. Currently, the total amount of individual investors’ overseas stock investments, including direct stock investments and stock-type fund investments, does not reach 90 trillion KRW. Given that individuals’ cash liquidity is 2,000 trillion KRW, only about 4.5% is invested in overseas stock assets. About 95% of individuals’ cash assets are concentrated in deposits, bonds, and stocks in the domestic market, which accounts for only 1.9% of the global economy.

Mirae Asset Daewoo aims to guide a higher proportion of individuals’ cash holdings toward global asset allocation in line with the group’s vision. If customers achieve an average annual return of about 10% through global quality asset investments over the long term, we can create tens of trillions of won in national wealth annually through financial exports.

Lee Sang-geol, President of Mirae Asset Daewoo, is being interviewed on the 21st at Mirae Asset Center One in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

▲ Recently, there seems to be a particular focus on strengthening high-net-worth clients and the digital sector. What strategies does Mirae Asset Daewoo have?

= Both areas need strengthening. We are focusing on systems and education to achieve this. To spread a sound investment culture and provide investor education, we operate the YouTube channel "Mirae Asset Smart Money." Over the past year, we have produced and provided about 400 investment information videos, and the channel’s subscribers have increased dramatically from about 6,000 at the beginning of 2020 to approximately 190,000 now. We plan to create good content through YouTube to help customers. Strengthening the digital sector is also necessary to expand overseas stock investment. Fewer than 600,000 investors in Korea have traded even a single overseas stock, while the potential investor base is about 20 million.

For VIP clients, we plan to open 4 to 5 additional branches this year. We believe a network of about 80 to 100 branches is necessary.

▲ Do you have any goals for this year?

= The biggest goal this year is to bring peace of mind to customers. Although Korea’s securities industry began in 1948, it has yet to establish itself as an asset management industry that contributes to customers’ comfortable retirement. From 2017 to 2020, Mirae Asset Daewoo has advised overseas stock investors to achieve about 4 trillion KRW in investment gains. As money moves spread, we will focus our capabilities on allocating incoming customer funds to high-quality global asset products, enabling customers to achieve stable long-term returns.

Lee Sang-geol, President of WM at Mirae Asset Daewoo ? Career

▲ Born in Seoul, 1961

▲ Graduated from Korea High School, 1980

▲ Graduated from Seoul National University, Department of Linguistics, 1985

▲ MBA, Helsinki, 2000

▲ Joined Korea Exchange Bank, 1988

▲ Joined Mirae Asset Securities, 2000

▲ Head of Financial Product Marketing Division, Mirae Asset Securities, 2001

▲ CEO, Mirae Asset Life Insurance, 2011

▲ Auditor, Mirae Asset Venture Investment, 2018?present

▲ President of WM, Mirae Asset Daewoo, January 2020?present