Switching MPF providers: don’t look at fees alone

Semi-portability is deferred, but providers are already courting switchers — BEA Trustees offered up to 0.85% of transferred assets in fund-unit rebates for moves completed by 31 December, plus up to HK$10,000 extra for the top 10 monthly transfers.

What should switchers consider?

Don’t switch often — judge a provider over three years. Beyond chasing offers, members shouldn’t flip providers and funds frequently. Give the portfolio three years to perform, then judge the trustee by investment returns.

How to choose a provider?

Weigh performance with fees: 20% outperformance over five years is worth paying for. If a provider beats peers by 20% over five years, slightly higher fees are fine; if they’re neck and neck, pick the cheaper one. Unfamiliar with markets? Index funds tracking the market usually cost less than equity funds and return more steadily.

What’s the switching trap?

High in-out costs and conversion lags kill short-term timing. Never switch on a provider’s or fund’s short-term price moves — transfers don’t settle instantly like stock trades, so by completion the market has moved. Better: pick risk by age — younger means higher risk, reviewing the mix every 5 to 10 years as you age, or directing only new contributions to favoured funds.

Before switching MPF, compare provider fees and returns at MPF fund comparison.