Surely. SEBI has already allowed this.
Most of the brokers act as distributors for providing platforms to their clients for buying and holding MFs in the Demat account and obviously they charge for it.
You can buy Mutual Funds in two ways-either you approach a distributor or buy directly from asset management companies/fund houses.
Generally distributors take around 1% as upfront and 1% as trailing commission from your investment every year. Since this is a type of long term investment, a big portion of profit that an investor earns goes to the distributors. So, it is profitable to buy MFs directly from Asset Management Companies. Thus, an investor can bypass distributors and the savings on agents’ commission goes to the investor as lower expense ratio. Even a difference of 1% can make a big impact on the returns in a long term investment.
But one thing must be noted here that when you buy MFs directly from AMCs, you have to fill up different forms, keep a watch on the investments on different accounts for different MFs, maintain different user credentials, prepare capital gain statements, etc on your own. These inconveniences lead an investor to run to a distributor and get charged for their services.
There is a solution for this. Technology based discount broker Zerodha has a platform called Coin that lets you buy MFs directly from Asset Management Companies online without paying any commission through Demat account.
- You can enjoy easy SIP
- You can start, modify, stop whenever you want
- You can place your orders for purchase or redeem funds on the basis of NAV
- You can get single capital gain statement for your investments.
- You can have Profit & Loss statement
- Investment worth Rs 25,000/-(first) is free. Then flat Rs 50/-per month for investment irrespective of number or value of MF transactions across all fund houses/AMCs.
Besides, Zerodha provides you platforms for trading and investing also. They charge the lowest with quality service. They charge 0.01% or Rs 20/- whichever is lower per executed order for Intraday and they charge NO brokerage for Delivery.
Zerodha provides facility of one platform (on your Demat) for Equity, MF, Currency, etc.
For opening accounts (Demat & Equity @Rs 300/-, Commodity @Rs 200/-) online instantly, one may click here.
