Mutual funds may be among the most popular investment products, but the mechanics of investing in them are not very investor friendly.
For example, it can take up three days for changes that you make to your portfolio to become effective. To make life easier, the industry is now creating an online platform, but how does it help?
Now, it could take as long as three days to try to switch from units of one fund house scheme to another, but the upcoming mutual fund industry online platform promises to end all that.
CB Bhave, chairman of Sebi, said, “In case of the mutual fund industry, we don't have a central database. If you have investments in 15 different schemes then you will get 15 different statements."
The Association of Mutual Funds of India (AMFI) is acting on Bhave's words and plans to launch a common mutual fund platform in six months, with depositories NSDL/CDSL, and mutual fund registrars KARVY/CAMS as partners.
The platform will help investors view their entire portfolio on a single portal and switch between schemes of different fund houses.
AP Kurian, chairman of AMFI, said, "Our internal target to start operations is March 2010. The other operating platforms will get linked into this. This will be a master platform."
The four partners will share the initial cost, while fund houses will pay for the services on the platform. But the industry isn't complaining as it looks for ways to boost slumping sales and reduce costs.
Even more so, after the new norms on entry/exit loads that reduced commissions.
Jaideep Bhattacharya, chairman of AMFI panel, Common Industry Platform, said, "If you look at the profits of an Indian AMC, it is 6 bps lower than the world average and we are 4 bps higher when it comes to the global average of costs. So, we have to find a way to reduce costs and a technology platform will do just that."
Meanwhile, for several mutual fund investors, a common database will save a lot of hardships and will mean convenience at the click of a button.
For the industry that is desperately looking to lower transaction costs, such a platform could be a game changer, a challenge though would be to set it up in about six months’ time.
For example, it can take up three days for changes that you make to your portfolio to become effective. To make life easier, the industry is now creating an online platform, but how does it help?
Now, it could take as long as three days to try to switch from units of one fund house scheme to another, but the upcoming mutual fund industry online platform promises to end all that.
CB Bhave, chairman of Sebi, said, “In case of the mutual fund industry, we don't have a central database. If you have investments in 15 different schemes then you will get 15 different statements."
The Association of Mutual Funds of India (AMFI) is acting on Bhave's words and plans to launch a common mutual fund platform in six months, with depositories NSDL/CDSL, and mutual fund registrars KARVY/CAMS as partners.
The platform will help investors view their entire portfolio on a single portal and switch between schemes of different fund houses.
AP Kurian, chairman of AMFI, said, "Our internal target to start operations is March 2010. The other operating platforms will get linked into this. This will be a master platform."
The four partners will share the initial cost, while fund houses will pay for the services on the platform. But the industry isn't complaining as it looks for ways to boost slumping sales and reduce costs.
Even more so, after the new norms on entry/exit loads that reduced commissions.
Jaideep Bhattacharya, chairman of AMFI panel, Common Industry Platform, said, "If you look at the profits of an Indian AMC, it is 6 bps lower than the world average and we are 4 bps higher when it comes to the global average of costs. So, we have to find a way to reduce costs and a technology platform will do just that."
Meanwhile, for several mutual fund investors, a common database will save a lot of hardships and will mean convenience at the click of a button.
For the industry that is desperately looking to lower transaction costs, such a platform could be a game changer, a challenge though would be to set it up in about six months’ time.
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