September 29, 2011 12:40 pm
We can buy MF(Mutual Fund) from an agent or directly from AMC or Demat account. What are the pros and cons of buying from various sources?
Regards, Sunil Kumar
From Demat Account:
+ The company where you hold Demat acc may provide you advice for building your portfolio
+ SIngle view access for stocks and MF. COnsolidated portfolio report can be generated
– You may incur charges for buying both lumpsum and SIP. If not this is the best option.
+ Entry loads having been abolished now buying thru agent is no different. You may get advice from the agent on which funds to choose. A consoidated MF report may be just a call/SMS away.
– However in practice there is rampant misselling. Agents just advice any fund to anyone without taking risk taking capacity into account. Eg: Reliance Banking is a thematic fund that can generate good returns in the long run. But is someone needs to park funds for less than 6 months then a short term debt fund is the way to go. The upfront and trail commissions are higher for euity funds so you generally wont see an agent selling like debt/treasury oriented funds!
– Sepearate id password for each AMC though you can get consoildated reports in CAMS and Karvy websites (this will cover 90% f the funds)
– You need to do the paperwork upfront
+ Advantageous if your demat account provider is charging you for buying MF (which is why I do a direct with the AMCs. My folio had only 5 funds across 2 AMCs)
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