Also, given the low costs associated with app-based investing, even small investors with sums as low as Rs 1,000 per month can start their investment journey. This may not be possible in the off-line world, given the costs.
…but limited horizon
: But these apps have limitations as well. For one, many investing apps limit investment choice by offering just one option, such as a mutual fund or insurance. They often create an environment that would induce investors to opt for the manufacturer’s products and do not offer information about other product categories. Sometimes app owners may provide solutions in line with their views, which may not work for all investors. For example, one may come across an app that gives a particular mutual fund portfolio, which is mid-cap heavy and may not consider other low-risk profiles at all.
Investment advisors feel many apps may be limiting. “Most mobile apps
offer very few asset classes, and hence, investments
would be highly concentrated towards a single asset. For example, a mutual fund investing app would keep the investor in the dark about other products like direct equity, gold ETFs, life insurance, health insurance and Public Provident Fund. This leads to focus on single product-based approach,” says S Sridharan, head, financial planning, Ladder Investment Advisors.
Choose the right app and mix:
A mobile app can be a facilitator in executing investments
in a hassle-free manner. However, it may not always be able to replace a financial advisor or your own judgment since individual investment needs are different. “Don’t jump into a product without knowing the objective. It is advisable to seek help from a financial advisor or go for a platform that provides both advice and execution,” says Sridharan.
Jain advises going for an app that has all the features to help one manage one’s investments
easily instead of one that bombards the investor with unnecessary features and information. “The app should offer superior UI/UX. It should be clean, jargon-free, with very clear user flow. The app must also be fast and bug-free. See if the app offers you all information in a simple and concise manner like easy discoverability of funds, access to educational/help resources etc,” says Jain.
A good app must also allow flexible payment options like UPI, net banking and NEFT. The app must also be transparent in its pricing policy and should not have hidden charges. “You can shortlist a few apps which are rated above 4.5 on the playstore, take a look at the user reviews, try them out and see how seamless on-boarding and navigation are,” says Jain.