Wrap fee for CPF Investment Scheme
From 1st July 2012, the CPF Board will subject wrap fee charged for CPF Investment Scheme to a maximum of 1% per annum.
A wrap fee is an ongoing fee charged by financial advisors for providing bundled services such as advisory, brokerage and administrative fees. It is typically levied monthly or quarterly by liquidating a small portion of the investment. Currently, CPF members who maintain wrap accounts for their CPF Investment accounts are charged up to 1.5% annually by their advisors.
Since 2006, CPF board has been progressively implementing new measures to lower the cost of investment and enhance the quality of funds under CPF Investment Scheme. This new measure should bring cheers to retail investors as high costs may potentially erode investment returns over the long term.
Such development is in the right direction and will go a long way to encourage more Singaporean to invest responsibly using their CPF funds.
Under the CPF Investment Scheme, you may invest in CPF-approved unit trusts, bonds, endowment policies and gold products, after setting aside $20,000 in your Ordinary Account. If you wished to invest using your CPF Special Account, you need to set aside $40,000.
But before you start to invest your CPF monies, it is important to examine your risk tolerance and your financial situation.
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