ISA subscribers exceed 10 million... Achieved in 10 years and 5 months

The Korea Financial Investment Association announced on the 29th that the number of Individual Asset Management Account (ISA) subscribers has exceeded 10 million. It has been 10 years and 5 months since its introduction in March 2016.

The Korea Financial Investment Association reported that as of the end of August, the number of ISA subscribers was 105,000, and the subscription amount was 76.5 trillion won. According to the National Data Center, this is 23% of the adult population of approximately 44.07 million people aged 19 or older, which means that approximately one in four adults has an ISA account.

The growth in subscribers is also rapid. After recording 8 million people at the end of January, the number increased by 2 million in 7 months, with an average of 290,000 new members signing up per month. During the same period, the subscription amount also increased by nearly 20 trillion won, from about 55 trillion won to about 77 trillion won.

The association analyzed this year's rise in KOSPI as a result of increased participation in the stock market, and investment demand for ISAs, which allow savings, funds, and stocks to be managed in one account and receive tax benefits.

By type, the investment brokerage type, in which subscribers directly select products, accounted for 89.3% of the total with 8.975 million subscribers. There are 922,000 people (9.2%) in the trust type and 152,000 (1.5%) in the discretionary type.

As the concentration of investment brokerage type intensified, the number of trust type subscribers decreased by 797,000 from 1,719,000 at the end of 2020, and discretionary type subscribers also decreased by 67,000 from 220,000 during the same period.

The gap also widened by industry. Since the investment brokerage type can only be opened by securities companies, the number of subscribers to securities companies reached 9,005,000 (89.6%). On the other hand, banks decreased by 738,000 (41.4%) to 1,045,000 (10.4%) compared to 1,783,000 at the end of 2020.

The composition of operating assets was also clearly divided by type. For the investment brokerage type, exchange traded funds (ETFs) accounted for 50.8% and stocks for 36.1%, for the trust type, deposits/savings accounted for 88.2%, and for the discretionary type, funds accounted for 98.8%.

By age, the proportion of the 20s and 30s increased by 8.3 percentage points from 32.8% at the end of 2020 to 41.1% at the end of August. The proportion of investment brokerage was 95.1% for those in their 20s and 30s, 91.2% for those in their 40s, and 81.9% for those in their 50s or older. Among those in their 50s or older, the share of trust types was 16.0%, which was higher than that of other age groups.

By gender, there were 2.11 million men and 2.02 million women in their 20s and 30s, and 2.02 million women and 1.66 million men in their 50s and older.

ISA is a tax-saving account that collects and manages domestic listed stocks, funds, ETFs, deposits and savings in one account. After a certain period of time, profits and losses in the account are totaled, and based on net profit, up to 2 million won for the general type and 4 million won for the low-income type are exempt from taxation. Separate taxation of 9.9% is applied to the excess, and there is also a compound interest effect due to tax deferral until the time of termination.

Jaeyoung Han, head of the K Capital Market Division of the Korea Financial Investment Association, said, "The number of ISA subscribers exceeding 10 million is an achievement that shows that ISA has established itself as a national investment account," adding, "Along with the soon-to-be-introduced Productive Financial ISA, we expect a virtuous cycle effect of supporting people's asset formation while at the same time allowing market funds to flow into the domestic capital market."