Four players have emerged as leading contenders in the race to get a bigger share of the Mandatory Provident Fund (MPF) market, set to be launched in December. Among the contenders HSBC Provident Fund Services is well ahead of the pack and may emerge with the biggest slice of the cake. The other leading players are insurance giants Manulife and American International Assurance (AIA) and a consortium of smaller SAR banks called Bank Consortium Trust Company. A top HSBC official told Sunday Money the banking group was well on track to achieving its 40 per cent market share target, which was by far the highest declared by competitors in the MPF market. 'HSBC is a major supporter for MPF as a system in Hong Kong. We want the MPF to be a success and that's why we put so much effort into making it work. We are well on target and very happy with the response we get from our customers and the non-customers,' said David Humphreys, chief executive of HSBC Provident Fund Services. When asked if it would exceed its target, Mr Humphreys said: 'HSBC normally underpromises and over provides'. 'We have a large number of new clients and a good cross-section in our client base. A lot of companies in existing Orso [Occupational Retirement Schemes Ordinance] schemes with other companies have come to us,' he said. With three months left before the scheme starts, the providers have stepped up their campaign to rope in employers who have not chosen a provider. According to a Mandatory Provident Fund Authority (MPFA) report, to July 31, only 50,941 employers out of about 300,000 have signed up for the scheme. Anticipating a big last-minute rush of employers and employees signing up, the authority said it was trying its best to publicise the scheme, especially among small employers. The MPFA is also holding a three-day MPFA Super Expo ending today, where seminars and talks were held by prominent industry professionals. 'There are about 30 per cent of the small to medium-sized companies left who are still choosing their MPF providers, but 70 per cent of the market has already decided who they are engaging [as a service provider],' Mr Humphreys said. Following on HSBC's heels is insurance giant Manulife, which is set to emerge as a leading contender among the insurance companies. Manulife said it had 20 per cent market share of all the Orso schemes, and was on target. 'We are on track to achieve our 20 per cent target market share and in fact are well ahead in our progress,' said Alan Ng, assistant vice-president of sales and marketing, provident funds, at Manulife. 'The key factors to our success so far are a good track record, a good Orso record and our agents are the critical force behind our sales results.' Manulife's 2,000-strong agent pool is not the largest among the insurance companies, such as AIA, which has about 5,000 field agents. The professionalism and quality of experienced agents have resulted in encouraging sales results, which were a large boost to Manulife's MPF business, Mr Ng said. 'The number of new schemes sold per agent is higher than other insurance companies,' he pointed out. Both AIA and Bank Consortium Trust said they had achieved 5 per cent market share, which was the critical mass figure which would enable providers to survive. 'As far as our business model is concerned it is to be a long-term player - we are there,' said Peter Crewe, AIA sales and marketing director. 'We [already] have 15 per cent of the Orso market and we expect to grow on that - we expect to get 15 per cent of the MPF market share. 'There are a few providers who are riding on volume business.' Following a good performance of the sales pitch to employers, Bank Consortium Trust, which was formed in June last year by 10 smaller SAR banks to focus on the MPFA business, has raised its target from 5 per cent to 15 per cent. 'We cater for small to medium-sized companies as well as major broadcasting and infrastructure companies,' said Ka Shi Lau, executive director of Bank Consortium Trust. 'From a 5 per cent target last July, we have increased it to 15 per cent by mid-March. We are very encouraged by our progress,' Ms Ka said. There is a consensus among leading players that a price war is not the appropriate measure to fight for business, as the profit margin is only 1.5 per cent to 2 per cent in the MPF market. The bigger factors are investment returns and service quality. A price discount can be easily offset by a poor-performing fund as the return of funds varies more, Mr Humphreys at HSBC said. 'There are deals in the market which are done at unprofitable prices,' said Mr Ng, and 'we are trying to change the focus of the market to educate employers to look at other things rather than price alone.' MPFA has also started an on-site inspection programme of MPF service providers since early July with the third round to start at the end of September. 'So far, no licences have been revoked as only minor problems have been detected,' said Raymond Tam Wai-man, MPFA director for services supervision. 'We find that some trustees do not have sufficient manpower with the date-line approaching, especially at the junior staff level.'