In general, most investors view mutual fund recommendations with suspicion, because the advice giver is often influenced by the lure of commissions and other monetary rewards. Personal gain dictates advice and this more often than not encourages mis-selling.
Mis-selling typically happens at three levels.
- Inappropriate asset allocation — Certain categories of mutual funds have higher commission components than others. This tempts advice givers to push an investment type which may or may not be in line with his client’s risk profile or needs.
- Recommending NFOs — Closed Ended NFOs (New Fund Offers) typically carry a significantly higher upfront commission. Errant advisors push these NFOs, once again, not necessarily in the client’s best interest.
- Over Investing — Given that commission earnings are percentage based; it’s always in the best interest of a commission earning advice giver to make his client invest more. In absence of proper financial planning, many unsuspecting investors realize only too late that they have been over investing or churning their portfolio too often.
How many of these are applicable to you?
Instead, what if the advice giver had nothing to gain and didn’t earn a single rupee from (a) where you invest (b) how much you invest or © how often you invest?
Wouldn’t the advice be unbiased and more likely be in your best interest?
The Bharosa “Which fund to buy guide” helps investors solve their dilemma by recommending the Top 5 Equity, Ultra Short Term Debt & Tax Saver Funds out of a universe of thousands of funds. As Bharosa is a commission free mutual fund platform, it doesn’t gain from pushing one fund over another. Hence, in the interest of transparency, the guide also lists out concrete reasons for fund selection.
The guide is an endeavour to consistently provide investors with well researched & unbiased advice. Any algorithm is bound to evolve with time and learnings, and we are open to views on how we can improve the algorithm.
The guide should be insightful for first time investors as well as experienced investors, as it helps investors:
- Decide their asset allocation
- With fund selection
- With a list of other top performing funds
- Build an Equity mutual fund portfolio basis their personal characteristics
Get started with transparent investing today!