As the personal pension system is being fully promoted, ABC has fired the "first shot" in reducing fees for public offering Y shares

In the half month since the comprehensive rollout of the personal pension system, the "account opening battle" among banks is escalating into a "fee reduction battle."

On December 27, Agricultural Bank of China (601288.SH) announced on its official website that in order to support the construction of a multi-level, multi-pillar pension insurance system and optimize the investment experience for customers, it plans to offer discounts on the subscription and regular investment transaction fees for the Y-class shares of public mutual funds it sells.

The specific discount is 90%, effective immediately, with the end date to be announced separately.

It is reported that the public mutual funds Y-class shares participating in this round of fee reduction are part of the public mutual funds included in the personal pension fund directory by the China Securities Regulatory Commission and sold by Agricultural Bank of China.

According to the announcement, multiple ETF connection fund products, including "Invesco Great Wall CSI A500 ETF Connection Y," are now available for "90% subscription."

The state-owned banks are taking the lead in attracting customers through fee reductions, which may indicate that this two-year-long personal pension "competition" is shifting from "opening accounts" to "contributing purchases."

Since the pilot program began at the end of 2022, personal pension business has been a "must-fight" area for institutions.

For banks, the stable income brought by personal pensions can contribute a continuous increment, and viewing personal pensions as "hook products" can better establish trust with customers and connect more wealth management services.

At this critical year-end tax-preferential declaration period, the shortlisted banks are all on high alert, competing fiercely for every inch.

For example, this year, Industrial and Commercial Bank of China offers a maximum benefit of 656 yuan for "opening an account + 12,000 yuan deposit"; Industrial Bank announced that new account holders depositing any amount can receive a maximum red envelope of 188.88 yuan; JD Finance is actively attracting customers through promotions like "opening an account to receive gold."

After the comprehensive rollout, the competition in the personal pension arena has intensified, with account opening benefits now including deposit gift packages, WeChat discounts, JD E-cards, and other forms.

At this moment, Agricultural Bank of China has finally fired the first shot of "contributing purchases" this year.

In the previous wave of personal pension account openings, the phenomenon of "cold contributions" was widespread, with the average account balance in Beijing, Shanghai, and Shenzhen being less than 2,500 yuan by the end of the third quarter.

To address this dilemma, banks generally offer "tiered" benefits to customers for contributions of 1,000 yuan and above; fee reductions can help enhance investors' long-term returns and alleviate the "cold contribution" issue.

In fact, Agricultural Bank of China is not the first bank in recent years to offer specific discounts on personal pension products.

Previously, China Construction Bank also implemented a 90% fee rate activity for Y-class shares of pension public mutual funds (FOF) in mid-2023.

However, the fee reduction for Agricultural Bank of China's Y-class shares occurs after the comprehensive implementation of personal pensions and the expansion of public mutual products, which may have strong appeal and effectiveness in the industry "Because personal pensions can now invest in index funds, it means that the functionality has been further enriched, which is very suitable for investors who have a long-term demand for broad index investments," said a person from a public fund channel in Beijing. "The current adjustment is very strategic, as the timing is aimed at the end of 2024, creating a motivation to compete for the potential contribution scale in 2025."

"A lower subscription fee may also drive enthusiasm for opening and contributing to personal pension accounts," the person admitted. "It is not ruled out that several major personal pension institutions will also follow suit with fee discount activities."

As the competition for personal pensions heats up in the future, the market is continuously watching whether more state-owned banks will join the "fee reduction battle."