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    [MPF Tutorial] The MPF consolidation dilemma and how Planto tackles them

    [MPF Tutorial] The MPF consolidation dilemma and how Planto tackles them

    All Posts » Career
    Last updated: Jan 9, 2019•  5 min read

    語言: 廣東話

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    • About Planto

    Managing and monitoring your MPF is not an easy task. MPF management is becoming a growing concern for many, as according to the MPFA, the average number of personal accounts that are being managed by each HKer is increasing due to frequent job changes. As such, more and more people are opting to consolidate their accounts.

    Some people choose to consolidate out of convenience, whilst others opt out to keep their portfolios diversified so to reduce risks. Let’s look at the pros and cons of consolidation and how Planto helps those who want the best of both worlds.

    Why Consolidate?

    Convenience is the major reason people choose to consolidate their MPFs. Not only do you save time from logging into multiple accounts, it is also much easier to track your balances and fund performances, as well as make any changes on your portfolios. Investment analysis and decision-making can also be done more easily and you are able to get an overview of your gains and losses.

    Why to NOT Consolidate?

    There are drawbacks to consolidating your accounts with one single MPF service provider. With consolidation, you are putting all your eggs in one basket, which limits the number of funds you can choose to invest in. Providers manage funds very differently, which results in varying fund compositions and portfolio performances.

    For instance, the 1 year annualised return and management fee for the North American Equity Fund is different under AIA and HSBC according to the MPFA. The former has a 2.03% return with a 1.83% management fee whilst the latter has 2.5% and 1.35% respectively. As such, having multiple MPF providers may be a better choice for those who are more risk averse. It is also important for you to study the performances of your desired funds under different trustees and make use of the Employee Choice Arrangement to allocate your MPF contributions.

    If you don’t want to go through the hassle of understanding and managing your multiple accounts, you can also opt for the Default Investment Strategy (DIS), which has been implemented for those who are too busy to manage their MPF accounts. This ready-made investment solution combines 2 mixed assets funds that automatically reduces investment risk according to members’ age.

    The solution

    No one can ever say how many MPF accounts is enough, too much or too little. This is entirely up to you. Yet, it is commonly believed that consolidating your MPF accounts into 2 to 3 service providers can balance out sufficient risks. Sadly, we all know consolidation is a hassle because it means the offline process of phone calls, form-filling through MPFA and re-allocation of your portfolios. Although the new eMPF platform is launching with the objective of making things easier, members need to wait until 2022 for this process to become online.

    This is why the Planto team has introduced the MPF consolidation function on the app. It is the best of both worlds. Not only can you see all your Hong Kong MPF accounts in one place, you can also get instant updates on your balances, portfolio breakdowns and performances whilst still keeping your portfolio diversified. Let us know what you think!

    About Planto

    Planto is a Hong Kong fin-tech start-up that brings the new generation a revolutionary intelligent personal finance application. We are generously supported by iDendron, from The University of Hong Kong and Cyberport to help Hong Kong users to manage their finances and save money, starting their journeys towards life goals like purchasing a flat, getting married, travelling and studying.

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