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SINGAPORE: The wrap fee charged for investments under the CPF Investment Scheme (CPFIS) will be capped at one percent per annum.
The CPF Board said in a statement that the change will take effect from 1 July 2012.
A wrap fee - also known as an ongoing fee - is a regular charge paid to financial advisers for providing bundled investment services such as advisory, brokerage or administrative services.
Currently, CPF members who maintain wrap accounts for their CPFIS unit trust investments are charged a fee of up to 1.5 percent per annum by their financial advisers.
This fee eats into investment returns as it is levied monthly or quarterly by liquidating a small portion of the CPF member's investment.
The CPF Board said the cap on wrap fees is intended to help members lower the costs of investing their CPF savings over the longer term.
Past measures by the board included the tightening of admission criteria for new funds and the setting of fee caps on sale charges and fund expense ratios.
- CNA/al
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