eposits and withdrawals to the composition and management of global ETF portfolios tailored to the customers’ investment preferences. In contrast, AIM operates under an investment advisory model, providing a customized asset portfolio and advice from investment experts when customers input their financial situation and asset management goals.
Lastly, if one provides advice concerning investment judgments with respect to financial investment instruments or the value of financial investment instruments using periodicals published to be viewed by an unspecified number of people, email, etc., one will be considered as engaging in a "quasi-investment advisory business". In this case, one must file disclose that it is engaging in such business by filing a report with the FSC.
Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area
Those authorized to provide investment advisory services, discretionary investment services or quasi-investment advisory services are subject to certain business conduct regulations under the FISCMA.
Furthermore, because the financial authorities interpret the provision of information on financial products and product comparisons or recommendations as brokerage (as mentioned in Section 1.c.i. above), in order for a platform to broker financial investment products such as funds, it must be registered as an “investment solicitor” under the FISCMA. However, only individuals can register as investment solicitors. Registration as an insurance agency is also required to broker insurance products, but electronic financial service providers (as defined in Section 1.a.) cannot register as insurance agencies under the Enforcement Decree of the Insurance Business Act. In light of these restrictions, the provision of online/mobile financial advisory services is rather limited under the current system.
Lastly, if the relevant service is determined to be advertising rather than brokerage, then regulations relating to advertisement must be complied with.
Economic conditions
Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area
According to materials on the status of the robo-advisor test bed, as of the end of June 2021, there were 379,477 users of robo-advisor services, and the total amount of assets under management was KRW 1.75 trillion. Although this is not a large market yet, the market size is swiftly growing and expected to reach KRW 30 trillion in 2025.
The domestic robo-advisor market is dominated by FinTech firms, with Fint, Fount and AIM being representative examples.
Additional comments regarding the economic situation for financial advisory and broking services as well as adjacent services or what FinTech’s must be aware of in this business area
As mentioned in Section 1.c., both FinTech companies and financial companies are working to enter the robo-advisor market, and there are many companies currently providing these services. However, as mentioned in Section 1.c.vi., we expect the market size to grow tremendously. While the current role of robo-advisors can be characterized as automatic, optimal asset allocation based on investor tendencies, we expect robo-advisor services to extend to a broad range of services such as retirement planning and income and expense management.