BOC-Prudential’s Tiered Fees: 0.15% Rebate for HK$1M-Plus Accounts

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

With semi-portability nearing and some trustees quietly moving, fourth-ranked BOC-Prudential ruled out across-the-board cuts — opting for tiered fees instead: a 0.15% rebate for accounts above HK$1 million, 0.2% above HK$2 million.

Why tier MPF fees?

Big and small accounts cost the same to run — flat fees “rob the rich to pay the poor”. BOC-Prudential’s chief executive noted MPF assets kept swelling while balances varied wildly: over HK$70,000 per account on average, with individual clients above HK$5 million. Admin work barely differed by balance, so big accounts were far more cost-efficient; keeping tiny accounts was expensive. Flat fees had become anachronistic; tiering fixed the “rob-the-rich” distortion.

How did the industry read it?

Not a price cut — a rule rewrite. While rivals debated how much to cut before semi-portability, BOC-Prudential asked what was fair to charge. Rebating big accounts lowered fees in effect, while signalling that charges should reflect costs, not one-size-fits-all.

What is the lesson from 2012?

The fee war had more than one playbook. BOC-Prudential’s 2012 tiering was the second road beside outright cuts: not lower for all, but rebates by account size. For members comparing fees, the percentage is not the whole story — ask which tier your account sits in.