Why Is KYC Important for Mutual Fund Investors?

As the link between investors and mutual fund houses and companies which sell other financial products, financial planners and advisors play a very important role. They are the first point of contact that make investors aware of their rights and duties. Often along with fund houses, they conduct financial literacy seminars for existing as well as prospective investors to make them aware of various issues related to investing, which also include the rights of an investor and also the duties of an investor so that the experience of investing remains smooth hassle free.

One of the first things that we insist for all our clients is that they should go for the ‘Anyone or survivor’ option for accounts and also opt for nomination. Such a process ensures that the transition of wealth and investments are smooth in case the main person who is investing incapable to carry of the transaction for any reason.

Updated information in every investors Know Your Customer (KYC) log is also very important. For the last couple of years, Sebi has made KYC compliance much easier and once a KYC data is uploaded with one KYC registration agency, the same is valid for all transactions across all investments regulated by Sebi. Any change in KYC data is also replicated with other KRAs within a few days. 

Financial planners and advisors also make their clients aware of how they need to be regular and disciplined in their approach to investing. 

Another very important aspect to good investing is making a Will. Often it is seen that the investments that the main member in the family had made is completely unknown to the other members in the same family. Having a Will helps solve that kind of problems