Competition hots up as managers fend off flak
Competition in Hong Kong's HK$229 billion Mandatory Provident Fund is heating up, with another major provider cutting fees in response to criticisms of overcharging.
Fidelity Investments Management has cut fees on all MPF products, joining market leaders that have been attacked over the high costs for overseeing easy to manage capital preservation funds.
While Fidelity only has 4 per cent of the market and is the seventh-largest MPF provider, it is now offering some of the most competitive fees - a move that could signal a new level of competition in the sector.
MPF providers have come under heavy criticism from investors for charging too much to manage 'plain vanilla' funds that preserve a client's capital but usually have poor returns.
The Mandatory Provident Fund Schemes Authority is studying a proposal to allow employees to choose their own MPF provider to increase competition and lower fees. Employers now choose the provider.