As a distributor, FundsIndia gets a commission from the Mutual Fund company for every investment you make on their site. Not just for the first year, but throughout the life time of your investment. Where does the commission money come from?
The Mutual Fund passes the commission fees onto the investor, that’s you my friend, as higher expense ratio. If you don’t believe us then look up the “Direct Plan” option for any fund that you have bought through FundsIndia. It will have considerably lower expense ratio – up to 1.5% lower. So the “free for life account with no hidden charges” is completely false advertising.
Free is not free here – it is the most expensive way to invest. Sounds crazy that they can advertise it as a free-for-life-account.
We, at Kuvera, have started a petition to SEBI to stop such false advertising. We request SEBI to make it mandatory for distributors to correctly identify the cost of commissions on their websites as it directly affects the investors returns. Please sign the petition here and help improve commission transparency in the Indian Mutual Fund.
Disclaimer: Views expressed are authors and not of NextBigWhat.
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