Retirement pension assets referred from Shinhan Bank to Shinhan Securities more than doubled over the past year, as the group moves to capture within its own affiliates the growing demand for pension transfers created by a rule allowing savers to switch providers without liquidating their holdings.
Shinhan Bank referred 48.86 billion won ($34 million) in retirement pension assets to Shinhan Securities in the first half of this year, up 132.8% from 20.99 billion won a year earlier, according to Shinhan Financial Group on the 26th. The number of individual customer referrals also rose to 180 from 69.
Individual retirement pension (IRP) referrals accounted for about 90% of the total, climbing to 44.13 billion won from 18.1 billion won in the first half of last year. Defined contribution (DC) referrals also increased to 4.73 billion won from 2.89 billion won over the same period.
Behind the cross-selling push is a retirement pension in-kind transfer system that lets savers change financial providers without selling the products they hold. Since the system took effect at the end of October 2024 through the end of June this year, 5.2 trillion won moved from banks to brokerages, accounting for 33% of all in-kind transfers, according to the Financial Supervisory Service.
Shinhan Bank refers customers seeking a wider range of investment products and management styles to Shinhan Securities through its branches and private banking and wealth management centers. The approach channels pension demand headed for brokerages into an affiliate, allowing the group to maintain the customer relationship. Shinhan Securities has responded with offerings including 10 types of default option portfolios combining target date funds (TDFs) and balanced funds. Its neutral investment product posted a three-year cumulative return of 38.99% as of the end of the first quarter this year, ranking first in the brokerage industry.
Shinhan Financial Group plans to broaden the customer base of its capital markets businesses through the pension referral operation. As of the end of the first half this year, customer assets in the group's capital markets segment, combining securities and asset management, reached 498.1 trillion won, up 43.7% from a year earlier. "By linking affiliates in line with customers' investment preferences, we will increase actual sign-ups and transfers as well as net inflows into retirement pensions, and build up capital markets synergy across the group," a Shinhan Financial Group official said.