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SIP or Lump Sum - Which is a Better Mode of Investment in Mutual Funds?

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 10, 2019 12:38 PM 2 min read

How can you switch your mutual fund distributor? SIP or Lump Sum - Which is a better mode of investment in mutual funds?



Want to switch your mutual fund distributor? Know how. 

This Isn't Working Anymore: Banks in India are one of the largest and most “trusted” financial intermediaries, but are also guilty of a major share of mis-selling cases - especially mis-selling of insurance policies in India and other such third-party products like mutual funds.


As per SEBI data, as of 31st March 20118, there were 107,302 mutual fund distributors in India. The vast majority of mutual fund ‘advisors’ in India are actually distributors of mutual funds, including relationship managers in banks.


It is noteworthy here that a mutual fund distributor is distinct from a SEBI Registered Financial Advisor (RIA) who cannot collect commissions and must instead directly charge you for financial advice. 


Quick Tip: In case you are unsure who your distributor is, you can identify him from the AMFI Registration Number (ARN) that will be mentioned on your mutual fund statement.


Now a mutual fund distributor is ideally expected to gauge a client's overall asset allocation, their financial goals, their risk appetite and accordingly explain the risks invoked in a mutual fund investing. However, if one is not happy with one's mutual fund distributor, one could simply switch by filing a form from AMC websites. One can also switch out of regular plans and move to direct plans (which have no distribution commissions) but this can attract exit load and tax. Livemint

Which is a better investment mode - SIP or Lump Sum.

Extra Crunch: There are two ways to invest in mutual fund—lump-sum or the Systematic Investment Plan (SIP) mode. Here's a beneficial list of pros and cons of both these investment modes. Read more to understand which one might suit your requirement better.


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