JPMorgan plotted a four-pronged grab for MPF switchers

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

Era context: The original report was brief, sketching the scene on the eve of the Employee Choice Arrangement’s November 1, 2012 launch. Providers and investment managers expected a wave of employee-initiated transfers, and a battle for clients was breaking out — JPMorgan Asset Management was among the most vocal contenders.

The arrangement, known as the MPF “semi-free choice” scheme, triggered fierce competition among asset managers. JPMorgan was confident it could win share with a four-pronged approach, estimating the scheme could bring nearly HK$12.5 billion in new assets — a 12% increase in its assets under management.

Would JPMorgan split with AIA?

JPMorgan and AIA had teamed up more than a decade earlier to attack the MPF market, holding the third-largest market share. But AIA had been adding investment managers since 2005, fuelling speculation the pair might part ways. The company’s institutional and retirement business vice-president denied this in an interview, saying diversified manager appointments were the industry trend — JPMorgan also served BOC-Prudential, BCT (Bank Consortium Trust), MassMutual, and AXA’s two funds.

She stressed the partnership with AIA remained intact, with AIA handling trustee and administration services. In hindsight, the split never happened, but the move toward manager diversification she described did become the industry’s direction.