BOCI-Prudential first to rebate management fees for HK$250,000-plus accounts

(Editor’s note: this report was originally in English and is rewritten in Chinese per this site’s practice.)

To boost client numbers, BOCI-Prudential — Hong Kong’s second-largest MPF provider — is rebating management fees: a 0.1 percentage point rebate for all MPF members whose accounts top HK$250,000. Chief executive Thomas Chan Yu-cheong said BOCI-Prudential is the first of the SAR’s top five providers to offer such a rebate, effective immediately.

Why now?

Positioning for employee choice from July 2012. Chan said the rebate should attract more high-income customers once MPF members can choose their own providers from July 2012. The government proposes lifting the minimum income threshold for mandatory employee contributions to HK$6,500 from HK$5,000, effective November 1; the upper threshold moves to HK$25,000 from HK$20,000, taking maximum monthly contributions to HK$1,250 from HK$1,000.

Will rivals follow?

A broad second-half fee cut looks unlikely. As of March 31, the average asset value across 2.51 million MPF members was HK$150,529. Chan said a fee reduction for all MPF customers in the second half is unlikely after the industry’s earlier cuts this year. Market leader HSBC says it is studying an MPF loyalty plan, with no rebate plans yet.

To compare management fees across providers, visit MPF fund comparison.