The scheme provides greater flexibility for members to invest, transact and monitor their unit trust investments

by SHAZNI ONG / pic by TMR FILE PIX

THE Employees’ Provident Fund’s (EPF) online subscription of unit trusts introduced in August last year recorded about 10,000 transactions as contributors sought the more cost-effective channel to invest their pension savings.

i-Invest was introduced by the pension fund to facilitate the purchases of approved unit trust directly, eliminating the need for middlemen and lowering the investment services cost.

The move, however, drew criticism from some unit trust consultants who had for years been cashing in on EPF contributors as a key income source for commission.

EPF deputy CEO (operations) Datuk Mohd Naim Daruwish said the i-Invest initiative has received overwhelming responses from the fund’s members.

“Since its August 2019 launch, we have recorded about 10,000 transactions from over 5,500 members, amounting to approximately RM81 million until December 2019.

“Out of the 14.6 million EPF members (as at the fourth quarter of 2019), close to one million members have participated in our Members’ Investment Scheme (MIS) which i-Invest is a part of,” he told The Malaysian Reserve in an email reply.

In September last year, the EPF online portal for direct subscription of unit trusts recorded transactions worth RM32 million in the first month of its introduction.

The latest figures showed the amount had jumped 153% based on the transaction value. The huge amount also meant unit trust consultants had lost a substantial amount in commission.

i-Invest is a self-service online platform embedded within the EPF i-Akaun (member) portal. It provides members with the option to control their investments and make unit trust subscriptions at a minimal cost.

Besides investment in EPF-approved fund management institutions, the channel contains tools to obtain and compare relevant information on investing, helping the fund’s over 14.5 million members to make well-informed decisions of their unit trust subscription.

The EPF is also the first retirement fund in the world to link members’ retirement funds to online investment services.

The pension fund charged a maximum 0.5% of sales charges for online investment transactions, significantly less than the sales charges which could go up to 3% through agents.

Mohd Naim said the EPF had not set any targets on transactions and members participating in the scheme as the i-Invest platform was designed as an alternative option to self-invest investment of their available funds.

“Promotions for i-Invest were focused on the financial literacy aspect of the platform through awareness campaigns via social media pages, collaborations with financial blogs and websites, as well as collaborations with the media.

“Under MIS, members have the option and flexibility to diversify their retirement portfolio and enhance their retirement savings,” he said.

Mohd Naim said to protect members, the investment transactions were only allowed for those who were eligible.

“It provides greater flexibility, functionality and convenience for members to invest, transact and monitor their unit trust investments anytime and anywhere.

“It also enables members to monitor their investment funds through their i-Akaun, and look up for information on cost of investment, historical performance, as well as required statutory information,” he said.

EPF members can transfer up to 30% of the amount in excess of basic savings from their EPF Account 1 to be invested in the qualified funds.

Members aged 55 years and above can use the i-Invest platform via Akaun 55 or Akaun Emas through the i-Akaun portal as a mode of withdrawal, subject to maintaining a minimum of RM1,000 in their account.

For the period of 2019/2020, a total of 389 funds from categories, including equity, mixed assets, bonds, money market and property trusts, are approved under the EPF’s Members Investment Scheme.

The i-Invest scheme like other online channels is chipping away commission-based financial services roles, like insurance agents and remisiers, as the market evolved towards more efficient trading channels.