Warning on unscrupulous MPF pitches

Hongkongers should guard against unscrupulous sales practices under the new scheme that allows people to choose their Mandatory Provident Fund service provider, a legislator warns.

Accountancy sector representative Kenneth Leung Kai-cheong said people needed to be on their guard as about 30,000 MPF agents tried to attract business under the new arrangement.

"I think the unscrupulous sales practices for this scheme will be similar to how the agents sell other financial products. That means they may exaggerate the return of the MPF products to make the product look overly attractive," Leung said.

Under the MPF's semi-portability plan, the city's 2.4 million workers can transfer their accumulated contributions to a new provider once each year. However, the employers' contribution needs to stay with the original provider. The transfer takes six to eight weeks.

The Mandatory Provident Fund Schemes Authority (MPFA) has stepped up supervision by requiring approval for all MPF marketing materials, but Leung said loopholes may exist.

"For example, although everything is written in the promotion materials, agents may not explain all the information to their clients, and skip the parts they don't want the clients to know about, like management fees," Leung said.

The MPFA has already issued guidelines that MPF agents must follow, or have their licences suspended or revoked. Agents will be supervised by regulators who will conduct on-the-spot inspections, among other controls.