How to choose the right online platform for MF investing?

When it comes to investing in mutual funds, online platforms are catching a lot of traction. In fact, this was more evident during the pandemic-led lockdown, where it was quite difficult to invest in mutual funds in a traditional format. Although, most people have moved online for their investment needs either via a mutual fund distributor (MFD) or a registered investment adviser (RIA) or Robo-advisory. However, still, most investors struggle with choosing the right platform for them. In this article, we will list down a few attributes that you should look at before choosing an online platform for your mutual fund investment needs. Having said, this is not a review of any online platform but instead, just a guide that will help you in choosing the right one. 

‘Free’ label 

These days, there are tonnes of online platforms that tout themselves to provide you mutual fund investment service free of cost. However, we would urge you to not choose a platform just because it’s free. Though the cost is one of the factors that you should consider but selecting a platform solely due to its lower cost or because it is free, might make you regret it later. The revenue model is something that you should focus on. If any platform is not charging you for mutual fund investments, then you can comfortably believe that they would be either earning from cross-selling other products like insurance, which might be providing them higher margin than mutual funds or services such as financial planning or portfolio management. However, those platforms that offer regular plans are the exception as by regulations, they can’t charge you anything apart from the commissions that they might be earning. 

Quick onboarding 

Quick onboarding often helps you to get started at the earliest. Though there is not a big difference if you get onboarded in 30 minutes or even two days. However, if it takes weeks or months, then surely, the platform is not quite efficient and is likely to take higher time to even solve your queries. Therefore, do look for the time it takes for the platform to onboard you and get started. 

Feature loaded 

Whatever platform you choose, even if they are not offering a fancy user interface that is fine, but it should offer you a full range of mutual fund services with a minimal technical glitch. Check if your platform is offering a few of these services such as lumpsum, systematic investment plan (SIP), switching, redemptions, systematic transfer plan (STP), systematic withdrawal plans (SWP), etc. Make sure your platform has all of them. 

All the funds 

There are a few platforms that offer selected funds or even have a tie-up with select fund houses. However, this can have an impact on your investment decisions. Say, for instance, you wish to switch to another fund, but the same is not available on your platform. This will either lead you to buy it out of the platform or choose another fund that the platform offers. We have even come across such platforms that do not offer index funds. Hence, while choosing a platform, ensure that they offer maximum funds from almost all the fund houses.  

Goal planner 

Though not fancy, the platform must at least offer you a basic goal planner along with a facility to map your investments with those financial goals. This will ensure that you are investing in the right manner and also, help you to understand the purpose of your investment. Not to forget to check for a risk-profiler as well. These days, almost all platforms have this feature. However, still before opting for any platform, ensure that they have a risk-profiler that will help you assess your risk appetite. 

Reports 

Having almost all the necessary reports would help you in reviewing your investments. Reports such as investment holdings reports, capital gains reports would help you to understand the capital gains tax that you might need to pay. Hence, you should check whether the platform offers at least these basic reports. 

Support 

Customer support is one of the most important aspects while choosing an investment platform. This is because if the support is strong, then there are high chances of you getting a better service. No matter whether the platform offers free service or not but if the support is not good, it becomes nothing but frustrating. We know investors who stick to the platform just because of their quality of support, even if they are charging them a little high.