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Money Moves

Proactive approach to retirement planning

by Alex Chan

John Ford, managing director, Fidelity Investments Management (HK) Ltd
Photo: Edde Ngan

The implementation of the mandatory provident fund (MPF) five years ago caused a fundamental shift in thinking about retirement planning. Both employers and employees had to address the issue and make decisions relating to long-term financial security, which could no longer be avoided.

"The most recent statistics released by the MPF at the end of last year show that average balances have reached HK$77,000 across the scheme," says John Ford, managing director of Fidelity Investments Management (HK) Ltd. With balances growing steadily, employees are paying more attention to their retirement funds and are taking a closer interest in making the right investment choices.

One result is that HR departments in many companies have found themselves fielding numerous queries about financial issues. "Employees are wondering what to do with their money, how to invest it, and where to get the best returns for their investment choices," says Mr Ford. Clearly, the typical HR department is not always equipped to answer such questions or to give sound advice on the various issues raised.

Realising this, Fidelity has introduced a comprehensive retirement scheme which can satisfy the employee's need for choice, performance and guidance, while also meeting all the employer's needs. The scheme offers the company's own investment funds, as well as selected funds from third-party financial institutions. "We have won awards for the best fund management performance over three, five and ten years," says Mr Ford.

In order to provide education and guidance, the company has a team of personal investment specialists who offer clients one-on-one consultation services. This makes it possible to take into account individual circumstances and specific retirement investment preferences.

"You can give guidance to a 60-year-old about asset allocation, but the same thing might be completely wrong for a 30-year-old," says Mr Ford. Therefore, Fidelity divides members of its retirement scheme into groups to offer them the most appropriate financial information and investor education. Employers can then be sure that scheme members will receive the precise kind of guidance or assistance they are looking for about anything related to retirement planning.

Although the MPF is generally seen as a very positive development, Mr Ford points out that, for many, the mandatory level of contributions will not allow them to maintain the same standard of living after retirement. "People need to make good investment choices and to put aside more than the mandatory contribution if they want to have a comfortable retirement," he says. "Our scheme offers guidance, investor education and investment options all in one convenient platform."


Taken from Career Times 07 April 2006, p. A2

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