SINGAPORE – The second phase of reductions to the CPF Investment Scheme (CPFIS) sales charge and wrap fees cap will be deferred by one year, from Oct 1 this year to Oct 1, 2020.
This is in response to industry feedback that financial advisers require more time to adjust to the revised CPFIS fees structure, the Ministry of Manpower (MOM) said on Tuesday (March 12).
In March last year, MOM announced the removal of the sales charge and a reduction of the wrap fees cap for the CPFIS in two phases. The first phase took effect from Oct 1 last year.
Currently, financial advisers are allowed to levy a sales charge of up to 1.5 per cent for Investment-Linked Insurance Policies and unit trusts offered under CPFIS. This is down from the 3 per cent charged before Oct 1 last year.
The removal of the sales charge – to take place on Oct 1 next year – reduces the cost of investing for CPFIS members and better aligns investment behaviour to members who have the time and knowledge to invest.
Investors are already able to buy unit trusts directly on online platforms for zero sales charge.
Financial advisers currently charge a wrap fee of up to 0.7 per cent of assets under management (AUM) per annum for CPFIS members with wrap accounts. This is down from 1 per cent prior to Oct 1 last year.
The cap on annual wrap fees will be lowered to 0.4 per cent of AUM per annum, similar to the fees charged by online investment platforms in the cash market.
Members with enquiries may e-mail [email protected] or call the CPF Call Centre at 1800-227-1188.