"Mercenary" Bond Brokers: Have Experience, Will Travel

Securities firms in the financial district of Yeouido employ bond broker teams, so-called "mercenary troops." The teams, composed of six to 10 people, move from brokerage to brokerage, typically for short periods, pursuing higher pay.

Market observers say that movement of such bond broker teams sway performances of the relevant securities firms and further influence the bond market situation. Five small brokerages － Boo Kook Securities Co., Shin Heung Securities Co., Hana Securities Co., Kiwoom.com Securities Co. and CJ Investment Trust Securities Co. － have emerged as strong firms, thanks to the mercenary troops.

According to the brokerage sector, 14 companies, most of which are small-sized or start-ups, currently have bond broker teams that they have hired away from other securities firms, for one-year contracts in most cases. "It takes at least three to four years to train workers for bond brokerage services," a securities firm official said. "So, brokerage start-ups prefer enticing a bond broker team from another company, to save time."

Securities firms compete fiercely to hire bond brokerage teams away from one another.

Because of the competition, pay for such broker teams is sharply rising. According to securities firms, a hired bond broker team generally takes 30 to 50 percent of the income from a brokerage.

One securities company said the operating income that the company's hired bond broker team earned last year reached 11.9 billion won ($9.15 million) and each of the team's nine members took about 300 to 400 million won.

"Some criticize the mercenary-style bond broker teams for increasing pay," said Jeong Kang-hyun, the president of KeonSeol Securities Co. "But such teams' expert knowledge and flexible employment system have contributed much to development of the bond market."

by Kim Yong-seok