BCT’s third MPF fee cut: membership tops 550,000, 14 funds down up to 17%

With the Employee Choice Arrangement due in the second half of 2012, BCT and Fidelity opened fire in a management-fee price war, with cuts reaching 20%. For BCT it was the third fee cut since MPF began — membership across its two schemes had grown markedly to 550,000, which the firm called the right moment to adjust charges again.

The BCT cut in detail

From 1 January 2012, 14 constituent funds across BCT’s master-trust and industry schemes drop management fees 2%–17%, with new fees between 0.99% and 1.725% — about 370,000 clients (nearly 70% of members) benefit immediately. Ka Shi Lau, BCT’s managing director and CEO, said the cut would sharpen competitiveness ahead of the ECA.

Fidelity’s same-day move: effective Saturday, down 7.6%–20.6%

Fidelity’s cut took effect on Saturday 12 November, trimming 0.12–0.28 percentage points — equivalent to 7.6%–20.6%. 陸劍平, its Hong Kong head of institutional business, said the cut was not about poaching clients but about years of asset accumulation cheapening administration; he conceded next year’s ECA was also a factor.

Three layers of the price war

The war worked on three levels: immediate giveback — 370,000 BCT members and 300,000 Fidelity clients better off at once; signalling — trustees telling the market that ECA competition had begun; and structure — asset growth diluting admin costs, giving the cuts fundamentals rather than pure promotion.

What members can do

A third cut established a trend: BCT’s fees fall further each time, not as a one-off sweetener. Members should swap “how much did my fund cut?” for “where does my fund’s fee rank in its category?” — the question that actually matters in the ECA era. The MPF education hub shows how to compare.