Mutual Funds are the most common financial tool for investors to pool their money for short term or long term and getting returns. When we talk about investing in Mutual Funds, the first question comes to our mind is should we invest directly or through agent or broker? Well, the benefit of investing directly is that you’ll be charged less management fee by the mutual fund, so in short, your returns will slightly be better than the investment you make through an agent. People often confuse between Mutual Fund Agent and Mutual Fund Adviser.

Mutual Fund Agent vs Mutual Fund Adviser

Mutual Fund Agent

A mutual fund agent is a person who provides you all the serviced to investments in mutual funds, his job is to facilitate the mutual fund transaction, provide after sale/investment services like regular reports and also provide support when you withdraw. For providing these services, they cannot charge any fees as they get decent commission or brokerage from these companies.

Mutual Fund Advisor

A mutual fund advisor is a person who advises you on your mutual fund investments, his work is to study your requirement, educate/ give you knowledge on the mutual fund, recommend the schemes which are best suitable to you according to your requirement and review your mutual fund investments periodically. A certain amount of fees is to be paid to the advisor.

 Do you need a Mutual Fund Agent?

A Mutual Fund Agent is expected to provide certain services to help the investors to invest their money.

Checklist of services provided by a Mutual Fund Agent

1) Mutual Fund Portfolio Reports 

A mutual fund agent is expected to provide you a consolidated report periodically. He should assist you with the different type of reports like absolute return report, annualized return report, profit/loss report, dividend report, transaction report, Investment Summary report. He should be able to give detailed reports at a time when it is required or summarised report at times.

2) Capital Gains and Advance tax

During the time of advance tax payment and filing the income tax returns, you may need capital gain report comprising both short term or long term gains, so should be able to provide you with that.

3) Portfolio Online Access

You should have the online access to generate these reports if your agent provides you online access to your investment portfolio.

4) Income Tax Scrutiny

Your agent should be able to give you the past historical record even after 6 years. As it happens, Income Tax Departments at times may ask you about the details or the sources for some investments.   You may have made an investment 6 years back and withdrawn them  3 years later and reinvested the redemption money in another scheme. He should maintain the records for even closed investments.

5) Paperwork

There is a lot of paperwork involved and documentation when you are investing in mutual funds. The agent must assist you with the KYC completion and file up the mutual fund application form. These form processes are bit tedious but an agent is well versed with all these formalities.

6) Follow up, update and corrections 

The mutual fund agent should be easily coordinate with the things like SIP or STP’S as they have certain deadlines, updating the records with Aadhar Card, OR new bank details etc.

How to buy Mutual Funds directly or without a broker?

You may choose the direct plans of mutual fund schemes instead of regular plans if you have decided to invest in mutual funds directly. There are two ways by which you can invest in mutual funds directly –

First Method – You can directly go to the branch office and fill up the application form yourself. and if you are planning to invest in 4 to 5 companies then you will have to visit each company’s office personally.

Second Method – you can visit each company’s website and check the procedure for online investment and follow them. If you are planning to invest in 4 to 5 company then you will have to repeat the process again and again separately for each company.

Evaluate both the options

Now you need to weigh both the pros and cons for both the options of investing in mutual funds directly and with the help of a broker/ an agent.

Do you think you can do all the things mentioned in the checklist by yourself? If your answer is yes, then you can invest directly without a broker/agent. If your answer is no, then you should go for a broker/agent who will provide you with all the above services.

Also, think about if the things you do yourself is really worth enough for the benefit you get by way of reduced expenses or increased returns.

Start investing in Mutual Funds Today!

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