We have access to information on everything and anything. Investors have the advantage of being able to gain information about mutual fund schemes and their returns in this age of information technology. All this information is available for free.
This is also true for financial service providers. You would see a lot of emails, messages and websites trying to collect information.
Mutual fund distributors will approach you to solicit mutual funds investments in new or existing mutual funds. Particularly now that the economy has recovered from the recession and the market is turning favorably for investments, it’s a good time to solicit mutual fund investments.
Most of the information we receive is available online. The AMCs (Asset Management Company) website has the fund information. It may still be valuable for some investors.
These messages and mailers keep us informed about new launches, returns, and NAV (Net Asset Value) of different schemes. There are many other benefits and disadvantages to these schemes. Is that all there is to investing?
Isn’t it sensible to find the best Mutual Fund Distributor that can manage your investments? Are you confused by all of this information?
Many investors are confused about how to manage their mutual fund portfolios due to the name changes and portfolio realignments of mutual fund schemes.
A mutual fund distributor can help you make the right investment decisions.
You cannot rely on returns alone to choose the right distributor for mutual funds. You should look at many other factors.
1. Qualification of the Mutual Fund Distributor
The Association of Mutual Funds in India requires that individuals who are engaged in mutual fund advisory must have a certificate issued by the National Institute of Securities Management.
However, relying only on certification doesn’t suffice. You should also look into the philosophy and research process that the mutual fund distributor employs while advising clients. You also need to ensure that the distributor isn’t a person who makes investments as a side-business. Don’t listen to a distributor of mutual funds who lacks the necessary knowledge. This could lead to financial disaster for you and your investments.
2. The experience of the Mutual Fund Distributor
You should verify the expertise of the mutual funds distributor and his staff. Find out how qualified they are, what education they have and what knowledge and experience they have.
You should also check to see if the distributor is knowledgeable about all asset classes. You can choose from equity, fixed income, fixed debt, or gold.
They should be able understand how various events and trends, such as changes in oil prices, interest rates, etc., would affect these asset classes.
It takes a lot of knowledge to understand mutual funds and their suitability for your investment portfolio. You also need to balance the asset allocation and know how changes in assets affect you.
You should also check the level of skill and experience of the distributor. You should trust your mutual fund to find products that meet your needs.
3. Accessibility
You must be able to reach the mutual fund distributor that you choose. You can reach the distributor by phone, email, or in person within a reasonable time. It is crucial that you can reach the distributor you have trusted with your money. Your questions should be answered by the distributor or his team within a reasonable time.
Are you able to have the transaction executed on time by this distributor? Investment in Best Mutual Funds and Stocks is all about timing. Your transactions should be completed quickly by the distributor. As fast as possible
These things are important when you have to spend your hard-earned cash.
4. Provide Complete Financial Solutions
Indians don’t like to discuss their finances with anyone. We have been taught to not share our investments and finances with too many people. These details and information should be kept confidential.
It would be better to find a distributor that can provide a single-stop solution for all of our financial needs. A trusted advisor who understands and manages our investments with confidence. A neutral advisor. A person who is able to provide mutual fund products from all the fund houses. Not just one or two.
5. Are Distributors asking questions?
This is the only way to tell if a mutual fund distributor is just interested in selling or is really interested in your needs and requirements. Then, proceed with the investment accordingly.
Are you being asked questions by the sales representative to better understand your financial situation, goals and needs? Are you being told details about products in order to persuade you to purchase a product, or to help you find the right solution?
How can anyone tell which plan is best for them without asking questions? Are you willing to take on the risk of investing in small-caps, or should you limit your investments to debt mutual funds? What number of Life and Health Insurances you have. These are the most important ones before you start investing in mutual funds. To protect our loved ones.
This information is not only helpful to investors but also collected from them and other investors across the country and sent to the fund houses. The fund houses and the government can better understand investor moods and inclinations by using this data. This data helps them to develop new policies and change policy. Develop new strategies. Create and implement new, attractive strategies.
6. Infrastructure and Value Added Services
You must assess his attitude and qualifications towards clients. Also, evaluate whether he has the right infrastructure. Are you able to get prudent advice on a daily basis? It is important to remember that investing is just the beginning. Your investments should be regularly monitored and tracked. If an investment is no longer performing, it must be notified immediately.
As value addition, it is important that you have access to various calculators and tools for tracking your investments online.
A mutual fund distributor should also send regular updates about your portfolio. What changes can be made in response to changes in market conditions or financial goals? What are the latest developments in mutual funds? What are the new developments in mutual funds? What are the new policies that you will be able to benefit from?
7. What type of support is offered after-sales?
As we have said, an investment is only a beginning point. We can only monitor, track, and expand our investment portfolio with the support of reliable and prudent after-sale service. Investors may not understand all the tracking tools.
We are unfamiliar with the market and prefer to invest with a distributor of mutual funds over direct mutual funds. The reports sent by fund houses to investors every other month are full of jargons that we don’t always understand. We need the assistance of professionals to interpret them. The distributor of mutual funds must provide this assistance.
It is available whenever you require it. They can have it as often as they like.
8. Past Track Record
This would allow you to assess the quality of the advice if it is offered. As a reference, you should cross-check the information provided by him/her and some of his clients. Asking for referrals is the best way to find them.
Social media can be used to find out if any advisors have recommended him or his firm. Ask your family and friends for references. Which level of experience and knowledge is the associated? You can then get a sense of his/her strengths or weaknesses.
Examine the advisor’s experience and how he operates. Find out what industry the mutual fund distributor worked in and what knowledge he/she has. Experienced people are more likely to be successful in the market.
This would help you to understand the past performance of your client and also identify if prompt and reliable after-sales support is offered.
For now, there is no rating system or ranking system in India for mutual fund distributors. We have to do it all ourselves.
9. Compensation
Mutual fund distributors are in the business of making money. It doesn’t matter if the distributor is an individual, partnership, or company. If it doesn’t get paid, it won’t last long.
It takes effort and money to maintain a website, help you make a financial plan and gather data for you.
A lot of financial advisors and planners may charge fees for similar services. A comprehensive financial plan is created, which takes into consideration risk appetite, future needs, and life goals. They will ask for a regular fee. They just don’t tell anyone that they also get a commission on any investments they make for you.
This is the most important criterion you should be looking for in a mutual fund distributor.
Bottom line
With so many investment options, it is difficult to plan prudently. We are constantly bombarded with information about all of these options: stocks, mutual funds and bank FDs. Corporate bonds, Public Provident Funds, National Savings Certificates (NSC), corporate bonds, etc.
We still wonder if we made the right investment decision after all this searching and evaluating.
