BCT and Fidelity cut MPF fees

十一月 12, 2011
Joe Chan

Bank Consortium Trust (BCT) and Fidelity Worldwide Investment (Fidelity) have announced fee reduction plans for their existing MPFs in order to enhance competitiveness while also eyeing to grab increased market share once the Employee Choice Arrangement (ECA) comes into force in H2 next year.

BCT is lowering fees on 14 out of its 29 MPF funds under its master trust and the industry schemes from 1 January 2012, with the reduction percentage ranging from 2% to 17%. The new management fees will range between 0.99% per annum (p.a.) and 1.725% from the existing 1.2% to 1.84% p.a. The price-cut announcement applied to some of the firm’s equity, mixed asset, lower risk and target date funds.

Ka Shi Lau, managing director & CEO at BCT, expects 70% of its existing clients – more than 370,000 – will benefit from the price-cut. She also notes this is the second fee reduction move since 2008 as it found increasing MPF assets and simplicity of some of its administration process have helped to enhance cost-effectiveness. The CEO also predicts overall MPFs fees will tend to decline given the growing size of assets and the firm will continue to review it.

Apart from the price-cut plan, she also says the firm’s MPF schemes and fund will be renamed with effect from 1 May 2012, shortening the format to aid client undertstanding. The firm also plans to provide retirement planning services, aiming to offer special rates to encourage members to increase voluntary contribution while also eyeing retired members with preserved accounts.

Meanwhile, Fidelity is also lowering fees on all MPFs under its master trust scheme. It cut 0.12% for all mixed asset, equity and bond funds while reducing by 0.28% MPFs in the conservative category. In general, those cuts in prices are equivalent to a reduction in fees of 7.6% to 20.6%, with effect from 12 November 2011. The firm predicts 300,000 members will benefit from.

KP Luk, head of institutional business at Fidelity, explains the price-cut is driven by growing assets and achieved administrative efficiencies, while also preparing for ECA once it comes into practice next year. He notes the price-cut will lead the FER of their MPFs lower than the market average. According to MPFA website, the average FER for all the MPFs was at 1.78% as of October. He also considers adjusting the number of investment choices next year but says it depends on investors’ knowledge.

Year-to-date (YTD) some providers have already cut their prices in cope with the MPFA’s message to see a ‘deeper and quicker’ drop in management fees in the future. For example, American International Assurance Company (Trustee) (AIA) has cut the prices for its three funds from 1.75% to 0.99% p.a. in September while Bank of East Asia (Trustees) (BEA Trustees) has also applied over 30% of fee reductions for its three MPFs in June this year.

Our Blog. Stay informed with MPF.HK insights.


根據強積金研究機構《積金評級》(MPF Ratings)資料,截至今年3月底止,MPF資產累積至1.17萬億元...

永久離港 取回MPF

在MPF法定框架內,到底何謂「永久離港」? 「現行的《強制性公積金計劃條例》,並無白紙黑字列明,何謂『永久離港...

強積金年蝕逾9% 人均輸28257元 海嘯後表現最差 明年扭虧有難度