Fidelity moves first on MPF fees: No. 7 player cuts 7.6%–20.6% across the board

Hong Kong’s seventh-largest MPF trustee moved first: from Saturday 12 November 2011, Fidelity cut MPF fees across the board by 7.6%–20.6%. Conservative funds fell from 1.36% to 1.08%, other funds from 1.57% to 1.45% — with some 300,000 existing clients benefiting immediately.

Which Fidelity MPF funds got the biggest cut?

Although 91% of Fidelity clients sat in non-conservative funds, the 20.6% cut went to conservative funds — they cost the least to run, leaving the most room to cut. 陸劍平, Fidelity’s head of institutional business, stressed the move was not about poaching clients nor about being the cheapest.

Not a price war? Fidelity’s three claims

陸劍平 denied the ECA was the main driver: the firm had cut fees back in 2007, this round had been under review for nearly a year, and the real cause was business growth and asset accumulation cheapening administration — the ECA was at most one inducement among several. He did not think a fee war had broken out — though BCT’s press conference the same day suggested the tinder was already dry.

Investment advice: don’t turn into a punter

On investing, 陸劍平 urged members to check whether their original goals still applied before switching: long-term investors can ride out volatility, but switching on market moves turns members into short-term punters — and losses grow larger. The advice landed hard in November 2011, with MPF down about 3.5% year to date: the more frightened the market, the more long-term discipline mattered.

What members can do

Fidelity moved first, yet 陸劍平 himself said cheapness was not the pitch — fees are only half the equation. The other half is whether your mix still fits your horizon and risk appetite. Rather than counting saved basis points, use the price war as a prompt to review the whole portfolio. The MPF education hub shows how.