I was quite pleased to hear that the Securities and Exchange Board of India (Sebi) had declared that direct investment in mutual funds will no longer attract any entry fee.
Saving 2.25 per cent a month on my systematic investment plans (SIPs) meant almost Rs 5,000 year for me. Wow, I told myself. even taking a day off is worth this. The do-it-yourself (DIY) belief had been rejuvenated.
Monday, January 22 was the eventful day. While the Sensex was melting by over 1,400 points, I was on a train from Andheri to Churchgate, to visit the HDFC asset management company (AMC).
I reached there by 2.30 p.m and waited for my turn. After a short fifteen minutes wait I reached the helpdesk which was manned by two people.
I was immediately given a booklet that contained details of all their schemes.
I was supposed to select one, ask for the form, fill it up and submit along with my PAN card Xerox.
The form, itself, is two pages long with a whole lot of queries. Something, I had not done before because I was used to just signing the form sent by my regular distributor and the rest would be filled by him. But the place was rather crowded, with a lot of people wanting to redeem or shift from their aggressive funds to safer ones because of the fall in the market.
So I went to SBI Mutual Fund. The place was completely empty. No crowd at all. But both the helpdesk employees were busy on phone. I approached the receptionist for help and soon, one advisor came to give me personal attention. "How will you inform me that my money has been invested?," I asked.
"We do not have the SMS facility. However, we will communicate through an official letter or send you your account statements through email," he said. "Can I give instructions over the phone if there are any changes?, " I enquired further.
"No, only those in writing are accepted," came the reply. I reached home and tried their helpline number to crosscheck if the SMS facility was there. Surprise, surprise. they said yes. Definitely, there is some confusion.
Not satisfied with both the results, I decided to approach another fund. So here I was at Birla Mutual Fund in Andheri. Soon someone from the customer service joined me with, "Since the scrapping of entry load for direct investors, a lot of customers are coming to our offices."
After going through the booklet, I decided on Birla Sunlife Equity Fund. On
enquiring whether I should go for growth or dividend option, she explained that growth would be better in an open end fund.
"Only for ELSS, which has a three year lock-in period, it makes sense to go for dividend option." It took me an hour to fill up the form. Another fifteen minutes to get an acknowledgement. Finally, I was able to invest directly.
However, wanting to know whether the process can be made simpler, I decided to call other funds directly. I called up Reliance mutual fund with a query about their fund. The helpdesk promptly connected me to an advisor, who promised to get back to me. I am still waiting.
So I went for the third option - online investing. It definitely sounded better than travelling all the way to the fund house and calling had not helped. Most fund houses also have this facility whereby you can apply for funds or purchase more units through their official websites, after acquiring a special pin number.
However, there are some "ifs" and "buts" here. That is, though I can buy through the fund's website, I need to have my bank account with those banks which have a tie-up with AMC. For instance SBI Mutual Fund has a list of banks which it calls a part of their "core banking system". But the important thing is that such tie-ups are to just about six to eight banks (mostly private sector banks) currently.
A point to remember is that the entry load is waived, only if I go through the fund's official website. Purchases through any other website will attract the entire entry load.
So has life become any simpler? - Yes, it is possible to do it yourself. But also remember that the entire process would take you, at least an hour or more (half-day leave from your office). That is, besides the travel and waiting time.
As far as the investing online or over the phone goes, I am not too convinced that AMCs are equipped to handle this. Both the processes, though simpler than travelling, have left me a bit frustrated. To end with a quote from an advisor, "Madam it is better if you negotiate with the distributor and get a discount on the entry load. This would ensure that the process remains hassle-free." Need I say anymore?