Mutual fund investment: Confused about which platform to choose? Here is your guide

Mutual fund investment: With numerous online and offline mutual fund platforms emerging, it is difficult for investors to decide which mode will be the right choice. According to CA Manish Mishra, Virtual CFO and Growth Advisor, understanding these methods is important for investors as it will help them pick the most sensible method.

This article focuses on various methods of investing and which is best for the individual investor.

Let's have a look at online methods:

1. Online platforms: There are various mobile applications and online platforms that investors can use. These are easy to use and allow investors to examine and analyse various mutual fund schemes before deciding where they should park their money. These stages regularly offer additional tools for assessment and portfolios to the board.

Investors should always first check the credentials of the platform before investing.

2. Direct investment through resource houses: Investors can visit the official websites of asset management companies (AMC) and invest directly in their mutual fund schemes. This requires investors to create an account on the respective AMC's online platform.

3. Mutual Fund Utilities (MFUs): MFUs are shared platforms by multiple AMCs where investors can invest in various mutual fund schemes. Investors need to register with MFU and can transact across multiple funds.

Now, let's take a look at the offline methods.

1. Banks and financial institutes: Investors who don't want to opt for online methods can invest in mutual funds by visiting a bank or financial institution that provides this facility. They need to fill out a form and complete KYC to open their accounts.

2. Enrolled subject matter experts and vendors: Authorised agents and distributors can also help open a mutual fund account. These experts or vendors also help investors understand the process of mutual funds and guide them.

3. Visiting Registrar and Transfer (R&T) Offices: Some investors prefer physically visiting R&T offices to complete mutual fund transactions. This method may involve more paperwork and time compared to online alternatives.

How should investors make an ideal choice from these various methods?

According to CA Mishra, investors should consider their goals, risk tolerance, and level of affiliation.

"Those who are good with online tools and are searching for cost-adequacy could choose online platforms or direct investments. Investors banking on personalised advice could lean towards banks, financial institutions, or enrolled subject matter experts. It's crucial to assess charges, chronicles, and organisations introduced by each methodology before making a decision," the expert added.

CA Mishra further said that with everything taken into account, the ideal procedure depends upon individual tendencies and essentials. Whether online or offline, the key is to make a good choice that matches one's financial objectives and risk appetite.

Chethan Shenoy, Director & Head, Product & Research, Anand Rathi Wealth Limited, prefers online methods for investment as they provide convenience, flexibility to invest at any time, cost efficiency, and easy access to information.

Shenoy recommends online platforms for retail investors, especially beginners, as they are easy to start, track, and eliminate the potential difficulty of finding an advisor at an early stage.

For high-net-worth individuals (HNI), Shenoy recommends choosing either online or offline mode, depending on whether they have a dedicated advisor or distributor.

"If they have a distributor, they can rely on them for assistance in investing, tracking, analysing, reporting, and personalising all of the above," Shenoy said.

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