Financial watchdogs in South Korea are moving to overhaul stock market advisory services following complaints that investors are being trapped in costly subscriptions without their knowledge.

The Financial Supervisory Service (FSS) announced Wednesday a comprehensive set of reforms targeting stock information packages offered by domestic brokerages. Developed in coordination with the Korea Financial Investment Association and the securities sector, the new guidelines are slated to take full effect within the first quarter.

The regulatory push comes in response to rising consumer grievances. In one notable case, an investor reported paying monthly fees for a stock recommendation service for a decade simply because the brokerage never sent follow-up reminders. FSS inspections revealed a systemic pattern: brokerages heavily promoted initial sign-ups but neglected subsequent billing alerts, frequently transitioning users from free trial periods to paid subscriptions without securing clear, affirmative consent.

Currently, 12 South Korean securities firms operate these paid advisory services—which leverage AI models or third-party analysts to deliver stock picks and market analysis. Data shows the sector served roughly 103,000 users last year, generating a combined 67.1 billion KRW (approximately $48 million) in fee revenue.

Fees are typically structured in two ways: a fixed monthly charge of around 10,000 KRW or a volume-based proportional rate ranging from 0.05% to 0.25% per trade, which either replaces or stacks on top of standard brokerage commissions. The FSS warned that volume-based fees can silently drain capital from active traders. For instance, a trader executing 50 million KRW in monthly volume under a standard 0.015% commission would normally pay 7,500 KRW. If a 0.1% information fee replaces it, the monthly cost jumps to 50,000 KRW—a 42,500 KRW monthly surge that many users fail to notice because the charges are bundled directly into routine trading execution statements.

Under the upcoming regulations, brokerages must overhaul transparency across the entire customer lifecycle:

Upfront Comparison: During sign-up, firms must provide concrete simulation examples demonstrating how total trading costs will change before and after subscribing.
Regular Disclosures: Brokerages must periodically alert users via text message and app notifications regarding active subscriptions, outlining a clear breakdown that separates basic trading commissions from advisory fees.
MTS/HTS Overhaul: Mobile and home trading platforms must explicitly disclose when volume-based advisory fees are active and provide itemized breakdowns upon user request rather than displaying a single, combined lump sum.
Strict Free-Trial Rules: Free trials will automatically expire when their terms end. Brokerages are now strictly barred from rolling users into paid tiers by default; continued service will require explicit, affirmative consent from the customer.

Industry participants are expected to adapt their platforms over the coming months to comply with the FSS's consumer protection mandate.

[ⓒ Global Economic Times. 무단전재-재배포 금지]