top of page
  • Basis

Why relationships should be more like mutual funds

Updated: Jun 9, 2020

Rewarding and reliable, mutual funds are the darlings of the investment industry. And, with regulatory authorities adding more safeguards for consumers, the romance will only grow deeper. 

Remember those whirlwind crushes from high school? If mutual funds could be compared to relationships, they’d be nothing like those hormone-fueled misadventures. Instead, they’d be the mature, nurturing partnerships your mom would approve of.  Think about it:

They only get better with time:

Looking for a long term investment with progressively increasing rewards? Mutual funds are one of the best options in the market.

They are a stabilising force:

If financial stability is your goal (whose isn’t?), mutual funds should be an essential part of your toolkit. They’re versatile, relatively safe, and can be tailored to meet your needs, whether it’s a retirement fund or a college fund for your child. 

Commitment is rewarded:

The frequency of one’s investment is as important as the amount. Even investing a small amount on a regular basis can become a sustained method of wealth creation. And that’s just the start. Choosing a mutual fund advisor’s no different from choosing a partner.

After the Securities and Exchange Board of India (SEBI) issued a new set of regulations for Registered Investment Advisors (RIAs), financial consultants have become more qualified and committed to the growth of a client’s investment portfolio. Here’s why: 

They have to be exclusive:

SEBI has drawn a clear distinction between distributors (third-party consultants who sell mutual funds for various companies) and RIAs (financial planners who work on behalf of the client). Distributors can promote one mutual fund instead of another in exchange for a commission, and so might not always choose the fund that’s best for the client. RIAs, on the other hand, always put the client first and place advisory and responsibility above all else.

Registered Investment Advisors (RIAs) like Basis prioritise the client’s interest and goals.

They must be as invested as you in the relationship:

Distributors make money from fees paid by clients as well as commissions and incentives offered by mutual fund companies. RIAs charge clients based on the services they provide them and so work doubly hard in the best interest of the client. 

They should bring something to the table:

RIAs have to be certified based on education and experience, so that you’re assured of qualified, up-to-date advice and information while making your investment decisions. RIAs also adhere to more rigorous compliance standards. 

They must be accountable:

RIAs have to maintain detailed records and do thorough checks before making recommendations on investment avenues. SEBI is trying to reorganise the investment industry on a fiduciary-based model, which puts the client first and offers conflict-free advice. As a licensed RIA, Basis is already at the forefront of this change.

The fiduciary model doesn’t just make our services more transparent, but also more tailored; as a company that powers personal finance for women, our USP is customised investment plans that help you achieve your unique goals. And mutual funds play an important part in this effort, for all the right reasons. 

So, when are you getting this relationship going?

#MutualFunds #RIA

bottom of page