MF News ET Money targets regular plan investors: To help them switch to direct plans

ET Money targets regular plan investors: To help them switch to direct plans

The company has targeted 17 million investors (1.7 crore investors) who invest through distributors to switch to direct plan.

Team Cafemutual Oct 17, 2018

In a press release, ET Money has announced that the company aims to help 17 million investors who have invested in mutual funds through regular plans to switch to direct plans for free.

The company said that it would allow an estimated 1.7 crore existing mutual fund investors to convert their regular mutual fund investments into zero-commission, direct mutual funds and start saving lakh in commissions.

The company claims that this is one of the biggest initiative by any company in the space to simplify investing. “All investors who convert to direct plans will also be able to do free, unlimited investment & withdrawal transactions in direct funds through ET Money app,” said the company.

“Indians at large have been denied access to simple, low cost & transparent financial solutions for decades. We want to change that and this launch to simplify movement to direct mutual funds is in line with that mission”, said Mukesh Kalra, CEO of ET Money.

The company further said, “By shifting to direct plans, users can save upto 1.5% in commissions every year compared to regular plans. In recent scenario of volatile stock markets, if investors believe in holding back new investments, then converting one’s regular mutual funds to direct mutual funds can be a great option.”

“Keeping in line with trends in developed markets, this launch will ensure that Indians too can choose low cost investment products for their wealth creation purpose” said Ajit Kumar, Wealth Business Head, ET Money.

Last month, the company allowed its existing to switch a whopping Rs.150 crore from regular to direct plans.

The company said, “The process to switch to direct funds is super-simple. Investors just need to upload their mutual fund statement on the app and within 30 seconds they will be shown the option to shift your regular funds to direct plans. It also shows possible savings in commissions, applicable exit loads and taxes, so that you can take an informed decision. The app also assists them in getting the transaction statement by providing a step by step guide. Once converted to direct mutual funds, the investors will also be able to continue investing in them from the app at no additional cost.”

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42 Comments

Sunil Lalge · 5 years ago `

Why they are not making new customers.they do not want to spent on kyc n other work .This is misuse of system .cheating with existing distributers.
SEBI should go through this and should allow healthy growth and all partners growth, not making to kill distributors. All should think loosing employment opportunities in this business.
All distributors should ask SEBI why it is allowing such activities.

Vidya · 5 years ago `

ET Money is not looking for commission but beyond that data of clients. Which can give them a lot of Easy Traded money.
No Free lunches in the world.

KAMAL DUREJA · 5 years ago `

ET MONEY CAN NOT TAKE POSITIONS OF ADVISORS WHO R SERVING THE INDUSTRY AND CLIENTS WITH THEIR KNOWLEDGE, EXPERIENCE AND WITH RELATIONS. DO NOT PANIC. NOBODY CAN TAKE THE POSITIONS OF ADISORS.DO NOT FORGOT YOUR POWER AND FOCUS TO DO YOUR BEST AND DELIVER BEST

arun Sharma · 5 years ago `

This whole campaign is misguided. There is no 1.50% annual difference in the NAVs of direct and regular plans, so the whole premises is being wrongly portrayed. The annual difference in the NAVs vary from .20% to .50%.

Secondly who would be responsible for the capital gains tax applicable to investors??

Thirdly a recovery suit should be filed against the ET Money to reimburse the cost of doing KYC and educating the customer initially by any distributor who first acquired the customer and did KYC. There are no free lunches in this world. ET Money wants to do it, most certainly do it; but pay for the damages. The cost per customer is not less than Rs 10000/- per customer.

4th ET Money and others should also reimburse clients who invested in small and mid cap funds all through last 18-24 months, misguided by the publications and online portals, enticing through the higher returns. These funds were not suitable to client risk profiles and the clients are loosing almost 20-25% on an average. Whereas any portfolio acquired by our firm through this period is not at all affected. Worst would be a minus 5%. Minus 5% compared that to 20-25% loss on the recommendations of ET Money and these portals.

Investors do understand that these portals have no accountability / responsibility towards anyone and they are just greedy. I have in fact acquired more than 50 clients in last 6 moths, who were investing directly and now want to seek our help in rectifying the mistakes.

Therefore, dear distributors nothing to worry; We should instead give them sleepless nights by filing a recovery suit.

Gaurav · 5 years ago

Right Answer Arun..Direct Team has totally mis guided investors with 1.5%...

ANURAG DUREHA · 5 years ago `

This is where the regulator's role is to be questioned. The purpose of Direct schemes was to give advantage to Corporate investors/HNIs, who have the expertise. Retail investors were and are always being alerted to be careful and study the schemes before investing. We, as distributors, very well know the knowledge gap our retail investors have.
It is ridiculous that to explain about Mutual Funds, one has to obtain AMFI/NISM certification but for a Retail investor to invest in Direct schemes, SEBI has not developed any method to check retail investors' knowledge level. They will surely fall in this trap by ET Money and will realise only after they have suffered. I agree with Bhavika's comment above. SEBI is bypassing doctors and promoting sale of medicines without doctor's prescriptions.
Rest I leave to the wisdom of SEBI.

Jitender · 5 years ago `

It should be probed, how they managed to steal the confidential data of regular customers. They should be punished.

Pawan Khurana · 5 years ago `

Another SOLID step to IRADICATE IFA from MF industry, with the help of MF INDUSTRY & it's REGULATOR. Full support to ET.

vishal Rastogi · 5 years ago `

Bhai dunia men kabhi koi chij free nahin mile hai , jo ise bhetar samaj leten hai woh hi phyada kamaten hai..........Unko kya yeh service dene ke liye upar(bhagwan) se kuch mile ga.....Jo befkuf banten uneh banene den !

Bikram Bhattacharjee · 5 years ago `

How is this move helping the Mutual Fund Industry as a whole. Will SEBI look into this matter seriously, as SEBI recently slashed the brokerage on regular plans, keeping in view that more MF investors can be be brought under MF investment platform as there will be lesser difference between regular and direct plans. Now ET money without procuring new clients under direct plan are targeting regular plan clients who are already existing mutual fund investors. This is clear poaching of regular investment clients and that also with a press release and affecting the bread and butter of many IFA's. Is it the right way of growing a sector in India?

John · 5 years ago `

ET is looking at easy way to get new clients.. they don't want to take the pain by meeting a new client, explaining them the pros and cons of investing and suggesting funds as required by the client's need.. all these things a distributor have already done.. now acquire them with easy switch.. and show they are doing some great service to society.. kudos to you guys by hitting distributor community on their stomach..

Amit · 5 years ago `

Simultaneous existence of two plans, direct and regular is at the root of all these problems. Which other countries are having two plans for each mutual fund scheme?

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