Invest only a small portion in mutual funds through Paytm or WhatsApp

Investing in mutual funds is getting easier by the day. Paytm Money will soon enter the mutual fund distribution and claims that investors can make much more — as much as 150 basis points — by investing in direct plans through its app. Another private player, Wishfin, has recently started facilitating investments in mutual fund schemes through Whatsapp.

Investors who want to take the Whatsapp route can buy a mutual fund just by giving a missed call to 8447782222 to start their systematic investment plan (SIP). To verify a customer, Wishfin will ask questions through chat from their verified business Whatsapp number and seek documents like the Permanent Account Number (PAN) or Aadhaar for KYC verification. 

While both these players offer the option of investing through the SIP route — the preferred way of investing in mutual funds — their offers are different. “Paytm has an app interface whereas buying mutual fund via Whatsapp is through the chat interface. Whatsapp has more penetration when Paytm is like any mobile-app that allows MF transactions,” says Rishi Mehra, founder of Wishfin.

What is interesting is that Paytm will only offer the “direct” plan route, and hence investors can expect to earn more returns, but they will have to select from the schemes themselves. Paytm has tied up with 8-10 asset management companies and showcase their equity, debt and other schemes. Wishfin is offering only “regular” mutual fund schemes, meaning investors will be paying a commission. However, Wishfin’s offers are more concentrated. There is a choice of three financial goals — tax saving, short-term saving, and long-term wealth creation. Under each goal, there are three funds available from where you can select your choice of funds. Mehra says they will have 10-12 fund choices for investors in the future. 

The Paytm Money app will be a free one. The app will also be providing portfolio services to its investors. Investors will be able to track and manage their money and can view details of their investment through this app. After starting investing through WhatsApp, they will also be able to track the performance of their schemes on its website, using the login credentials provided by Wishfin. Experts say investing in MFs through Paytm and WhatsApp will mostly attract young adults and tech-savvy individuals. But with buying mutual funds becoming easy, the choosing of the right fund is essential. Investors should be aware of what kind of fund they are choosing and what suits them.

“The Securities and Exchange Board of India has done a big change towards product standardisation. This will help in further making MF a ‘me too’ product. Hence, transaction platforms will help mutual fund companies to make their product available directly to the consumer using modern technology,” says Tanwir Alam, founder, Fincart.

However, selecting different mutual fund schemes could be challenging for investors. “Consumers will have to use different mutual fund platforms to transact for different mutual fund schemes. To overcome the challenge, they might have to pick a good distributor or advisor’s platform where they can transact across all mutual funds under one window,” adds Alam. For ones who want to use these platforms, start small and see how it works out.