There are many advantages if one invests in the Direct plans of mutual funds – the returns go up because of the low fund management costs. However, even DIY (do-it-yourself) investors have had to really push their way to manage their investments in Direct plans of mutual funds as even Direct plans entail physical submission of application forms. If one wants to do it online, you have to route it through websites of each AMC in whose funds you wish to invest in. This is not just tedious, but is also not a good move because it means one has to maintain as many user IDs and passwords as the number of AMCs one invests in.
The beauty of having all investments under one head is lost, making it impossible to analyse the performance of one’s overall investments. To some extent, one could get a snapshot view on all mutual fund investments through the myCAMS application. From January 1 this year, you can also transact online in Direct plans of MFs through MF Utility, which is a mechanism by which you can transact in Direct plans of up to 25 fund houses, which are linked to MF Utility. These 25 AMCs manage over 90 per cent of the total industry assets.
Seeking advice
Although you could directly evaluate the performance of your investments, the same was not possible if you were using the services of an advisor, as they did not have access to your investments. That too has witnessed change with the SEBI in recent times asking fund houses to share feeds of Direct plans with SEBI-registered investment advisors (RIAs). Now they can advise their clients to invest in direct plans and also monitor the clients’ portfolios. The shift towards digital intermediation with financial services could entirely shift money invested in mutual funds through the Direct mode, as those using the services of RIAs will opt for Direct mode of investing than the regular mode. According to V Ramesh, MD & CEO, MF Utilities India, “The Common Account Number (CAN) feature under MF Utility (MFU) is very useful. Once an investor’s CAN has been created, it will help advisors and distributors to invest in several fund schemes with a single signature.” There are many advantages of using the MFU, which investors and distributors will realise as they experience it. For now, Direct route to mutual fund investing has found a way to be attractive for end investors as well as distributors.
olmdesk@outlookindia.com