Seeking Ultra-High Net Worth Individuals... Inheritance, Gifts, Taxes, and Business "Comprehensive Family Asset Management"

Employees of NH Investment & Securities Premier Blue Gangbuk Center are taking a commemorative photo.

[Asia Economy Reporter Lee Seon-ae] Mr. A (65), who runs a small business, used to manage about 30 billion KRW in financial assets almost equally between banks and securities firms, but recently moved all assets held in banks to securities firms. When making the move, he subscribed to a "Family Office" service. This was to receive comprehensive solutions including inheritance planning, business succession, legal advice, tax consultation, real estate investment, and business expansion. He said, "Lawyers, tax accountants, and investment banking (IB) experts each provide one-on-one customized solutions, so the service satisfaction is high," adding, "I am preparing for succession work, and as we enter the second generation of the family business era, I was worried about various business expansions, but I was attracted by the fact that family management continues to my children and that investment opportunities can be captured."

Competition for VVIP specialized services in the securities industry for ultra-high-net-worth individuals with assets over 10 billion KRW is intensifying. The differentiated service offered is the "Family Office." This concept is inspired by ultra-high-net-worth individuals in the US and Europe who establish personal asset management companies at the scale of enterprises. The world's first family office was the "Rockefeller Family Office," established in the 19th century by the "Oil King" Rockefeller, who directly hired asset management personnel to exclusively manage the Rockefeller family’s assets. After closely observing the success of Samsung Securities, which was the first to launch a family office in Korea, other securities firms have eagerly entered this service, heating up the competition to attract VVIP clients.

According to the financial investment industry on the 22nd, NH Investment & Securities recently launched the "Premier Blue Family Office." Only customers with deposit assets over 10 billion KRW invited by the company are eligible to join, and comprehensive solutions are provided for the complex and wide-ranging issues faced by the customer and their family. Investment banking deal products (IB Deals), previously available only to large institutional investors such as pension funds, and OCIO (Outsourced Chief Investment Officer) services are also available. Lee Jae-kyung, Executive Director of NH Investment & Securities’ Premier Blue Division, stated, "We plan to form a dedicated team for each client to provide continuous services and will expand sales targeting ultra-high-net-worth individuals."

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Samsung Securities pioneered this market and established itself as a leader by launching the industry's first "Family Office" for ultra-high-net-worth individuals with financial assets over 100 billion KRW in July 2020. As word of mouth spread through service diversification, it set a new record with deposit assets of over 100 trillion KRW each for ultra-high-net-worth individual and corporate clients, the first in the industry.

Mirae Asset Securities introduced the "Mirae Asset Sage Club Family Office" in March and recently opened the Jamsil Saenae Station WM in August to increase face-to-face contact. Korea Investment & Securities is also moving quickly. Beyond comprehensive asset management and business succession solutions for ultra-high-net-worth individuals, it recently launched a dedicated mobile application called "VIP Lounge."

A representative from an ultra-high-net-worth client dedicated team said, "Last year, money movement centered on securities firms occurred in the financial sector, accelerating competition among large firms to secure ultra-high-net-worth clients. Specialized services will gradually develop into more diverse investment portfolios." Another representative added, "We believe the scale of individual investors, which has sharply increased over the past two years, has essentially peaked, so securities firms will now focus on targeting high-net-worth and ultra-high-net-worth client segments. Family offices are the most attractive field because they continue management through the clients’ children after the clients’ passing or inheritance, maintaining relationships as long as the family exists."