Fidelity: MPF Fees Still Have Room to Fall — Check Strategy Before Switching

This article is a rewrite of a report from October 2012.

With semi-portability landing in November 2012, Fidelity’s Hong Kong institutional head said the firm had doubled client-service staff and upgraded its mobile app and website — and that MPF fees still had room to come down, under constant review.

How many would switch?

30% considering, 10% moving. Street talk put potential switchers at 30% of MPF clients; an MPFA survey said just over 10% would move accounts, versus about 7% in Australia. The executive called it a reference point — with Hongkongers holding 1.6 preserved accounts on average, long unconsolidated for unclear reasons, predicting actual switching was guesswork.

What makes a fee reasonable?

Strategy first, returns second. Before switching providers, members should check whether their current provider fits their investment strategy, then weigh returns. Transfers took at least 6–8 weeks — selling out, moving cash, re-entering — with market risk in between; members should judge on 3–5 year returns.

What is the catch in switching perks?

Rebates are not cash, and they take time. Many providers lured switchers with rebates or fee cuts — but perks were usually fund units, not cash, credited months later or at year-end; leaving early forfeited them.

How was Fidelity positioned?

Fund choice, new products, foreign ideas. The executive said Fidelity led on fund selection, product launches and imported operating concepts. It ran 300,000 MPF accounts — about 120,000 contribution and 180,000 preserved — mostly at medium and large firms, with 4.6–4.7% market share, ranked seventh.

What is the lesson from 2012?

Cheapest is not the point — fit is. On the eve of 2012’s semi-portability, everyone talked price cuts; Fidelity’s message was different: fees had room to fall, but switching should never be about price alone — strategy fit and 3–5 year returns are the real reasons to move.