Stock Market Funds Flowing into Intermediary ISA... Already 300 Billion Money Move

[Asia Economy Reporter Lee Seon-ae] 'Money move' is in full swing with the brokerage-type Individual Savings Account (ISA) that allows direct investment in stocks.

According to the financial investment industry on the 6th, the deposit amount of brokerage-type ISA accounts at five major domestic securities firms?NH Investment & Securities, Samsung Securities, Korea Investment & Securities, KB Securities, and Mirae Asset Securities?has reached 300 billion KRW. This record was achieved about a month after NH Investment & Securities and Samsung Securities first launched the brokerage-type ISA in the industry on February 25. The advantages such as direct stock investment and tax benefits are believed to be attracting great popularity among investors.

Introduced in March 2016, the ISA is a tax-saving product created to support personal asset management in a low-interest-rate era. It allows investment in various financial products such as savings/deposits, funds, Exchange-Traded Funds (ETF), and Equity-Linked Securities (ELS) with a single account. Previously, ISA had only two types: 'trust-type,' managed by the company based on customer instructions, and 'discretionary-type,' designed by experts. This year, the brokerage-type was added. Unlike the existing types, the brokerage-type ISA can hold domestic listed stocks, allowing investors to manage their investments directly. Brokerage-type ISAs can only be opened at securities firms with a brokerage license. If losses occur from investing in domestic stocks, the profits from other financial products within the ISA can be integrated for calculation, effectively reducing the tax burden.

An industry insider said, "The number of brokerage-type ISA subscribers is expected to continue increasing for the time being, so the industry will continue to promote related events," adding, "Opening a brokerage-type ISA account this year allows an annual investment limit increase of 20 million KRW based on the principal, and it can be used as a tax-saving account in preparation for the financial investment income tax introduced in 2023, making it highly attractive." From 2023, a 20% tax will be imposed on stock capital gains exceeding 50 million KRW.

While new customers are rapidly increasing, contract transfers from banks to securities firms' brokerage-type ISAs are also on the rise. Since brokerage-type ISAs are only available at securities firms, customers who already hold discretionary or trust-type ISA accounts at banks are moving their accounts to securities firms. According to 'ISAnet,' the ISA support system of the Korea Securities Depository, the number of accounts transferred from banks to securities firms' brokerage-type ISAs recently reached 1,000.

Since the deposit amount of transferred accounts is generally larger than that of new accounts, each securities firm is expected to actively pursue transfer business. Currently, events such as fee waivers and giveaways are in full swing. NH Investment & Securities is the most aggressive. For one year after subscription, it does not charge securities firm fees or related institution fees for domestic stock trading. Samsung Securities, Korea Investment & Securities, Mirae Asset Daewoo, and KB Securities offer lifetime preferential rates on domestic stock trading fees.

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