Why Did AXA Slash MPF Fees in 2011?

How deep was AXA’s 2011 fee cut?

In January 2011, AXA replaced its fund manager IPAC with Templeton and slashed new-fund management fees to a flat 0.99% — an average cut of 46%. AXA Hong Kong’s Lee Ping-hei admitted performance had lagged the market; Gain Miles ranked its “Easy” conservative fund fifth-worst over 10 years with just 3.37% return, holding a 3% market share at No. 10. The discount applied to new clients for the first five years only; guaranteed, conservative and money-market funds stayed at 1%.

What was AXA’s ambition?

To grow assets from HK$10 billion to HK$40 billion and market share from 3% to 6% by 2015, joining the top five.

How did the industry react?

Bank Consortium Trust and AMTD said they were watching; BOC-Prudential’s Alex Chu questioned whether outsourced management could sustain the cuts; more price wars were expected once the ECA landed. Members can compare scheme fees at MPF fund comparison.