Where to find reliable advice in the mutual fund maze

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Read more: Why regulatory restraints are not enough to contain retail trading in F&O Another prevalent channel through which people buy mutual funds is banking. Many people—especially the older generation—happen to buy MFs through banks as they’re easy targets for the banks. Bank employees generally need to meet their sales targets and guiding investors is usually not their forte once the sales are done.

Direct fintech apps and banks might have intentions other than just selling MFs. This is because both have other avenues to mint more money. For some fintech apps, selling direct MFs may be a way to attract customers.

The real business for many of these platforms is cross-selling other products like direct stocks or futures and options (F&O). Banks, on the other hand, may be incentivized more towards selling guaranteed insurance plans that fetch them multiples of the commission that they earn through MFs. So, where can you get credible mutual fund advice? Here are the options along with their pros and cons.

There are 140,000 MF distributors spread across the country. If you start looking, you’ll likely find one in your locality. When you buy an MF through them, they get a small commission from the asset management company (AMC).

Since they earn through commissions, some of them might end up giving you a product that fetches them the highest commission instead of one that is best suited for you. Distributors can help investors get a basic idea of the MF scheme and handhold them through documentation, KYC-related issues, etc. In terms of recommending MFs, they can give incidental advice.