How to keep in touch with your fund

Why bother to track your mutual funds (MF) once you’ve invested in them? You’d think it is your fund manager’s job to manage your money since he charges a fee from you for that. That’s true, but at the very least you must know the names of fund houses and schemes where you have invested. That may be a given to most of us, but you’d be surprised to know that many forget where they had invested their money and many don’t keep records of their investment.

Let’s look at the different ways you could get out of touch with your MF investments and how to get in touch with them again.

Losing touch

Scheme or fund house changes name: In 2011, when Rajkot-based Nitin Soni, 25, tried to dig up the records of a scheme he had invested in four years ago, he was lost. “I scanned the newspapers but could not trace any detail about my scheme or my fund house. I wanted to know the number of units that I had and my scheme’s latest net asset value; I kept going round in circles.” said Soni.

It turned out that he had invested in the erstwhile ABN AMRO​ Asset Management (India) Ltd that changed its name to Fortis Investment Management (India) Pvt. Ltd in November 2008 and eventually to BNP Paribas Asset Management India Ltd in October 2010. Both the name changes took place because the fund house’s international parent got acquired—on two separate occasions—by other foreign groups. So first it was a consortium of The Royal Bank of Scotland Group Plc, Fortis SA/NV and Banco Santander SA that acquired ABN AMRO. Later, BNP Paribas SA and a Belgium government owned company jointly acquired Fortis Bank SA/NV and the name of the Indian AMC changed, yet again, to BNP Paribas AMC.

Soni, obviously, had not kept a track of it nor did he keep an account of the communication sent to him by the fund house, presumably on both the occasions. Says Hiren Dhakan, associate fund manager, Bonanza Portfolio Ltd, a Mumbai-based financial services firm: “Name changes in the MF industry are very common. If the investor is unaware of this, it can be a nightmare for him to trace it without the help of an MF agent or a financial planner. Also, small-time agents may not be savvy enough to dig out this information as some of them may have just washed their hands of the scheme after pocketing their sales commissions.”

What should you do? Typically, names of MF schemes change when either their fund house is acquired by another fund house or when two or more schemes are merged. Whenever such a change happens, your fund house would send you a letter offering a grace period, usually a month’s time, to exit the fund house without paying an exit load, if any, if you do not subscribe to the change.

• Make sure you keep a track of such letters. If you choose to stay invested. All your future new account statements will reflect the changed name.

• If you come across your old investment certificates or account statements and can’t trace the name of the scheme, hit the Internet. More often than not, you should get some information about it that’ll help you trace it.

• If you don’t find success, get in touch with large-sized registrar and transfer agents (R&T; a fund house’s back office and record keepers) such as Computer Age Management Services Ltd (Cams), Karvy Computershare Ltd, Sundaram and BNP Paribas Fund Services. Instead of approaching 45 fund houses, it’s better approaching a few R&Ts.

• If you know an MF agent, request him to do some digging around.

Not updating your address: This one affects many of us. We migrate to large cities in search for better jobs. We stick around, grind it out for a few years and then we get offered a job in another city and we move. But our investments don’t follow us as we fail to inform our fund houses. As a result, our account statements keep reaching our old address. 

What should you do? 

If you are compliant with the know-your-client (KYC) norms, it’s very convenient to get your address changed. All you need to do is update your KYC records. Effective 1 January 2011, KYC has been made compulsory, irrespective of the amount you invest in an MF. Earlier, KYC was required only for investments worth at least Rs. 50,000.

• Visit www.cvlindia.com, the website of CDSL Ventures Ltd, a division of Central Depository Services (India) Ltd (CDSL), the nodal agency appointed to do KYC for MF investors.

• Under its “download” section, download the “KYC detail change” form, fill it, attach proof of your new address, your Permanent Account Number (PAN) card copy and visit any of the points of sale (PoS) terminals of CVL India.

• The list of PoS terminals is on the CVL’s website. Says Srinivas Jain, chief marketing officer, SBI Funds Management: “Most mutual funds are also PoS centres. Even if you are not a particular MF’s investor, you can still approach that fund house’s PoS and submit your request. We’ll do the needful.”

• Once CVL does your KYC change, it puts up the status on its website. On KYC’s website, click the link that says “Inquiry on KYC”. Submit your PAN and you get to see the date as on which the latest update (your address change request) has been affected.

• A senior fund house official told us on condition of anonymity that once the records get updated, fund houses send a letter to the investor at the new and the old addresses, informing about the change.

• But not all are lucky. Says Srikanth Meenakshi, director, FundsIndia.com, an Internet platform to buy and sell funds: “I had submitted my own KYC request change in August 2009; I had originally applied for it in July 2008. My KYC change was done but the CVL website doesn’t reflect the change.”

• Keep an eye on CVL’s website. If you don’t get to see the updated records, call up your fund house and check.

Not saving your account statements: Saving account statements is important as it helps you track your investments. The problem gets heightened in cases of investors who buy MFs purely from the point of saving taxes and invest in equity-linked saving schemes (ELSS) once a year and then forgetting about it. ELSS are equity-diversified schemes that offer tax deduction benefits under section 80C and come with a three-year lock-in period. “Due to the lock-in, people don’t bother to check their investments in the interim thinking that they wouldn’t be able to withdraw in any case,” says Dhakan. Bangalore-based financial planner Anil Rego says that not just do-it-yourself investors, but even some of his own clients forget about their investments. “They’d say ‘my financial planner is there, so why should I bother’.”

What should you do? Cams told us that they can dig out investors’ past records by using their PAN, if they have one. For investors who don’t have a PAN, typically R&Ts use two parameters, namely, first holder’s name, city and/or postal index number code. 

Keep in touch

Register your email address: One of the best ways to keep in touch with your MF investments is to register your email address with your fund house. Assuming your PAN is already registered, fund houses can send you account statements over email. Recently, Cams, Karvy and Franklin Templeton International Services (India) Ltd came together to give consolidated account statement across fund houses supported by either of these R&Ts.

Here as well, if you have a PAN and email (registered with fund houses at the time you had invested), then you can get a consolidated account statement (one statement of all your holdings across all fund houses serviced by these three R&Ts) over email.

How to register your email? The key is to register your email at the time of investing and filling the application form. If you haven’t done already, there is a way out. R&Ts like Cams provide a form (PAN-based service form) with a request to update email addresses.

Once you submit this form to the R&Ts, it will update all your folios (carrying your PAN as the first account holder) with your email address. Do this with all R&Ts that your fund house is attached to.

Rules on consolidated account statements: In a circular dated 8 September, the Securities and Exchange Board of India asked fund houses to issue consolidated statements. What Cams and Karvy are doing at present will now be replicated across the industry.

As per the new rules, you will get a consolidated account statement across all the folios where you have transacted, across all the fund houses. Even if you transact in different fund houses and those managed by different R&Ts, you will get all the details in a single statement. In folios where there is no activity, you will get account statements once in six months. 

Source: http://www.livemint.com/2011/10/04211507/How-to-keep-in-touch-with-your.html