Ping An’s Lu wealth management unit offers two zero-commission months on Hong Kong launch, might ignite price war
- Lu International (Hong Kong), a subsidiary of Lufax Holding, part of Ping An, launched on Monday and is charging zero commission until the end of September
- It will be difficult for companies to keep a zero-commission rate for a long period, Hong Kong Investment Funds Association chairman says
The entry of a wealth management unit of Ping An Insurance, mainland China’s largest insurer, promises to ignite a price war in Hong Kong’s financial market.
Lu International (Hong Kong), a subsidiary of Lufax Holding, part of Shenzhen-based Ping An, sells fund products for large fund houses such as BlackRock and Fidelity on its online platform. The company launched operations in Hong Kong on Monday and will charge zero commission until the end of September.
“We will operate completely online, and will adopt a lot of technology to cut our operating costs. This is why we can offer low-cost but high-quality services to customers,” Cai Hua, Lu’s chief executive, said.
The company’s charges, when they kick in, will be lower than those charged by other banks and financial firms, Hua said without giving any further details. Banks, which currently sell about 75 per cent of all mutual funds in Hong Kong, charge between 1 and 3 per cent of the cost of a transaction.
Lu’s entry will widen a price war in Hong Kong’s financial market. Some stockbrokers such as Futu Securities and Bright Smart Securities already charge a zero commission rate, while traditional brokers charge a 0.25 per cent commission.
