Opinion | Big players unlikely to heed welcome move by smallest MPF provider
Market leaders unlikely to follow Haitong's move to reduce management fees on their products
Haitong International Securities having to resort to waiving its investment management fees on Mandatory Provident Fund offerings for three years shows the difficulty small players face in capturing a piece of the HK$514 billion market.
With an average fee of 1.71 per cent, the MPF generates fee revenues for fund houses of HK$8.79 billion a year.
Ben Zhang Yibin, the managing director of the mainland firm's Hong Kong asset management arm, admitted its share of the market was so small it decided only such an aggressive promotion could make a difference.
Figures from data provider Gadbury showed Haitong was the smallest MPF player, with a market share of 0.071 per cent at the end of last year and about HK$364 million of MPF assets under management.
HSBC and Manulife combined controlled almost half the market. HSBC, together with subsidiary Hang Seng Bank, had a market share of 30.8 per cent, while insurer Manulife had 18 per cent, the Gadbury report said. Next was AIA, the city's largest insurer, with 9.8 per cent, followed by BOCI-Prudential with 7.9 per cent and Bank Consortium Trust with 6.1 per cent.
This means the top five MPF providers had a combined share of 72.6 per cent, and the other 14 shared the remainder.
The next top 10 houses had less than 5 per cent of the market each - Fidelity (4.6 per cent), Sun Life Financial (3.9 per cent), Principal (3.4 per cent), Bank of East Asia (3.3 per cent) and AXA (3 per cent), the report said.
