Robo-advisor CEOs team up to transform retirement pension market

From left, Uprise Investment Management CEO Moon Yil-ho, Uprise CEO Lee Choong-yeub and Doomoolmori Investment Advisory CEO Lee Seung-kyu speak to The Korea Times at Uprise's headquarters in Seoul, Friday. Courtesy of Uprise

It wasn’t Lee Choong-yeub’s first startup. Having successfully exited two previous ventures aimed at leveraging information technology to modernize underdeveloped sectors of traditional industries, he set his sights on a new challenge. In 2018, Lee observed inefficiencies in the investment sector and founded Uprise, launching a robo-advisor platform called dndn to bridge service gaps.

Moon Yil-ho, a veteran fund manager at Samsung Asset Management for a decade, shared a similar vision. A former classmate of Lee’s, Moon had grown disillusioned with the repetitive cycle of creating and selling exchange-traded funds despite the market’s growth. He believed there was untapped value in integrating investment elements and delivering them effectively to customers. This conviction led him to join Uprise three and a half years ago.

Meanwhile, across Seoul, a team came together in 2015, inspired by the financial innovation of U.S.-based robo-advisors. They called themselves Doomoolmori and launched their own robo-advisor service, Boolio. Among the founding members was Lee Seung-kyu, then a graduate student in statistics. Confident in his ability to analyze data and approach investments from a statistical perspective, he took charge of developing and implementing their solutions.

In late November, these three individuals, each from different backgrounds, made an unexpected announcement — the merger of their respective robo-advisor platforms. The merged service will hold managing assets worth 530 billion won ($370 million), becoming the largest of its kind in the industry.

As part of the merger, Uprise’s Lee Choong-yeub will serve as CEO of the newly established entity named Horizon Wealth. It will subsequently acquire two investment advisory subsidiaries, each led by Moon and Doomoolmori's Lee Seung-kyu.

From left, Doomoolmori Investment Advisory CEO Lee Seung-kyu, Uprise CEO Lee Choong-yeub and Uprise Investment Management CEO Moon Yil-ho attend a press meeting announcing their merger at a cafe in Seoul, Nov. 26. Courtesy of Uprise

The strategic decision was driven by recent regulatory changes. Financial authorities had introduced a sandbox program permitting individual retirement pension investments through robo-advisors.

The accumulated funds in the pension currently total around 400 trillion won and are steadily growing. But at the same time, most subscribers are facing old-age poverty, with only 10 percent of subscribers actively managing their investments. The potential for growth was clear.

"Robo-advisors are an industry at the intersection of finance and IT services," Moon told The Korea Times. "At dndn, we’ve excelled in delivering solutions to customers. When I analyzed the market, I saw that Doomoolmori, while once a competitor, excelled in developing cutting-edge solutions. I thought merging our strengths would create significant synergy."

Lee Seung-kyu agreed. "Many clients approach us with details of their disposable income, earnings and long-term financial goals, asking for guidance on growing their retirement funds steadily over time. To meet these needs, we’ve developed algorithms that provide personalized advice."

He added that the merger process was surprisingly smooth, saying, "There was hardly any disagreement. Both companies shared a similar vision for business synergy and an aligned outlook on the industry’s future."

Lee Choong-yeub viewed the sandbox as a pivotal moment in the robo-advisor market. In the U.S., robo-advisors manage over half of defined contribution retirement plans.

Other countries that produce successful robo-advisor companies, like Singapore and Japan, have also opened their pension market to the industry, he added.

"In the U.S., many retirees discover they’ve grown wealthy because their retirement funds have been actively invested in U.S. stocks. In Korea, however, most people don’t actively manage their retirement funds. Instead, the majority remains in savings accounts earning just 1 to 2 percent annually, leading to significant opportunity costs," Lee Seung-kyu said.

"Korea faces many challenges, but the aging population is the most pressing. We will focus on closing the gaps in retirement preparedness, helping to address this critical issue."