From 1 Nov, it will be possible for clients to move accrued benefits within their MPFs to a trustee and scheme of their choice once each calendar year, or alternatively elect to leave the assets where they are.
Investors will also be able to select which funds their pension portfolio is invested in, something which has attracted the interest of advisers.
However, providers are only able to pay advisers very low commission rates (between 0.5% and 1%) on MPFs, so advisers are beginning to draw up remuneration structures for their clients based on a fee approach.
Harpreet Sajjan, head of portfolio management at Platinum Financial Services, says clients have generally been receptive to the idea of paying fees.
“Clients fully understand that the advice is not free and we operate as a independent advisers to their MPF plans. I think on the investment side Hong Kong consumers are more used to paying for services directly, as most private banks do already directly charge,” said Sajjan.
However both Sajjan and Mark Rawson, chief executive of The Henley Group, which has offices in Hong Kong, Singapore and Shanghai, doubt that this heralds the beginning of a fee-paying environment in Hong Kong.
“We see the future as client choice, and offering the option of fees is definitely part of our strategic future, by the same degree we hope regulators do not push the providers down the MPF/stakeholder route for all products as, in general, we find these vehicles far too restrictive in their options and fund choices as a result of the squeeze on margins,” said Rawson.
“In simple terms, we see a future of value delivery to clients both by advisers and providers.”
