South Korea’s investment advisory firm Fount Corp. has launched an artificial intelligence (AI)-powered personal pension service that allows investors to build and manage their pension portfolios through an application based on advice by the so-called robo-advisors.

Investors can set up and fund an account whenever they want and be provided with investment advice on portfolio rebalancing and allocation, available asset classes, and daily performance. The app is co-developed by Fount and Maeil Business Newspaper.

One of the most important benefits of this online investment platform is low cost, touted Fount. The company will offer the service free of charge by the end of this year and charge just 0.5 percent fee starting next year, much cheaper compared to investment advisory service by financial institutions which usually charge a fee of 1 percent to 1.5 percent per annum.

“The 1 percent fee could make a big difference in investment returns in the end especially for pensions because they are long-term investments,” said Kim Young-bin, chief executive of Fount. For instance, if an investor monthly pays in 100,000 won ($88.9) to an account that raises 5 percent annual return, the after-tax return would amount to 75.86 million won 30 years later, excluding a 0.5 percent service fee. If the service fee is 1.5 percent, the total return would reduce by 760,000 won to 75.10 million won.

By Kim Je-lim and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]