MPF fee rebates: Manulife’s 2012 play for preserved accounts

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

Era analysis: The original was a brief news item: Manulife was considering MPF fund fee rebates to lure preserved accounts. Months before the Employee Choice Arrangement took effect, preserved accounts were the industry’s prize — 4 million of them across Hong Kong, and whoever won them grew assets under management fast.

Manulife disclosed that at end-March 2012 its contribution-to-preserved account ratio was 4 to 6, with management judging preserved accounts potentially more lucrative than contribution accounts. The proposed rebate was simple: transfer assets of HK$50,000, HK$75,000 or HK$100,000 from another provider and earn 0.15%, 0.4% or 0.6% back, credited as fund units.

Manulife was also studying fully electronic application forms to cut intermediary-switching and paperwork time, errors and admin costs. Its MPF assets stood at HK$67.3 billion at end-March, up nearly 10% from HK$61.3 billion at year-end; two April launches — an Asia Pacific bond fund and a Hang Seng Index fund — had gathered HK$41 million and HK$68 million.

Seen today, the item matters because: before semi-portability even began, providers were already leading with fee incentives — foreshadowing years of fee-cut competition for MPF business.