Fund houses on semi-portability: fee war imminent — workers are the big winners

(Editor’s note: this report was originally in English and is rewritten in Chinese per this site’s practice.)

With MPF semi-portability (the Employee Choice Arrangement) nearly here, fund houses expect a fee war to break out. One senior executive put it bluntly: once workers can vote with their feet, providers must cut management fees to win them — and workers will be the big winners.

How will the fee war play out?

Fees first, service second. Fund houses expect early competition to centre on price: the fastest, deepest cutters win the switchers. But cuts have a floor — trustees must sustain service quality, so rivalry will shift from price to service: fund choice, investment performance and customer care will decide who keeps clients.

How do workers benefit?

Choice is bargaining power. When employers chose, workers had no say and providers had no reason to cut; with employees choosing, providers must trim fees and lift service to attract and retain. One fund house says it’s ready for the choice era and urges workers to shop around — hassle or not.

To find the best-value provider in the fee war, see our MPF fund fees comparison at MPF fund comparison.