Employee Choice Arrangement: HSBC’s 2011 estimate that only 30% of staff would switch

With MPF “semi-portability” about to launch, trustees and intermediaries were already limbering up. HSBC’s internal assessment: only about 30% of employees would switch trustees after implementation — but a live poll at an investment-funds forum showed nearly 60% of fund managers and intermediaries believed fund performance was what would really drive employees’ choice of trustee.

When was MPF semi-portability implemented?

MPF semi-portability (the Employee Choice Arrangement) lets employees transfer the accrued benefits of their own contributions to an MPF scheme of their choice; in 2011 it was expected to take effect the following year. Trustees were already preparing: 傅偉民, HSBC’s head of wealth-management business development for Hong Kong retail banking and wealth management, revealed an internal assessment that only about 30% of employees would switch trustees; the bank would not run MPF as a standalone business but train most frontline staff in MPF knowledge — employees might only know the HSBC brand, so being able to get MPF information at any ordinary HSBC branch would burnish its image. No hiring spree was planned for the launch.

What drives employees’ choice of trustee: service or performance?

傅偉民 argued employees would choose on service quality, with fees and fund performance secondary considerations: many workers knew little about MPF, and quality support that answered their doubts would build confidence and win their business; where the same fund type performed similarly across trustees, service would be the decider. Yet the live poll at the Hong Kong Investment Funds Association forum showed 58% of fund managers and intermediaries thought performance was the main factor — the service camp and the performance camp were already split in 2011. Before switching, members could compare trustees’ fund performance and fees via MPF fund comparison.

Industry urged regulators to finalise the rules

范曦云, a senior branch manager at Sun Life Financial, said the firm would step up MPF product promotion — being able to deal with employees directly meant bigger growth potential. HKIFA chairwoman 程劍慧 hoped the authorities would finalise the portability regulations quickly so the industry could prepare and the public gain more choice.