Ask Melanie

Why not put all your eggs in one basket?

Melanie Nutbeam, a certified financial planner based in Hong Kong, addresses common personal finance queries. Send your questions to [email protected]

PUBLISHED : Monday, 15 April, 2013, 12:00am
UPDATED : Monday, 15 April, 2013, 3:11am

Should I consolidate my MPF accounts?

Regardless of the sum in your Mandatory Provident Fund (MPF) accounts, it's worth considering consolidation.

The MPF Authority (MPFA) is on a mission to encourage people to do this. There are over two million scheme members and four million accounts. You, and all scheme members holding multiple accounts, will soon receive a letter from the MPFA recommending consolidation.

The MPFA believes consolidation will cut costs, benefiting all members in the long term.

However, as Billy Wong, chief executive of Sun Life Trustee, says: "Since almost all MPF fees are currently charged as a flat percentage of assets, it makes no difference in terms of cost at the moment to members who consolidate their accounts."

The argument for consolidation is that it might improve your chances of enhancing returns simply because it's easier to see the whole picture, to stay focused and make changes. Two accounts may just be manageable but receiving multiple statements and navigating through different websites to find relevant, let alone useful, information is mind-numbing.

Deciding which scheme to consolidate into is also challenging. There are 40 approved MPF schemes offered by about 19 approved MPF trustees from major banks and insurance companies.

You might start with a simple comparison of your scheme's benefits using the "comparative platform calculator", found on the MPFA website. This will show you the range of constituent funds you can access under each scheme and the schemes' service features.

It won't show you how costs at the scheme level compare - that information is in the fee table of a scheme's offer document.

The MPFA requires a uniform fee table, so doing your own comparison should be straightforward for a couple of funds, but probably requires a spreadsheet beyond that.

The good news is that MPF Ratings, a Hong Kong-based subsidiary of Australian research firm SuperRatings, recently launched its monthly research-based evaluation reports and "first ever independent assessment" of Hong Kong's MPF schemes called MPF Ratings.

It was done in conjunction with industry participants, including the MPFA, to look at investment returns after fees and to assesses scheme service standards. It badges schemes gold for best value, silver for good value and bronze for average value. Visit to see how your schemes stack up.

Some funds offer longevity bonuses that reward you for staying in a fund. But a fund may also offer a volume discount, with lower fees if you put enough money into a plan, making consolidation a good idea.

I'm in two schemes and stand to earn volume and longevity bonuses by switching holdings from one to the other. But MPF Ratings gives a bronze star to each fund, so I'm going back to the drawing board.