Mutual Funds: You can invest through Asset Management Company, Aggregator, Mutual Fund Distributor, Registered Investment Advisor.
Mutual Funds: Investing in Mutual Funds is quite easy due to online options.
You can invest online through Asset Management Company (AMC), Aggregator, Mutual Fund Distributor (MFD), Registered Investment Advisor (RIA) or Robo-advisory.
Many platforms provide you the facility of investing in mutual funds. In such a situation, it becomes difficult to decide which platform is better.
Mutual Fund Distributor (MFD):
Aggregators act as Mutual Fund Distributors (MFDs), where you can find many schemes from different fund houses.
To invest in online mutual funds through MFDs, you need to login to their website. For that you have to complete KYC formalities.
After providing the required information and uploading the required documents, your registration process is completed and you can invest in mutual funds of various companies.
Make sure there is no cross-selling
Salil Pandya, SEBI-registered investment advisor and founder of Lotus Wealth Management, explains that such aggregators do not charge customers any fees.
All the money you invest, your entire money goes to investment only, but you are getting only free service, so such a platform should not be chosen.
“If such portals are giving you free service, then it is possible that they may be selling you other products like insurance, in which they get good commission.
Such platforms make you invest in a regular plan, in which they are sure to get commission. The source of earning money of such platforms can be cross-selling. You should make sure that they do not cross-selling.”
Select by service
Choose the platform based on how the customer support service is. Because there will be good customer support only then you will have the possibility of getting better service.
Many investors stay associated with such platforms for years, even after paying the charges, which provide great service.
If the platform is providing you free service but its after-sales service is poor, then investing through such platform does not make sense.
How fancy is the interface of the online platform is not important, says Pandya, but whether it offers you the full range of services with minimal technical glitch is important.
You should make sure whether your platform is providing services like lump sum, SIP, STP, SWP switching, redemption or not.
The platform must have the schemes of all the fund houses:
Online platforms are linked to multiple fund houses, so they encourage you to invest in the schemes of partner fund houses, but you should choose a platform that has the schemes of all the fund houses.
