For more than seventy years, Korea’s securities firms earned their living in the same way: by collecting brokerage fees from stock trades. This was the “cash cow” of the industry, as natural and predictable as the flow of seasons. But in 2025, for the first time, investment banking (IB) revenues have overtaken brokerage commissions as the largest source of profits for securities companies (Korea Economic Daily, Sept 2, 2025).
The figures speak clearly. According to the Financial Supervisory Service and the Korea Financial Investment Association, IB operations accounted for 31% of net profits in Q1 2025, while brokerage fell to 37%—a reversal from the traditional pattern that held since the 1950s. A decade ago, brokerage was dominant: in 2014, brokerage made up 41% of revenues, while IB was only 12%. Today, the balance has flipped.
What does this mean? At first glance, it is simply a business shift. IPOs, M&As, and infrastructure financing are more lucrative than retail stock trading. But beneath the numbers lies a deeper story: the erosion of trust in Korea’s stock market.
Ordinary investors increasingly see equities as a losing game. The retail brokerage model, once the foundation of the industry, is faltering because fewer Koreans believe that trading stocks will secure their future. Volatility, scandals, and the sense of unfairness drive them away. Instead, securities firms chase corporate deals, project financing, and overseas investments—areas less dependent on household trust.
This change mirrors society itself. In a nation where households already pour their wealth into real estate, the decline of brokerage is not surprising. If families distrust the market, securities firms must look elsewhere for growth. Investment banking becomes not just a strategy, but a survival mechanism.
And yet, there is irony here. The IB business relies heavily on large corporations and government projects. It is farther removed from the lives of ordinary people. If brokerage once tethered finance to the citizen, IB severs that bond. Finance becomes an elite game, played by a few at the expense of the many.
What happens when an industry abandons its connection to trust? Korea’s financial markets risk becoming hollow: bustling in numbers but empty of faith. The old “cash cow” of brokerage may be gone, but what has replaced it is not a new foundation of confidence, only a different way of earning fees.
In the end, the deeper question is not about revenue mix but about belief: can Koreans ever trust their stock market enough to make it more than a casino? Until then, apartments will remain the pension, and IB the profit engine, while trust itself remains the rarest commodity.
