Growth Continues for Investment Advisory and Discretionary Management Firms... Contract Balance Reaches 743 Trillion Won Last Year

Financial Supervisory Service Announces
'2024 Business Year Investment Advisory and Discretionary Management Business Performance'

The total contract balance of investment advisory and discretionary management firms reached 743 trillion won last year, continuing its steady growth.

According to the "2024 Business Year (April 2024?March 2025) Investment Advisory and Discretionary Management Business Performance" report released by the Financial Supervisory Service on July 17, as of the end of March this year, the total contract balance stood at 742.9 trillion won, marking a 3.3% increase (23.8 trillion won) compared to the same period last year. Of this, investment advisory contract balances reached 32.2 trillion won and discretionary management contract balances reached 710.7 trillion won, representing increases of 7.0% and 3.1%, respectively.

The number of companies increased by 69 from the previous year to a total of 793. Among them, affiliated companies totaled 350, up by 32, while specialized firms increased by 37 to reach 443.

Total advisory and discretionary management fee income amounted to 1.2243 trillion won, up 20.1% from the previous year. Of this, affiliated companies earned 1.0135 trillion won in fee income, an increase of 147.3 billion won (17%) year-on-year. By sector, asset management companies generated the most with 682.6 billion won (67.3%), followed by securities companies with 329.4 billion won (32.5%), and banks with 1.5 billion won (0.2%), in that order.

Specialized firms recorded 210.8 billion won in fee income, an increase of 57.5 billion won (37.5%) from the previous year. However, net profit for the period fell by 34.2% year-on-year to 21.7 billion won. The proportion of profitable companies also declined, dropping from 217 companies (53.7%) as of March 2024 to 178 companies (40.2%), indicating intensified competition and polarization due to the limited market size.

The scale of discretionary asset management also expanded. The total discretionary assets managed by discretionary management firms reached 818 trillion won, an increase of 48.5 trillion won (6.3%) compared to the previous year.

Of this, affiliated companies accounted for 810 trillion won. By sector, asset management companies were responsible for the majority, managing 731.8 trillion won. Most contracts were with insurance companies (accounting for 74.6% of contract amounts), and assets were mainly managed in debt securities such as government and public bonds (499.4 trillion won) to match insurance contract assets (long-term).

Securities companies managed 77.2 trillion won, a decrease of 16.1 trillion won (17.3%) from the previous year. Most contracts targeted individuals and general corporations (accounting for 75.6% of contract amounts) with high demand for short-term asset management. Assets were mainly managed in liquidity assets (commercial paper, repurchase agreements, deposits, etc.), totaling 43.2 trillion won.

Specialized firms managed 8 trillion won in discretionary assets, an increase of 1.3 trillion won (19.5%) year-on-year. The main assets managed were equity securities (45.3%) and debt securities (27.5%), primarily through direct investment in marketable securities.

The Financial Supervisory Service stated, "Affiliated companies, led by asset management firms, continue to grow through the management of institutional discretionary assets for insurance companies and pension funds," and added, "Although specialized firms continue to enter the market, competition and polarization are intensifying due to the limited market size."