How to rectify some of the possible mistakes in case of mutual fund investment?

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How to rectify some of the possible mistakes in case of mutual fund investment?
Among few of the several mistakes that an investor can undertake while investing or redemption of the mutual fund investments are signing the blank mutual fund application form overlooking all the term and other hidden clauses; signature mismatch in the redemption form as against the original form; documentary insufficiency; non-compliance with KYC requirements that require updation of address and other details with the fund house. While these are some of the common mistakes on the part of the investor, some errors on the part of mutual fund distributors can also make your task hard.

And like there is a solution to every problem, these errors can also be rectified provided you know how to go about it and whom to follow up with in the course. So, for your assistance here is provided ways to solve some such commonly faced situations by the investors.

Buyer beware clause warns the investor not to entertain the blank form by signing it blindly and handing it over to the distributor or agent. As you never know, such a carelessness can leave you in doldrums.

Signature mismatch: In case redemption is getting rejected either due to discrepancy in name or signatures: When you are faced with a situation wherein your redemption plea gets rejected on account of signature or name mismatch, you need to submit the attested and validated copy of your signatures (bank through which the investment is exercised can be approached for the validation). The problem is seen only in case the investment is made through the offline route.

Name mismatch: Name mismatch also results in delay in the realization of the mutual fund proceeds, as in such a case when name in the bank account differs from that specified in the folio, bank do not credits the proceeds into the account and instead issue a cheque.

The discrepancy can however be resolved by contacting the customer service dept. of the fund house and placing written request for the same. Some documentary proofs have to submitted as part of procedural requirements that include notification in a government gazette, attested copy validated by the bank manager that confirms the name of the investor, signature, branch and account number. Also other legal proofs can also be required on case to case basis. Further, in case when the mistake is from the side of the investor, other documentary proofs are also to be submitted. List of all such documents are mutual fund account statement, photo ID proof, a blank cheque bearing the investor's name and an indemnity bond. Know, how maintaining mutual funds in demat account is different from maintaining them in statement of account?

Nominee not provided: In case no nominee for the claim is provided and the investor during the course of the investment dies, authorized claimant has to provide a document that clearly illicits the relationship of the folio holder with the claimant together with the legal heir certificate.

Nonetheless, further for any queries and grievances, you can always approach your fund house, asset management company at the ground level. And in the case, when problem is not resolved at their end AFMI, SEBI and for any bank related issue-banking ombudsman.

Story first published: Monday, April 7, 2014, 14:48 [IST]
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