Brokerage firms to disclose stock information service fees separately; automatic conversion to paid service banned

[Financial News] Brokerages will be prohibited from letting customers try stock information services, such as stock recommendations and supply-and-demand analysis, for free and then converting them to paid services without the customers’ explicit consent. Service fees that were included in trading commissions and therefore difficult for investors to identify must also be disclosed separately at each stage before and after enrollment.
The FSS said on the 11th that it had reviewed how stock information services are operated and drawn up improvement measures with the Korea Financial Investment Association and the securities industry.
The review followed a complaint from someone who said they had signed up for a brokerage’s stock information service 10 years ago, received no separate notice, forgot they had enrolled, and continued to pay the fee.
Twelve brokerages currently offer stock information services for a fee. The services have a total of 103,000 users, accounting for 0.23% of all brokerage customers. Last year, brokerages earned about 67.1 billion won in fees from these services. This year’s service-fee revenue was estimated at approximately 150 billion won on an annualized basis.
Brokerages use artificial intelligence (AI) and other tools to generate their own stock-by-stock supply-and-demand analyses or stock recommendations, or provide related information through partnerships with external companies such as quasi-investment advisory firms.
Fees are charged either as a percentage of approximately 0.05%–0.25% of the transaction amount for each service, or as a flat monthly fee of around 10,000 won, depending on the number of services. The percentage-based fee typically replaces or is added to the basic trading commission, which is usually 0.01%–0.2%; the flat fee is charged separately from the basic trading commission.
For example, an investor subject to a basic trading commission rate of 0.015% who trades 10 million won in a month would pay a basic commission of 1,500 won. If a service fee rate of 0.1% applies, the total cost would rise to 10,000 won, an increase of 8,500 won. An investor subscribing to a flat-fee service costing 10,000 won a month would pay 11,500 won including the basic trading commission.
The FSS plans to require brokerages to compare, using specific examples, the trading commission before enrollment with the combined total of trading commissions and service fees after enrollment. Even after enrollment, customers must be regularly notified through app alerts and text messages that they are using the service, as well as of the commission rates before and after signing up.
Screens for checking fees on mobile trading systems (MTS) and home trading systems (HTS) will also display how service fees are charged. If investors request a detailed breakdown, brokerages must show the basic brokerage commission and the stock information service fee separately; presenting them as a combined amount will be prohibited.
Automatic conversion to paid membership without separate notice after a free-trial event ends will also be restricted. In principle, the service must end when the free trial expires, and may continue only for investors who explicitly consent to the paid conversion.
All current users will be notified in a batch by text message or AlimTalk of their enrollment and the URL for cancellation, among other details.
The FSS aims to complete the improvements by the first quarter of 2027. It plans to draw up detailed implementation measures with the Korea Financial Investment Association and others, and to continue monitoring how brokerages put them into practice.

[email protected] Lee Jeong-hwa Reporter