Nine fund houses offer investing through mobile phones to
woo investors Fund houses are offering the facility of investing through mobile phones. However, the approach and process varies from fund house to fund house. While HDFC, Birla Sun Life and UTI allow investments from mobile phones through applications, Axis, DSP Black Rock, IDFC, Pramerica, SBI and Tata provide SMS based investing facility.
Application based investing
For investing in HDFC Mutual Fund schemes, investors have to have GPRS facility on their phone and they have to download an application called ngpay.
UTI Mutual Fund had launched an application by tying up with Mchek. It has around 2500 registered users but only 100 - 200 investors transact through it. “The application and the entire process of pre-registration has become obsolete,” said an UTI official. UTI Mutual Fund is working on launching an end-to-end application where transactions can be done through a web based application through internet banking and debit cards on mobile. It is planning to revamp its existing application by adding more features.
Reliance
Mutual Fund too allows its investors to invest upto Rs 50,000, redeem, switch
units, view account details, transaction details, NAV and request for account
statement. They can access this service through ‘m.reliancemf.com’ on their
mobile phones. In order to opt for this service, investors have to first register
for online transactions facility on Reliance Mutual Fund website. Only registered users having internet
PIN can utilize this service. Reliance gets 4000 - 5000 SMS transactions in a month and around 30,000 investors have registered for this facility.
For investing in Birla Sun Life schemes investors have to download an app called mChek. Investors have to first submit a registration form to CAMS or BSL branch office. The registration procedure takes up to 25 days. Once the registration is authenticated, mChek sends a message to the user to download the application. Investors require a six digit numeric mChek PIN for executing every transaction.
SMS based investing
While most fund houses allow transacting in equity schemes, IDFC only offers SMS based investing facility in its IDFC Money Manager Fund (Treasury Plan). Investors can invest upto one crore in this scheme. More than 5000 investors have registered for IDFC’s SMS service so far. IDFC has received 2500 purchase requests and 1800 redemptions (YTD) requests in its IDFC Money Manager Fund (Treasury Plan).
DSP Black Rock launched SMS based investing facility in July 2012 and has received 4000 registrations from investors so far. Earlier the fund house was providing this facility only in its DSPBR Money Manager Fund.From April 2013, DSP BlackRock has extended it to all schemes.The fund house is spreading the idea of paperless and fast investing ease through this video.
Similarly, SBI Mutual Fund allows its investors to transact in 24 schemes through SMS.
Process
Investorshave to submit a PIN Agreement form and debit mandate form to the registrar or the AMC. All fund houses offer this facility free of cost. However, the bank may charge for registering debit mandate. Normally, it takes 15 days to 25 days for this facility to get activated. The investor receives a confirmation after which they can start transacting.
Investors can invest through their existing folios. If investors make a redemption request, proceeds are credited to the users registered bank account. After sending an SMS, it takes three to seven days for the investor’s bank account to get debited. If the investment amount is less than two lakh, investors get the same days NAV and if the amount exceeds two lakh the NAV is allotted on the day on which the scheme receives the money.
Investors can only link one mobile number with one folio for one scheme. If they wish to invest in another folio or scheme they can call up the toll free number of the fund house and execute their transactions.
Some fund houses like DSP Black Rock and Birla Sun Life only offer this facility to resident individuals while others also provide it to HUFs, Non - Resident Indians and Persons of Indian origin.
Pros & Cons
One advantage which an SMS based facility has is that users don’t need to have high speed internet connection and or a smartphone unlike application based service.
If there is a sudden market crash and one needs to invest in an equity fund he/she can do so by just sending an SMS instead of logging on to internet or going to the distributor’s office. Facilities like these bring ease and offer speedy transactions by cutting down on paperwork. One flipside of allowing investors to transact in equity schemes is that it could entice investors to redeem frequently, say fund officials.
Fund officials say that although many investors have registered for such facility but only a handful of them are actually using it. On the other hand, internet based investing, has more investor acceptance than investing through mobile.
Not all fund houses have launched SMS or application based investment facility. It remains to be seen if other AMCs follow suit.
