[Desk Column] Why the Financial Investment Industry Chose a Salesman as Its Leader

Jo Young-joo, Head of Capital Markets Department

He worked exclusively at sales branches until he became an executive after joining a securities firm. In 1997, during the Asian financial crisis, he served as the head of the Gangnam branch and grew it into the top branch nationwide. After becoming an executive, he gained experience in retail business, wholesale business, and corporate finance. In 2012, he was promoted to president and spent seven years in that role. In this way, he dedicated 35 years of his career to Daishin Securities as a securities professional. On the 1st of last month, he rose to represent the financial investment industry. This is the story of Na Jae-cheol, chairman of the Korea Financial Investment Association.

Chairman Na is a well-known salesman in the securities industry. He personally experienced the Asian financial crisis and the dot-com bubble while working on the front lines of sales. He bore the brunt of complaints from customers who suffered losses after following his investment recommendations. Through this, he built trust with his clients. He emphasizes that the key to his success as a salesman was 'trust.' Thanks to treating customers with sincerity, he was able to achieve results. Chairman Na says, "Even if customers sometimes incur losses, you must instill the trust that 'you can recover those losses.'"

In the election for the chairman of the Korea Financial Investment Association held on December 20 last year, Chairman Na received an overwhelming 76.3% support. Considering that in the past, there were often cases where a majority was not achieved and a runoff election was held, this essentially means that member companies gave him full backing. This reflects the serious sense of crisis currently felt in the financial investment industry.

The Korean stock market is in a so-called 'outcast' position in the global financial market. Last year, the KOSPI rose only 7.7%, contrasting with the 28.9% increase in the U.S. Standard & Poor's (S&P) 500 index. The Euro Stoxx 600 index in Europe and the Shanghai Composite Index in China rose 23% and 22%, respectively, while Japan's Nikkei 225 index increased by 18%. This situation can be attributed to the weakened fundamentals of Korean companies, but underlying factors include the government's anti-business and anti-market policies, population decline and aging, and weakened innovation. Foreign investors show little interest except in semiconductor stocks. The 'Sell Korea' trend has been forgotten.

The financial investment industry has been plagued by various adverse events since last year. Following the overseas interest rate-linked derivative-linked securities (DLS) incident, the German Heritage DLS incident, and the suspension of redemptions by Lime Asset Management's funds, the trust in domestic securities firms and asset management companies has plummeted. In particular, Lime Asset Management has been under suspicion of using returns from new investors to pay off old investors since last year, putting the so-called 'Korean-style hedge funds'?professional private equity funds?into crisis.

As the investment appeal of Korean companies declines and trust in the financial investment industry falls, market funds are flowing only into real estate. The real estate bubble has become a weak link in the Korean economy. It cannot be said that the financial investment industry is free from responsibility for pushing market funds out of the capital market.

On the 9th, Chairman Na presented four major tasks for the financial investment industry. These are discovering and providing various financial investment product solutions that other sectors cannot offer, raising venture capital to nurture companies related to innovative industries, developing new businesses, and the global transformation of the financial investment industry. These tasks can serve as a foundation for smooth market operation and for financial investment companies to actively conduct business. However, even if such achievements are made, if trust is not gained from the market participants, it will be like a castle built on sand. It means the market can collapse at any time for any reason.

A philosophy that is publicized in the market where the financial investment industry participates is also necessary. It is a fundamental question about what the market exists for. The stock market should not become a gambling den, nor should there be investors who lose their entire assets from a single financial product investment. Such incidents do not occur as long as securities firms and asset management companies maintain the boundaries they must uphold. Among the many reasons why the capital market must thrive, the core is to 'increase the wealth of the people.' It is hoped that the 'sincerity' and 'customer trust' that Chairman Na talks about will spread throughout the financial investment industry.

This content was produced with the assistance of AI translation services.