Information on anything and everything is available at our fingertips. In this era of information technology, we investors have access and gain knowledge about various mutual fund schemes, their returns, etc. and all this information can be accessed for free.
It is also no different for those who provide financial services. There will be a plethora of emails, messages, and websites stumbling across to provide information.
Many mutual fund distributors will contact you to request mutual fund investments in your new and existing mutual fund. Especially now, as the economy is coming back from its slump and markets are turning favorable for investments.
While most of the information sent to us is already on the World Wide Web. We can easily check information about the fund from AMCs (Asset Management Company) website. However, for some investors, it may be a valuable service.
These mails and letters keep informing us about new releases, returns of various schemes, NAV (Net Asset Value), and many other advantages and disadvantages related to it. But is that all we need to know about investing?
Don’t you think it would be reasonable to choose the best mutual fund distributor who can help manage your investments? What if all this information increases your confusion?
With many mutual fund schemes changing names and portfolios reorganizing, most investors are confused about what to do with their mutual fund holdings.
It may make sense to work with a mutual fund distributor who can advise and guide you on your investment decisions.
Returns alone are not a sufficient basis for choosing the right mutual fund distributor. There are many other things you need to look out for.
1. Qualification of the mutual fund distributor
The Association of Mutual Funds of India (AMFI) makes it mandatory for individuals working in the mutual fund advisory service to have a certification issued by the National Institute of Securities Management (NISM).
But simply relying on certification is not enough because you will need to research more into the philosophy (attitude and rationalization) and research process that the mutual fund distributor and his team adopt while advising clients. Furthermore, you need to ensure that the distributor is not an individual selling investments as a side business. Remember that acting on advice given by a mutual fund distributor who does not have the required knowledge could spell disaster for your money and investment.
2. Experienced mutual fund distributor
Check out the expertise of the mutual fund distributor and his team. Check how well they are qualified in terms of education and the type of knowledge and experience they possess.
Also check if the distributor has good knowledge of the full range of asset classes. Such as Equity, Debt, Fixed Income, Gold, etc.
They should be able to understand and decode how these asset classes are affected by various domestic and international events, decisions or changes in trends related to interest rates, oil prices, etc.
Understanding mutual funds, determining their suitability for you and your portfolio, balancing asset allocation, and knowing how changes in assets will affect you requires a high degree of expertise.
Therefore, you should check how skilled the distributor is and what kind of experience he has. The mutual fund should be able to identify products that will meet your life’s needs when you need them.
It should be easy to contact the mutual fund distributor of your choice. Either by e-mail, by telephone, or by meeting in person within a reasonable time. It is important that the distributor, to whom you entrust your money, is available when you need it. The distributor or team should be able to clear your suspicions within a reasonable amount of time.
Is this distributor able to execute transactions for you in a timely manner? Timing is of crucial importance in the world of investing in the best mutual funds and stocks. The distributor should be able to carry out your transactions within a short period of time. as soon as possible.
All of these things matter when it comes to your hard-earned money.
4. Providing complete financial solutions
We Indians do not like to discuss our finances or finances with everyone. Because we have learned not to disclose our finances and investments with many people. We have learned to keep such things and details secret and under wraps.
So it would be better to find a distributor that will be a one-stop solution for all our financial needs. An advisor who can better understand and handle our investments confidentially. unbiased person The person who will be able to offer us mutual fund products from all the fund houses. Not just a house or two financing houses.
5. Does the distributor ask questions?
This is the only characteristic that will tell you whether a mutual fund distributor is only interested in selling or is genuinely interested in understanding your requirements and needs. Then drive the investment forward, accordingly.
Does he ask you questions to get to know your financial needs, situations, and goals better? Or are you being given details about products just to convince you to buy a product and not the solution you are actually looking for?
Without asking you questions, how can anyone know for sure which particular plan is the best fit for you? Can you risk investing in small caps or should you limit your investments to debt mutual funds? Do you have life or health insurance or not? These are two essential items that we must have before we start with mutual fund investments. To secure our loved ones.
Not only do they help the investors, but all this information is also collected from them and other investors across the country and provided to the fund houses. With this data collected, the fund houses, as well as the government, are able to better understand investors’ moods and tendencies. It also helps them introduce new policies and policy changes. Create new strategies. Develop and come up with new and attractive plans.
6. Infrastructure and value-added services
Apart from evaluating his qualifications and attitude towards customers, you also need to judge whether he has the right infrastructure. Will you be able to constantly receive wise advice? Remember, entering an investment is just the beginning. You want to monitor and track your investments regularly. A change should be advised immediately if the investment becomes redundant or non-performing.
Therefore, it is better if you are provided with various tools and calculators to track your investments online, as an added value.
Besides, the mutual fund distributor should send out regular updates about your portfolio. What are all the changes that can be made according to changes in market conditions and financial goals? What are all the new developments that have been made in the field of mutual funds? What new plans have emerged? What are the new policies that have been put in place that will benefit you or vice versa?
7. What kind of after-sales support is provided?
As mentioned earlier, going into an investment is just a starting point. Only with the help of wise and reliable after sales support will we be able to monitor, track and enhance our investment portfolio. Not all tracking tools may be easy to understand by every investor.
The reason for investing with a mutual fund distributor and not investing in a direct investment fund is that we are not familiar with the market and are not comfortable with it. All reports that are periodically sent by finance houses to investors are full of jargon that we don’t always understand. To interpret it, we need the help of professionals. This assistance must be provided by the mutual fund distributor.
when needed. Not as and when it is convenient for them.
8. Record the previous track
Well, if you were offered this, you would be able to gauge the quality of the advice. You need to check the data he has provided with some of his clients as a reference check. The best way is to ask for referrals.
Use social media, to see if anyone has recommended the consultant or their company. Check online for any referrals, ask your friends or relatives, if they know of any references. What kind of knowledge and experience is involved? This way you can get an idea of his strengths and weaknesses.
Check how long the consultant has been on the job and how they work. Research the industry the mutual fund distributor was in and what knowledge he/she and the team have. Someone who has been through multiple market cycles would be experienced and, therefore, preferred.
This exercise will not only help you understand their past performance history but also help you get to know whether or not their after-sales service is fast and reliable.
There is no official rating or rating system for mutual fund distributors in India, at present. So we have to work it out by ourselves.
Mutual fund distributor in this business to earn. Whether it is an individual, a partnership or a company, he will not be able to survive for a long time if he is not compensated.
Maintaining a website, helping you put together a financial plan, collecting data on your behalf, keeping it free for you, and keeping all of these services alive takes effort and money.
Many financial planners and advisors can charge a fee for this. Write a comprehensive financial plan, taking into account risk appetite, future requirements, and life goals. You are required to pay them a fee regularly. It’s just that they don’t tell you that they get a commission, too, on all the investments they make on your behalf.
Whether or not the mutual fund distributor is honest with you is the primary criterion to check.
Today with so many options available to invest in, the task of doing wise investment planning has become quite challenging. Because we are surrounded by a lot of information about each of these options, such as Stocks, Mutual Funds, Bank FDs, NCDs, Corporate Bonds, Public Provident Funds (PPF), National Savings Certificate (NSC), etc.
And still, at the end of all the research and evaluation, we constantly wonder if we made the right investment decision.
In order for us to clear this mess of “information overload” what is needed is to have a mutual fund distributor who provides independent and unbiased financial advice. With no vested interests (from commissions). The one who will help, assist and guide you through wise investment planning.
This is what the best mutual fund distributor will do for you. This is the vision and goals of WealthBucket.