53% of Workers Planned to Switch: Employee Choice Survey Decoded

This article is a rewrite of a report from October 2012.

Convoy’s semi-portability survey found 53% of respondents would move contributions within 12 months of launch. At the same event, the Convoy MPF Index printed 166.76 for September — up 8.2% from end-2011 but trailing the Hang Seng’s 13.5%.

Why did so many want to switch?

84% blamed poor fund performance. Another 58% wanted more fund choice; 52% found fees too high. Among those staying put, 49% didn’t understand the new rules, 52% feared hassle, 61% wanted to wait and see.

What did the index say?

The five-year loss narrowed from 15.64% to 11.46%. CEO Christine Fong noted the 2008 crisis dragged the five years from October 2007, with the recent global equity rally narrowing the gap.

What should switchers weigh?

Performance first, fees second. Convoy’s Chung Kin-keung said fee cuts were a market trend, not just a semi-portability effect; performance matters more than fees — don’t begrudge management fees if returns deliver. BEA also launched a 0.6%–0.99% master trust plan the same day.

What is the lesson from 2012?

2012’s top switching motive matches today’s: performance. 84% for performance, 52% for fees — that ordering hasn’t changed in over a decade. Switching saves small certain money; picking the right fund earns the big money.