Some MPF providers deliver strong fund performance. Others focus more on enhancing services. Winner of BENCHMARK 2016 MPF Brand of the Year, AIA MPF, succeeds in doing both, earning it an Outstanding Achiever award in the MPF Client Support – Member Servicing category and the Top MPF United States Equity category, among a number of awards it has been recognized for in 2016.
Investors continue to maintain a home bias, allocating a majority of their MPF assets to the domestic market. Indeed, MPFA data shows that Hong Kong accounted for 60% of the total assets of approved MPF funds at the end of September 2016. With this amount of money concentrated in a single market, investors have exposure to a higher degree of risk should the local market does not perform as expected.
Spreading Investment Exposure
AIA MPF has recognized this worrying trend and is working to educate investors on the benefits of having a globally diversified portfolio. Leo Cheung, Head of Business and Product Development at AIA MPF noted, “Investment diversification helps to lower risk and capture investment opportunities. We have no way of telling how a particular market will behave, so members should not put all their hard-earned money into a single asset class.”
US Equity Market Outperformance
According to Cheung, many Hong Kong investors believe that developed markets have still to recover the ground lost during the global financial crisis, with the US and Europe both seen as the cause of market volatility, rather than as attractive investment destinations. As a result, investors often feel more comfortable with the Hong Kong market when seeking to invest their MPF. However, data shows that overseas equity markets, in particular, the US, have posted strong performance in recent years.
US equity was the best performing MPF asset class in 2016, once again highlighting the importance of investment diversification into non-local markets. Indeed, the AIA MPF – PVC North American Equity Fund’s assets under management have grown to HK$1.74 billion with a 1-year return of 8.74% as of the end of 2016.
Smart Member Approach
To further illustrate the importance of investment diversification, the company analyzed the MPF portfolios of its members in mid-2016 and identified a group of ‘smart’ investors with annualized three-year unrealized returns that were within the top 10% for at least five times in the past ten years. These returns had also exceeded both the annualized three-year inflation rate as well as the annualized three-year MPFA’s Internal Rate of Return. Further research revealed that ‘smart’ investors were more inclined to invest in overseas markets, with US equity funds among the most popular.
“While we emphasize that different investors have different investment appetites, performance data shows that a global view might be more appropriate. So it is always good for investors to consider broadening their investment horizons,” noted Cheung.
A Leader in Member Services
Turning to member servicing, where AIA MPF strives to put members first in every aspect of its business, in keeping with its brand promise of ‘The Real Life Company.’ The company’s dedication to member servicing, with highly specialized teams, a wide range of personalized services and the largest agency force in Hong Kong is well recognized by its members over the years.
Among AIA MPF’s key strengths are its 200-strong client servicing team, which offers tailor-made services to members, to ensure that member enrolment is as smooth as possible. The company also provides self-help tools to help members make informed investment decisions. For example, it provides a customer-centric website, a full-featured client portal and retirement calculator, amongst other instruments, while also utilizing technology to improve member experience in the form of technology that makes MPF management easier.
Elaine Lau, Chief Operations Officer at AIA MPF, says the key focus for AIA MPF over the past 12 months has been on service upgrades for persons with disabilities.
“Everyone, regardless of their abilities and physical condition, deserves the same opportunities to build their desired retirement. Persons with disabilities represent a valuable segment of our community and deserve to have top-class member services to help them to manage their MPF,” said Lau.
Barrier-Free Support Services
To help its members with disabilities, AIA MPF has introduced several barrier-free services; these include a dedicated customer service team to serve members with special needs. The company was also the first MPF provider to offer online sign language customer services to answer MPF-related inquiries via video conference.
AIA MPF has also upgraded its corporate website to a ‘barrier-free standard’ to help members with visual impairments access MPF information and is providing assistive tools, such as text-to-speech screen readers, speakers, as well as magnifying glasses at its service centers.
“Having adequate retirement reserves is an important part of achieving a desired retirement. It has long been a mission of AIA MPF to provide retirement planning tips and educate all of our members,” concluded Lau. BM