- Wealth PMS (50L+)
With the introduction of no entry loads on mutual funds, the distributors have started to charge customers something; what happens to the online sites?
I’d mentioned that distributors would get a lot more difficult to handle, and that you should look for ways to invest by yourself in the no-load regime. Yet, it may be useful to consider what existing distributors are charging.
Some seem to charge an annual fee, some others charge a transaction fee, and some a bit of both. This pays for their intermediation costs.
Most common are the internet web sites that give you access to online investments. I have two MF online accounts – Reliance Money and HDFC Bank’s netbanking. And I know of ICICI Direct. What has changed?
Now what are the costs of doing it yourself? Not all mutual funds have online investing ability, and even for those there’s a pretty big waiting time to register, plus the forms to fill and submit etc.
You could go to the CAMS office and drop a filled form/cheque etc. every time. I did a quick calculation of how much petrol it will cost to go to my nearest CAMS center (Sector 14, Gurgaon) which is about 8 km away. For about five transactions a quarter (including debt funds) the petrol cost, to and fro, is about 6 liters of petrol or 300 rupees.
The HDFC deal is good enough for me. Until of course, I get my online registration with all mutual fund companies that I invest with. Of course I only do debt funds now and some tax saver funds, and for equity I will invest direct myself. Your mileage may vary.
Do tell me about the cost other distributors or online sites, if you know any.