Central Provident Fund Investment Scheme ongoing charge capped at 1%

About 30,000 Singaporeans stand to benefit from a new rule that will make it cheaper to invest under the Central Provident Fund Investment Scheme (CPFIS).

The CPF Board is placing a limit of 1 per cent a year on the wrap fee charged on unit trusts included in the CPFIS, starting from July next year.

A wrap fee is a regular charge paid to financial advisers for providing bundled investment services, such as advisory, brokerage and administrative services.

Also known as an ongoing fee, the wrap fee is typically levied monthly or quarterly by liquidating a small portion of the investment, which eats into returns.