The Korea Herald

피터빈트

Investment advisory firms shift to losses on less contract

By KH디지털2

Published : March 10, 2017 - 09:12

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A majority of investment advisory companies in South Korea suffered losses in the third quarter of their fiscal 2016, hit by a decrease in contract amount, data showed Friday.

A total of 159 full-time investment advisory firms were registered with the Financial Supervisory Service last year.

The logo of the Financial Supervisory Service (Yonhap) The logo of the Financial Supervisory Service (Yonhap)

They posted a combined loss of 2.1 billion won ($1.8 million) during the September-December period, versus a net profit of 14.6 billion won in the previous quarter, according to the data compiled by the watchdog.

Their return on equity, a measure of profitability, stood at minus 1.5 percent, down 11.4 percentage points from three months earlier.

Among the 159 firms, 93, or 58.5 percent, recorded net losses, mainly attributable to a drop in contract amount and increased costs.

Their combined contract volume fell 4.7 percent on-quarter to 15.5 trillion won as of the end of 2016.

"Competition is getting fiercer among small and medium-sized investment advisory firms, with contract amount continuing to drop and the number of loss-making companies growing," Ryu Kook-hyun, a senior FSS official, said. 

The FSS will constantly monitor their financial soundness and other business conditions, he added. (Yonhap)