Leveraging Asset Management Expertise... Banks Say "Attract Super Rich Clients" (Comprehensive)

Woori and Hana Bank Launch Exclusive Specialized Branches for High-Net-Worth Clients
Offering Asset Management and Business Succession Consulting... One-Stop Service

[Asia Economy Reporter Kim Jin-ho] Kim Cheol-su (67, pseudonym), a small business owner, recently visited a specialized branch of a major domestic bank dedicated to high-net-worth individuals. Although Kim had been confident in managing his own finances, he sought the bank’s services upon the recommendation of an acquaintance as the time approached to pass on the company he had built over many years to his son. Expecting only simple investment advice, Kim was highly satisfied to receive ‘business succession consulting’ at the specialized branch. He found ways to significantly reduce the inheritance tax burden incurred during business succession. Encouraged by this, Kim also decided to entrust the bank with managing his assets.

Major commercial banks are fiercely competing to secure ‘super-rich’ clients. They are expanding their asset management services beyond the simple investment types of the past to cover various fields such as inheritance, gifting, taxation, and real estate. Asset management is considered one of the core businesses and a future growth engine for banks.

According to the financial sector on the 21st, Woori Bank opened a specialized branch called ‘Two Chair Exclusive (TCE)’ on the 20th for high-net-worth individuals with assets exceeding 3 billion KRW.

The ‘TCE Center,’ opened at the main branch in Jung-gu, Seoul, is Woori Bank’s second branch targeting ultra-high-net-worth clients. It is staffed with eight private bankers (PBs) specializing in asset management, including experts in taxation and real estate, providing one-stop comprehensive financial consulting in one location. Notably, Woori Bank leverages its corporate finance expertise to offer asset management and business succession consulting for company owners.

Other commercial banks also operate specialized branches targeting the super-rich. Hana Financial Group runs two ‘Club 1’ branches (Samsung-dong and Hannam-dong) for clients with deposit assets exceeding 3 billion KRW. The ‘Club 1 Hannam Branch,’ opened last month, is a complex branch combining Hana Bank’s Club 1 Hannam PB Center and Hana Financial Investment’s Club 1 Hannam Wealth Management (WM) Center. The comprehensive asset management services include tailored specialized programs covering domestic and international taxation, overseas investment, and immigration consulting. KB Kookmin Bank and Shinhan Bank also operate ‘Star PB Centers’ and ‘Shinhan Privilege Centers,’ respectively.

The intense focus of commercial banks on asset management services for the super-rich is largely due to the sharp increase in individuals holding substantial financial assets. According to the ‘Korea Wealth Report’ published by KB Financial Group last year, the number of wealthy individuals with financial assets exceeding 1 billion KRW reached 354,000 by the end of 2019, more than doubling over the past decade. A bank official stated, “For high-net-worth individuals, the scale of investment is so large that the income share from asset management is absolute. Also, since wealth can be passed down to children through inheritance and gifting, banks have no choice but to continuously expand specialized branches to attract these clients.”

This also reflects efforts to overcome the limitations of traditional banking revenue sources such as net interest margins amid prolonged low interest rates. Over the past few years, banks have reorganized their organizations and made significant efforts to launch various services to strengthen their asset management businesses. A financial sector official advised, “Facing deteriorating profitability, banks need to further develop areas where they have strengths, such as asset management. They should focus more on enhancing both face-to-face and non-face-to-face services in the WM sector, which is regarded as a future growth engine.”

Meanwhile, banks have recently launched asset management services targeting the 20s and 30s generation. SC First Bank opened a dedicated web page for its lifetime asset management solution, ‘Premier Age.’ This web page targets young people who want to start financial planning amid the investment craze in stocks, cryptocurrencies, and real estate but lack sufficient information.

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