Here is a list of 15 different ways to invest in direct mutual funds and how to choose a direct plan portal. MF Utility (MFU) a transaction aggregation portal where one can invest in 26 AMCs, is the game changer for the evolution of such portals. At six portals in the list below use for transacting.
While as a development, I welcome it, I am not too sure if it is health for the user. There are one too many commission free intermediaries between the investor: the portal and MF Utility. If the aim is to just invest, this is a needless complication.
Also, the association of mutual funds is in talks to sell MFU. If and when this happens, MFU may not remain free and this will affect these direct portals too.
So I will recommend avoiding any portal that operates via MF Utility. If you like their services, you can always pay for the advice and invest directly yourself.
Are you KYC compliant? In other words, does the AMC know your PAN no and address (with proof)?
If you are KYC compliant
The simplest way to invest in direct plans is
1 "directly" with AMCs. This is free and an account can be opened online. Don't worry about managing "multiple accounts". It is not a big deal.
The next simplest way is to use
2 CAMS online - desktop or app. Of course, you cannot invest in AMCs that use Karvy, Franklin Templeton and Sundaram. But you can always use CAMs and get an online account with non-CAMS AMC. This is free as they get compensation from the AMCs.
How about tracking? No biggie. Get the CAMS+KARVY+FTAMIL+SBFS consolidated account statement and upload it to any online tracker.
3 If a single portal is important to you get the free-for-now MF Utility.
If you are not KYC compliant
Decide on the fund to invest and go to either the fund office, CAMs or Karvy and submit your KYC documents in person. (Yes, that is one human interacting face to face with another. Won't kill you).
Else, CAMS has an option to get an online KYC, so do some other AMCs (Eg. Birla, Quantum). Opt for PAN-based E-KYC instead of Aadhar based to avoid investment limits (50K per annum, per fund house).
Invezta also has PAN based e-KYC option.
Now for the other options.
(a) Opt for a portal which does not depend on MF utility. Ask this upfront as it is not always clear from the website.
(b) Pay a flat fee per month or per year. NOT per transaction. This fee will have two components: for investing and for Robo advisory.
(c) Do NOT pay a fee that is a percentage of your assets under management or amount that you invest.
What is Robo-advisory?
An algorithm (coded by the people who run the website) is used, after getting user inputs, to determine asset allocation for a particular financial goal, and/or suggest mutual funds.
This is suitable for a level-headed, mature investor who is looking for a shortlist of funds to invest, automated performance tracking and portfolio rebalancing triggers.
This is not suitable for an investor who wants to call up the advisor to know why the market crashed by 1% today or get opinions from random strangers at Asan Ideas for Wealth.
Personally, I would prefer Robo advisory only for tracking and rebalancing and not for fund selection.
The fund selection part is decent enough in these portals. It is the tracking that needs checking. So if you want to invest via one of these portals, ask for a test drive and find out if this is good enough for you. If the interface is basic that you can get via DIY tools like this, Google Spreadsheet for tracking progress to financial freedom, why bother? The features have to be unique not found in any other tracker.
Test the Robo portal first. Give some weird inputs. Say that your age 105 etc. and check how robust it is. If you are not impressed, stay away.
Btw, I am working on a Robo spreadsheet myself :). It is free, but I got to make sure it is SEBI-compliant though!
All of these portals provide Robo advisory to different levels. Unless I actually make an investment (not interested, happy with my direct AMC accounts), I cannot comment on that aspect.
Portals that depend on MF Utility
Rs. 850 a year: 3 recommended portfolios to choose from and basic insights
Rs. 2000 a year: 3 accounts in a single login and 5 recommended portfolios with advanced insights
Rs. 3500 a year: 5 accounts in a single login and 10 recommended portfolios with advanced insights
5. Oro Wealth
The fee structure is a pain to decipher. Above one lakh, it is 0.1% of the transaction amount. Have a look:
6. Piggy App: piggy.co.in This uses BSE Star platform (why?) in addition to MFU. I cannot find the fees!! And I will not consider a service where the fee is not explicit.
7. Bharosa club
Basic plan: SIP via MFU in certain funds (free)
Premium plan: Invest in any fund based on risk profiles + portfolio insights: Rs. 150 a month
Pro plan: Premium + portfolio migration assistance and SIP++ (market linked investments) Rs. 1000 a month (beta?)
8. Wealthtrust app
Basic plan (free): which allows you to search for "smart funds"
Premium plan: Rs. 99 a month, Paperless Account Opening; Complete Portfolio Management; Their suggestions.
Smart advisory: to be launched.
9. Wixifi.com "0.125% per quarter on your average quarterly balance"
Portals independent of MF Utility
10. Invetza.com Rs. 79 a month (948 a Y) for investing and basic tracking and Rs. 109 a month (1308 a Y) for personalised allocation and tracking. Invezta has a PAN based e-KYC option.
11. Kuvera.in At Rs 134 a month (1608 a year) (before taxes), this is a very good price too.
"Flat-fee of Rs 199 each time you buy a mutual fund scheme, or set up a SIP" does not sound too appealing to me. If I do not set up a SIP and invest each month ...!
13. upraise.in (need to confirm if this is not MFU dependent for sure)
This is a typical charge schedule:
"Transaction Fees: 0.15% of the total investment amount (inclusive of all taxes)
Upraise Advisory Fees: 0.60% of the total investment amount (inclusive of all taxes)" Sorry, that sounds expensive.
14. Update: Moneyfront.in is yet another portal. I need to check if this depends on Mf Utility or not. Fee is Rs. 1200 a year for resident Indians.
15: Update: Expowealth.in. offers two different plans Rs. 89/- per transaction or Rs. 129/- a month. Not sure if this depends on MF Utility.
16: Coin by Zerodha. Direct mutual funds in demat mode. Avoid!! Why? : Never Hold Mutual Fund Units in Demat Form!
If you do not want Robo advisory, choose CAMS/AMCS/MF Utility and track with free online trackers or my excel sheet
If you want Robo advisory and portfolio tracking and management services, then choose a non MFU portal with a flat fee per month or year. It is better if they have only 1/2 plans. Ask for a test drive and clearly understand the features.
If you already have funds, ask them if those can be tracked as well. If they cannot, then check if you can pay for advice and invest elsewhere. Portals that depend on MFU will not have any issues with handling past investments.
Whatever you choose, you can always get an account from the AMC, and find your units there. That is the mother ship.
Are there more? Have you used one of these portals?
Have I left out any direct fund portal? If you have used any of the above, please share your experience.
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