Choosing an MPF provider: cheap isn’t the only criterion

The “MPF Employee Choice Arrangement” was expected as early as the second half of 2012, and HSBC, AIA and other providers had already started cutting some MPF fees. Fee cuts are welcome — but price should never be the sole criterion when choosing a provider.

What should you look at in an MPF provider?

Towers Watson’s Hong Kong head Philip Tso reminded workers that among the 21 providers, not all offered a full fund range — some did not offer capital-preservation funds suited to low-risk investors at all. Picking the cheapest provider that lacks the funds you need leaves you with nowhere to switch to later.

What will employee choice change?

Competition. Once the arrangement launched, providers would cut fees further and expand product ranges to win customers. For workers that means more choice and more bargaining power — provided they first understand their own needs: risk tolerance, life stage, and the fund types they want.

Stay clear-headed amid the fee-cut wave: fees matter, but so do fund range and service quality. Compare providers’ fund line-ups and fees with MPF fund search.