Mutual fund investment Via direct plan profitable

Dear Pankaj,

I am investing with distributor. He s currently not charging anything for me. But the latest circular of sebi states that there will be two plans direct plan with the AMc and fund buying via distributor from the jan 2013

  1. I want to know in figures how much will i lose in the long run for ten years or five years(if i invest thru distributor? can we guess now how much will i lose?
  2. If i go via AMC for investment will they be responding properly for my queries? and Will there be a provision for me to do the online redemption request?

2.In case Say I am investing with Four AMC HDFC, IDFC , Quantum and Franklin.Will i be able to see all in one place anywhere (other than my distributor portal,i heard that amfi is coming with their own portal). Creating a portolio in Value research and money control and monitoring will be ok?

What will be your take on this?

Regards Vignesh

asked Sep 17 '12 at 09:48 by vignesh 94671323

There are three points here:

  1. Service fees by broker/distributor: As of now distributor may charge an extra amount for providing his services. As per your question, your distributor is not charging this.
  2. Mutual fund transaction Charges: These are applicable since last one year as under: First Time Investor across Mutual Funds - Rs. 150, Existing Investor (other than first time investors) - Rs. 100
    Notes : a) This charge is applicable for any purchase / subscription of Rs. 10,000 or more
    b) Transaction Charges are applicable only if your distributor (if any), has opted to receive such charges
    c) Transaction Charges are not applicable if you are a Direct investor
    You should check your mutual fund statement to see if this has been deducted or not.
  3. Direct plans from AMC from Jan 2013: These direct plans would have lower expense ration so expect 1% less expense on this funds.

Overall in case you choose to invest into direct plans rather than through distributor you can expect your returns slightly higher. Say in a year gains on mutual fund returns through distributor are Rs 1000, it may be Rs 10 more for direct plan.

Direct investing with AMC certainly have more advantages.

  1. It saves you from all sort of extra charges (as mentioned in above three points).
  2. They respond very well and quickly for queries/complaints. Each of them have a email address and phone number on which queries can be asked. They provide resolution in 1-2 days.
  3. There are provisions for doing online redemption, SIP and STP etc on almost all of the AMC websites.
  4. Its fast and you can do it anytime. investment through distributor may take 1-3 days to process. Online is done on same day if transaction done before 3 pm.
  5. Direct transfer to/from bank account.
  6. Saves paperwork and other form filling hassles.

Only issue with direct investment is you will have to maintain separate accounts for each AMC. there is no single website to transact. If you have to transact in HDFC, you will have to go to HDFC mutual fund website only.

You can track portfolio/fund performance on AMC mutual fund login itself. As such there is no need to create account in moneycontrol or valueresearch. But yes, all mutual funds would be at different places.

Issue with portfolio in these websites is you will have to go to these website and add investment every time its one. That's painful.

You may try Perfios which will automatically fetches all folios from different AMCs and show you without your intervention.

answered Sep 17 '12 at 10:24 by Pankaj Batra 5.2k320

Thank you so much for a very detailed Explanation
(Sep 17 '12 at 14:34) vignesh

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Asked: Sep 17 '12 at 09:48

Seen: 2,327 times

Last updated: Sep 17 '12 at 14:34