Comprehensive Trust Services in Korea See Minimal Uptake Despite Growing Demand (Image supported by ChatGPT)
SEOUL, Aug. 15(Korea Bizwire) — August 2025 marks the 20th anniversary of the introduction of comprehensive property trust services in South Korea, but industry experts warn the system remains largely symbolic, hindered by outdated regulations.
Despite growing interest in asset management services amid rising household wealth, comprehensive property trusts—which allow financial institutions to collectively manage clients’ diverse assets like cash, stocks, and real estate—have seen minimal traction.
As of end-2024, total trust assets in South Korea stood at 1,378 trillion won, yet only 800 billion won (0.06%) were held in comprehensive property trusts.
A recent report by Lee Young-kyung, senior researcher at the Korea Institute of Finance, criticized the status quo, noting that most licensed financial institutions focus on alternative products such as monetary trusts or will-substitute trusts. “Twenty years after its launch, the comprehensive property trust sector is practically nonexistent in Korea’s trust market,” Lee stated, calling for urgent reform.
In contrast, Japan’s property trust sector has flourished, with so-called “comprehensive trusts” accounting for 58% of trust holdings as of December 2024.
Lee attributes Korea’s stagnation to the Capital Markets Act, which prohibits re-trusts—the practice of outsourcing specific asset types, like real estate, to specialized investment firms. While a 2011 revision to the Trust Act technically permits re-trusts, the Capital Markets Act lacks supporting provisions, creating a legal bottleneck that deters financial firms from entering the space.
“Japan faced a similar situation initially, but legal amendments in the 2000s expanded delegation rights and allowed re-trust banks, dramatically boosting service uptake,” Lee noted.
To invigorate the sector, Lee also proposed opening the market to non-financial firms, particularly in niche areas such as estate succession, where specialized services could complement financial institutions.
Industry observers say that without structural reform, South Korea’s comprehensive trust system will remain a missed opportunity in the country’s evolving wealth management landscape.
Ashley Song (ashley@koreabizwire.com)
