Last Updated on March 26, 2016
When direct mutual fund plans were introduced, many ‘advisers’ said, they would not recommend direct plans because they will not receive feeds from the AMC (a fancy term for account statement) and hence cannot monitor portfolios. The truth was that they were looking for an excuse to justify the trail commissions they receive.
Soon the SEBI Investment adviser regulations were introduced which mandated that distributors cannot provide investment advice (other than incidental advice). If such people want to earn from advisory, they will have to register and give up distribution/execution services.
Update: AMFI now provides direct plan feeds to SEBI registered advisers. This has resulted in a slew of direct fund investment portals
Many, make that most, in the financial services have ignored these regulations. Again the excuse of inability to manage portfolios in the absence of AMC feeds is paraded.
Get free money management solutions delivered to your mailbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Some resort to use organizations like iFast which provide feeds from direct mutual funds plans for a cut in the profit. However, the feeds are only from a few AMCs. Since there is a third party involved, this goes against my definition of fee-only advisory which involves only the planner and the client.
Fee-only planners who do not want third party involvement has queried about how folios can be managed in the absence of feeds.
There are many ways to easily accomplish this.
As per my uninformed understanding, portfolio management involves the following steps:
- Taking stock of all transactions in the past and those done in the period prior to review.
- Calculating XIRR of individual instruments, for each asset and for the folio.
- Analysing the instrument in the folio and suggesting future course of action.
Steps 1 and 2 depend on transaction details (aka feed). Step 3 requires analysis.
The financial planner wants a simple way to upload past transactions (before client engagement and between reviews) and keep track of them.
MProfit Advisor offers a simple way to do this. There must be other software which do this too. I tried out Mproft yesterday and it works like a charm.
I did the following:
- Download trial version.
- Go to CAMS and get detailed portfolio for all folios including empty ones.
Search for “Consolidated Account Statement – CAMS + Karvy + FTAMIL + SBFS”.
- Upload the CAMS PDF file into Mprofit and tag each instrument. That is it! Takes only a few minutes for all my transactions since 2008.
- Most importantly, Mprofit has direct plan filters for easy tagging.
The planner can have 100s of folios (different pricing) tag them according to family, financial goal and much more.
No amc feed is necessary.
To accomplish this, the planner must instruct the client to get the Cams statement from time to time.
The statement will go to the clients email which can be forwarded to the planner. The statement will have a password which has to be shared to the planner. This password is only for the statement.
Some amc statements may not be available at Cams. Account statements for such amcs can be uploaded similarly at Mprofit adviser.
In this day and age this hardly takes any effort from both parties.
Getting the statement will take about 30 seconds of effort for the client. Processing it will take about 10 mins or less for the planner.
I fail to see how this cannot be pulled off.
If the planner is too busy to spend the 10 mins, he/she must have many client and therefore should be rich enough to hire some help!
A client who is smart enough to understand the benefits of direct plans will be smart enough to spend 30 seconds to get the statement.
If your financial adviser is not suggesting direct mutual fund plans for you, get rid of them.
For step 3 analysis (some advisers will make it sound like voodoo!). You can consult online portals, excel sheets from a certain site .. ahem, or buy yourself fund analysis software.
Where there is a will there is a way. Where there is a trail, there is …..
Choose only a fee-only financial planner who will suggest direct funds and offer financial advice for a flat fee and not as a percentage of your portfolio.
The list of fee-only planners on the right panel gives you a starting point. Do not engage them if you are not comfortable with them or their terms.
Better still, DIY.
🔥Enjoy massive discounts on our courses and robo-advisory tool! 🔥
Use our Robo-advisory Excel Tool for a start-to-finish financial plan! ⇐ More than 1000 investors and advisors use this!
New Tool! => Track your mutual funds and stocks investments with this Google Sheet!
- Follow us on Google News.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Join our YouTube Community and explore more than 1000 videos!
- Have a question? Subscribe to our newsletter with this form.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Get free money management solutions delivered to your mailbox! Subscribe to get posts via email!
Explore the site! Search among our 2000+ articles for information and insight!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu gets a superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low volatility stock screeners.
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)