If I invest in direct plans, will the fund house help set up SWPs, STPs, etc.? | Value Research Ashutosh Gupta explains how not to lose out on services while investing in direct plans
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If I invest in direct plans, will the fund house help set up SWPs, STPs, etc.?

Ashutosh Gupta explains how not to lose out on services while investing in direct plans

If I invest in direct plans, will the fund house provide services like setting up SWPs, STPs and redemptions?
- Vijay Kumar Marthi

No. Direct plans are meant for do-it-yourself investors. I will provide a bit more perspective on that. For a direct plan investor, there are two to three different ways to make transactions and manage the investment on an ongoing basis. To make any SIP or SWP or other transactions, one can either use the bricks and mortar infrastructure, the investor service centre of the fund house of the registrar and transfer agents - KFintech and CAMS. He can figure out a nearby investor service centre and go in person to make applications for SIP or SWP.

Otherwise, one can transact online on the fund house's website. Several online investment platforms also facilitate transactions in direct plans. The fund house would be able to provide the enablement in terms of physical infrastructure, investor service centres, and enablement to make transactions through its website. But the investor will have to make these transactions on his own.

I have been using a platform by the name of Mutual Fund Utilities for the last several years, and I find it a fairly convenient and hassle-free way of transacting in mutual funds. I believe that anybody comfortable doing his banking online should find it convenient and hassle-free to make mutual fund transactions online with all the digital modes available these days. There might be some friction when onboarding with KYC and other requirements, but even those are possible sitting at home.

I'll say that all this is very much possible. Managing one's direct investments is fairly easy to do online, but one does not get the kind of hand-holding that an intermediary would provide. Also, I believe that's not entirely a bad idea because that also eliminates the possibility of being mis-sold a product.


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