[Asking the Wealthy Digital Generation]② "Tax-saving strategies must be used regardless of generation"

Oh Hyun-seok, Head of Digital Asset Management Division at Samsung Securities
Growing Market Volatility Sparks Interest in Asset Rebalancing

"The 'digital affluent,' characterized by high-net-worth individuals and heavy mobile users, prioritize quickly resolving investment-related concerns. In short, they can be described as hybrid investors. Currently, they are actively engaged in asset rebalancing (periodically preparing financial statements and readjusting investment allocations for financial assets)."

Oh Hyun-seok, Head of Digital Asset Management at Samsung Securities, is explaining the investment strategies of the digital affluent to Asia Economy. Photo by Samsung Securities

Oh Hyun-seok, Head of Digital Asset Management at Samsung Securities, recently explained the characteristics and tendencies of the digital affluent in an interview with Asia Economy. Oh said, "They prefer not to visit branches for face-to-face contact and find close management by private bankers (PBs) burdensome." He added, "They are accustomed to self-directed investing and acquire investment information through various channels (securities firms’ research centers, YouTube content, acquaintances, etc.) while handling tasks via mobile. They only require one-time assistance for inquiries about rights subscriptions or explanations of specific product structures."

Samsung Securities introduced the 'S.Lounge Service' last year targeting the rapidly growing digital affluent segment. This service considers those who reject bothersome contacts but want to selectively receive necessary investment information. It is a premium consultation service provided by digital PBs, aiming for a dedicated human-touch service. Customers can receive consultations on desired dates, times, and topics. One hundred PBs with over 10 years of experience are on standby. Tax and real estate consultations are also available by prior appointment. The premium investment care service is systematized to provide investment information as well.

They also hold web seminars. Oh said, "Customers can participate in seminars comfortably without having to travel," and "there is also the advantage of being able to ask questions anytime about topics they are curious about." Web seminars are held on topics frequently requested by non-face-to-face customers. Oh added, "Recently, there has been a surge in consultation demand regarding tax-exempt bond trading in Individual Savings Accounts (ISA) and generative artificial intelligence (AI) services, which we used as webinar topics." He also noted, "Consultations on the secondary battery stock value chain have increased, so we invited related analysts to conduct lectures." Approximately 470 customers applied per session for the web seminars, which are held two to three times monthly on average.

What topics do digital wealthy clients holding investment assets of 100 million KRW or more inquire about or consult on most frequently these days? Oh answered, "As market volatility increases, inquiries about asset rebalancing have surged," adding, "In particular, bonds and stocks are the most inquired about, in that order." He continued, "Since the second quarter of last year, interest rate levels have risen, increasing interest in high-yield products. Unlike last year, approaches to bonds have diversified by issuer, maturity, credit rating, and domestic versus overseas."

Oh emphasized that asset management investment strategies for the digital affluent should be tailored according to asset size, age, and investment tendencies. He advised, "For the MZ generation (Millennials + Generation Z) who are aggressive investors, it is necessary to increase stock allocations (robotics, AI, electric vehicles, China reopening, luxury themes, etc.) whenever stock prices adjust. For retired baby boomer generations, portfolios should be composed mainly of monthly interest-paying products and government bonds." Furthermore, he stressed that tax-saving strategies must be utilized regardless of generation. Oh emphasized, "A strategy combining tax deferral and low-rate taxation through Individual Retirement Pensions (IRP), pension savings, and ISAs is necessary."