Investing, and tracking investments, using mobile phones has become very popular in India. In this short article, we look at a possible checklist that helps you evaluate the apps. I would not suggest a particular app – one major reason being that this is a rapidly growing segment and there could be a new app by the time this post appears!
Checklist for mutual fund apps
In a roughly decreasing order of priority, these are the parameters that can be used to evaluate the suitability of a mutual fund app. The same list can also be applied to the mutual fund investment portals.
- Access to direct plans
- Variety of transactions – SIP, lumpsum, transfers, etc.
- Reporting, Portfolio Analysis
- Import of existing investments
- Initial startup
- Investment advice
- Ease of payment
Detailed Checklist for mutual fund apps
- Access to both direct funds and regular funds – This is very critical. There are many distribution driven apps that provide access only to regular plans. I don’t want to argue here why direct plans are better than regular plans. But it is important that you have the choice of both direct plans and regular plans. If the app or portal provides only regular plans, don’t use it.
- Access to a variety of transactions – Many investors have most of their mutual fund investments via SIP. However, it is important to be able to invest a lump sum amount too. The app should also have easy interface for switches, withdrawals, etc. Some apps provide bells and whistles like SIP pause, SIP top-up, etc.
- Reports, Portfolio analysis – The more, the better. The reports are important to track your portfolio, and for the periodic review. There would be constant developments in this area.
- Ability to map your existing portfolio – Many apps provide a way to ‘import’ details of existing investments. This is quite important and makes the third point better.
- Initial startup – This is not as important as the first three, basically because you require this ease only once. Many apps do make the first investment easy. This then sets up the KYC record, linking of bank accounts, etc. However, you need to do this once. If an app eases the start-up and also does the first three items well, then you can choose it.
- Advisory – This is a touchy topic. After the introduction of Paytm Money, many apps have become free even for direct plans. Advisory is expensive and it is not clear how the apps would cover the costs. It would be great if the apps are upfront about the charges for advice. Like reporting, the advisory would also evolve rapidly. Many apps could use robo-advisory to provide comprehensive suggestions at little or no incremental cost.
- Ease of money transfer – The app should be able to support the banks and payment methods that you are likely to use. This is one area where the MF Utility really shines. Most apps provide a similarly comprehensive coverage.