Sunday, December 16, 2007

 

EPF caps unit trust investment charges

The Star online SUNDAY December 16, 2007

By M. KRISHNAMOORTHY

KUALA LUMPUR: The investing public and unit trust agents will benefit from reduced service charges for unit trust investments funded by Employees Provident Fund (EPF) contributions.

The EPF recently announced that service charge (including commissions) by unit trust companies for investments by EPF members would be capped at 3% from 6% starting Jan 1.

Deputy Domestic Trade and Consumer Affairs Minister Datuk S. Veerasingam said that if the charges were reduced, people would invest more and this would mean an increase in sales for unit trust agents.

”By taking 6%, the investment will set back the EPF contributor by a large amount.

“For example, if the investment was RM100,000, RM6,000 would be taken by the unit trust companies, reducing the investments to RM94,000.

“But at 3%, the invested amount will be RM97,000,” he said.

Federation of Malaysian Unit Trust Managers (FMUTM) president, Tunku Datuk Yaacob Tunku Abdullah said the ruling would hurt profits.

He felt that the 3% rate would cut their income by half.

Overall, unit trust companies have performed well this year, with RM155bil in funds as at the end of September, an increase of 28% from last year’s RM121bil.

Fomca secretary-general Muhammad Shaani Abdullah said that it was a good move by EPF, adding that in line with this, Bank Negara should also reduce the service charges for individuals using their own funds to buy unit trusts.

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