The Allianz Global Investors (RCM) chief executive said in November 2010 that Hong Kong has too many MPF trustees, and a consolidation wave will wash out the smaller ones in the coming years.
Why consolidate?
The market is too fragmented for small trustees to make money. Hong Kong’s many MPF trustees chase limited market growth; without economies of scale, small players can’t turn a profit. Rising regulatory and compliance costs will push them out faster.
What does it mean for members?
Fewer choices, hopefully better service. Fewer trustees could mean fewer plans to pick from — but bigger trustees bring deeper resources, better systems and service quality. Members should watch transfer arrangements during mergers to keep accounts moving seamlessly.
When will it happen?
Over the next few years. The Allianz CEO expects the wave to roll through in the coming years via sales and mergers, with the Employee Choice Arrangement intensifying competition and accelerating the shake-out. Compare trustees’ fund fees and performance at MPF fund comparison.
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