ICICIdirect.com, the online brokerage division of ICICI Securities Ltd, has launched its online platform for mutual fund (MF) advisers. At present, ICICIdirect allows only its own customers to use the platform to directly invest in funds. The new platform will also enable agents to come on board and transact on behalf of their clients.
Advisers need to sign an agreement with ICICIdirect and subscribe to the platform’s services for a fee, which hasn’t been disclosed yet. Once the adviser is issued a unique username and password, he can begin transacting in about 3,000 schemes across all fund houses that ICICIdirect offers.
“This will enable advisors to switch money from the investor’s account to the fund’s account under one roof,” says Anup Bagchi, executive director, ICICI Securities.
Now, a client can call up his adviser to invest in a fund. The adviser would then transact on his behalf. In other words, investors will not be required to fill up forms every time they want to invest in MFs. Also, since the adviser will electronically transfer funds from the client’s bank account, investors will not be required to write out any cheques. Investors will also get limited access to the platform to check the status of their portfolio.
Since ICICIdirect.com is already a primary agent of various MFs, it has an existing commission structure—put in place on 1 August after entry loads were banned—that it imposes on its existing clients. Advisers who come on board this platform will be mandated to charge the same commission to their clients. They will not be able to charge any fee over and above ICICIdirect’s charges.
At present, it charges the lesser of Rs30 or 1.5% for each instalment made through a systematic investment plan and Rs100 for lump sum investments, if the total value of existing investments is less than Rs8 lakh. In addition, investors would need to pay Rs500 to open an investment account and around Rs100 every year, subsequently.
If your adviser chooses to come on board and aims to route your investments through this platform, you will need to open a savings account with ICICI Bank Ltd. You will also need to open an investment account with ICICIdirect.
While Bagchi feels this increases safety as money can then be seamlessly transferred from the client’s bank account to the fund’s account without the client having to log on to the platform, advisers may find it difficult to convince their clients to open a new bank account, if they don’t have it already.