The decision ratchets up tough price competition in this field of wealth management and financial services in Hong Kong.

A wealth management arm of Ping An Insurance, which has launched operations in Hong Kong, will charge no commission until the end of September, raising prospects of a price battle, the South China Morning Post reported. The report was later confirmed to WealthBriefingAsia by a spokesperson.

Lu International (Hong Kong), which is a subsidiary of Lufax Holding, which in turn is part of Shenzhen-based Ping An, sells fund products for large fund houses such as BlackRock and Fidelity on its online platform.

“We will operate completely online, and will adopt a lot of technology to cut our operating costs. This is why we can offer low-cost but high-quality services to customers,” Cai Hua, Lu’s chief executive, said. 

The company’s charges, when they take effect, will be lower than those charged by other banks and financial firms. Banks, which sell about 75 per cent of all mutual funds in Hong Kong, charge between 1 and 3 per cent of the cost of a transaction.

The SCMP report noted that stockbrokers such as Futu Securities and Bright Smart Securities already charge zero commissions. Futu refers to “free trading on the go” on its website. Bright Smart Securities says on its website: “The company has drastically lowered our brokerage commission from 0.25 per cent to 0.05 per cent, which spurred a rapid growth in the customer base.”