shows how systematic gathering and maintenance of clients’ personal information can save you a lot of time and effort
The mutual fund investment process requires several steps to be followed with a major one being submission of the required information. The information relates to personal details about the investor. The information sought is often repetitive, making it a tiring process. Instead of considering this as an unpleasant activity, mutual fund distributors can actually assist in this effort systematically. It will go a long way in ensuring an improved experience for all involved. This is how it can actually be achieved.
Objective
The main objective of a distributor should be to ensure that once all the required information about a client is collected, it should be stored and managed effectively. This will reduce the need for calling for the same information again and again, thus saving time as well as effort in future.
Here’s a checklist of investor information required and the action suggested:
Personal information
Certain personal information is essential for every investment. It starts with the full name of all the investors, along with the father’s or husband’s name. The other personal details include the dates of birth of every investor and the correspondence addresses along with other contact details like telephone numbers and email addresses. The addresses section will need adequate attention especially when there is a non-resident investor.
Action point
This type of information is likely to remain constant and it makes sense to ensure that all this information is recorded and then accessed when required. The best part is that the effort need not involve a high cost as it can be done by simply recording these details on a computer. If the volume is high then some use of data management software might be more useful in proper retrieval and use of the information.
Bank Information
A critical aspect of the mutual fund investment is the details of bank accounts of clients. This is required for direct credit of dividend and the redemption warrants or for printing the account details on the cheque issued by the mutual fund. The details include bank name, branch address along with the account number. Further the MICR code is required for electronic transfers.
Action Point
Details of bank accounts of clients are very sensitive and have to be protected from theft. Access to this information should be restricted or password protected. It is also important that confirmation is obtained from the client with regard to the account number to be provided for every investment. A copy of the PAN (permanent account number) card issued by the Income Tax department should also be obtained at the time of the first investment. If there are joint holders in an investment, then the copies of the PAN card of all the holders will be required.
Action Point
The distributor can also keep a copy of the PAN card of the client in its records so that it is easily accessible whenever required. Care has to be taken to ensure that the correct PAN is mentioned in the investment form and in the records of the fund.
Other details
There is also the Know Your Client (KYC) verification that has to be completed for investments in excess of Rs 50,000 but in the future it could even be made applicable on a wider scale for smaller investments. This requires submission of proof of address as well as identity of the investor.
Action Point
It is better to store multiple copies of identity proof and address proof of clients for verification as and when required.
Additional information
There is additional information that will be required while submitting the application. One of this is about the person/s to be appointed as the nominee/s by the investor for payment of the proceeds in the event of the death of the investor. It is also essential that the client is consulted during every investment on the person to be nominated.
These are small steps but will go a long way in providing an efficient service to your clients. Your client will appreciate this as he is saved from the irritating requirement of having to fill up the same information again and again.
Arnav Pandya is a Financial Planner, Trainer & Columnist.
