3 Quick Checks To Verify Your Mutual Fund Distributor (MFD) Instantly

Mutual Fund Distributors (MFDs) guide investors in their investment journey. They help investors understand various mutual fund products and the associated features of such products. They also keep in mind the investor's needs and priorities and ensure the appropriate selection of products for meeting investors' financial goals.

MFDs play a crucial role in investors' financial decision-making process, and hence, the selection of an MFD is an important milestone.

It is advisable to check the following critical criteria before selecting an MFD to help you with your investment journey, said Kashmira Kalwachwala, Head-Investor Relations, Tata Asset Management.

Certification & Registration:

• The MFD needs to be certified and registered with the Association of Mutual Funds of India or needs to be registered with SEBI.
• In case you are dealing with a Corporate MFD, then request the EUIN (Employee Unique Identification Number) of the advisor handling your account.
• Check the validity of the certification.
• An expired or mismatched ARN may indicate that the person may not be authorised for handling your investments.
• Details of MFDs with valid certification & registration are available on the AMFI website. This can be checked at https://www.amfiindia.com/

Experience, Trust and Transparency:

• A strong track record in the financial services industry, and specifically in mutual funds, is a positive sign, as they have navigated different market cycles, including downturns.
• Look for recognised certifications that prove their professional knowledge. Credentials like Certified Financial Planner (CFP) demonstrate a deeper understanding of financial planning.
• Request the MFD to share the commission structure of the products that he has suggested.
• Ensure that the product suggestions provided are independent and not biased towards products with higher commissions.

Client Centric Approach:

• Assess the MFD's professional conduct and service quality.
• Ensure that there is written documentation and a service agreement with the MFD.
• Periodic Portfolio Reviews are conducted by the MFD.
• Ongoing service and periodic engagement with the investor, post-sales.

By conducting these three checks, investors can safeguard their interests and ensure they are working with a qualified, ethical, and transparent mutual fund distributor, as per Kashmira Kalwachwala, Head-Investor Relations, Tata Asset Management.

Disclaimer

The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred to as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.