Employee Choice Arrangement Coming: How to Find a Competent MPF Intermediary

With MPF semi-liberalisation (the Employee Choice Arrangement) the talk of the town, employees will soon choose their own MPF schemes — and intermediaries are knocking on doors everywhere. How do you find one who actually knows their stuff?

What licences should an MPF intermediary hold?

Two types: an MPF schemes sales licence, and a securities/policies advice licence. Intermediaries must pass MPFA-arranged exams to earn an intermediary card authorising them to sell MPF schemes. But not every intermediary may give investment advice — some may only sell schemes, not advise on investments. If you want fund investment advice, look for someone also licensed to advise on securities and insurance policies. When dealing with an intermediary, ask for their MPF registration number and what their certificate authorises them to advise on.

How do you tell a knowledgeable intermediary from a dud?

See whether they discuss fees, performance and risk — or just sell. A competent intermediary analyses different schemes’ fee structures, fund track records and risk levels, matching them to your age and risk tolerance; a dud just pushes perks and pressures you to sign. Also watch for bias toward their own company’s products — ask “why is this one better for me than that other provider’s?” and see if the answer holds up.

What should you watch for once ECA launches?

More choice means more responsibility. Under the Employee Choice Arrangement, employees can annually transfer their mandatory employee-contribution accruals to a scheme of their choice. Choice is good, but do your own homework — don’t switch on an intermediary’s patter alone. Compare fees, performance and service before transferring, like any savvy consumer.

To compare charges and returns across MPF funds, visit MPF fund comparison.