HSBC Cut MPF Fees — Is a Price War Starting?

What did HSBC cut in 2011?

In February 2011, market leader HSBC announced fee cuts from 1 March: conservative fund 1.25%→0.79%, global bond fund 1.25%→0.99%, Hang Seng Index fund 1.5%→0.9% — up to 40% off, for new and existing clients alike. Insurance chief Chu Wing-yiu said it was purely commercial, not pressured: scale had improved cost efficiency, so clients shared the benefit. HSBC and Hang Seng held over HK$115 billion in MPF assets by November 2010 — 32.4% market share.

Why talk of a price war?

Manulife and AXA had cut earlier in the year, but the market leader’s move could set the benchmark and trigger a client grab ahead of semi-portability. Members can already hunt bargains at MPF fund comparison.

Why do preserved accounts matter?

Over half of HSBC/Hang Seng’s assets sat in preserved accounts — those neglected old pots are the biggest winners from fee cuts.