It is possible to invest directly with the fund house if you want to bypass mutual fund (MF) agents. As per a Securities and Exchange Board of India notification dated 4 January 2008, you could invest in an MF directly, bypassing an agent and, therefore, without having to pay entry load—an upfront charge that you had to pay to agents in those days. Entry loads were later abolished completely in August 2009 and thereafter agents were given the right to prescribe fees for the services rendered. On the other hand, investing directly entails that you approach an MF without any agent’s assistance.
Shortlist scheme and get the form
Right after shortlisting the scheme in which you would like to invest, visit your fund house’s website and download the form. You can also visit the MF’s registrar office and pick up the form (as part of the key information memorandum) lying on the shelf of its reception. Make sure that you properly fill the form and then submit it along with your know-your-client acknowledgement and a copy of the Permanent Account Number (PAN) card of all the joint applicants along with the cheque. Submit the above either at your fund house’s offices or at its registrar. The advantage of going to a registrar’s office is that you can submit application across many MFs that it handles.
What is the price
Investing directly is free of cost. However, since you decide to avoid the agent route, you have to deal with the fund house yourself. If you do not receive your account statements or dividends on time, no agent will help you. You’ve got to get in touch with the fund house directly and lodge complaints yourself. Your financial planner may have sent you regular updates on your holdings had you gone through him, but investing directly means you’ve got to maintain your own records.
Should you invest directly
If you think you are good at maintaining records and wish to save on the agent’s cost, then opt for direct investing, especially if you are confident about the choice of schemes you make. However, if you do not have time to fill forms, maintain records or even do regular transactions such as making additional investments from time to time, switches, redemptions and so on, we suggest you take an agent’s help.