Following 30 years of debate on how to combat the growing problem of providing financial security for the ageing population, the Hong Kong Government has forged ahead with developing the Mandatory Provident Fund (MPF) scheme.
With only 29 per cent of Hong Kong's three million employees covered by retirement plans, Fidelity Investments, one of the largest pension providers in the world, expects to face a highly competitive market divided between a number of major players.
'We think the MPF legislation is an extremely good step forward for Hong Kong and its people.
'The companies who get in to it [the MPF market] will be looking at it as a long-term business. It will take people a long time before they break even,' Brett Goodin, Fidelity's managing director (Asia-Pacific and Australasia), said.
'The market will narrow because of the size of the customer base and the bells and whistles the Provisional Legislative Council is looking at having with this product.
'It is not going to be a standard member-choice product; it is going to be relatively sophisticated.' Fidelity, which provides a 'cradle-to-grave-service' with a portfolio of 50 mutual funds to choose from - ranging from the most high- risk high-growth equity funds to the most conservative triple A-rated money funds - is confident it will meet most customer investment needs.
The challenge for the fund management company, as seen by Mr Goodin, is getting the right funds to the right customers at the right price.