Fidelity Investments Management (Hong Kong) targets big companies for its MPF service and is in profit after two years of operations, according to managing director Douglas Naismith.
'Our record-keeping and administration is done by third parties. With the scale of the business we have today, I am pretty confident we made the right decision to outsource that to partners. It enables us to concentrate on investment, education and communications, which is what we are good at,' he says.
'If we had 50 per cent market share, we might want to do it all ourselves, but given our target, large companies, we are very happy with the relationships we have. Clearly on a weekly and monthly basis we have service-level agreements to make sure that it is a partnership, but it is also a commercial relationship.'
Mr Naismith estimates Fidelity has about 6 per cent of the MPF market. The company's typical MPF client is a company with at least 100 employees.
In the United States, Fidelity is the biggest provider of individual retirement account 401k business. It remains a major player in Hong Kong's Occupational Retirement Scheme Ordinance (Orso) market - which predates the MPF. Some of the Orso schemes it set up have been allowed to co-exist with the MPF, depending on the level of benefits offered.
'We are the largest provider in member choice services to the Orso market, which is almost the exact parallel of MPF,' Mr Naismith says. 'We have a unified platform for service, offering essentially the same type of choices for members: Internet services, phone services, an integrated product range. We have many customers who use both interchangeably. They use the MPF [system] for compulsory contributions and they use the top-up system for voluntary contributions.'