Mutual funds stalling redemptions…
When you went to redeem your units did you get a feeling that they were trying to stall your redemption?
3 mails which I had received made me sit up and think. Is there a pattern, I am not sure. However even when i have attempted redemption I have got the following reactions:
– You will have to get the signature of ALL the holders (holding Either or Survivor)
– for a change in bank account number you have to give us a separate letter. – this is particularly surprising because they have a form which says if there is a change in the bank account please fill in this form.
– signature difference (ho ha – have been using this signature for a very long time)
– Cannot do a direct credit because the bank is not in Core banking. Will courier the cheque.
Not sure which of these excuses are genuine – some look genuine. However most of these ‘impediments’ are by a couple of mutual funds who are not sure why money is leaving them. Whether this is an attempt to delay am not sure.
Would be happy to get feedback on this…your feelings are important 🙂
Pramod Kumar
Subra,
It may be the experience of some of the people but I would say that often we do not do our part and then crib about the system. May be the ones who are suffering are paying the price of ignorance. I have redeemed my funds from Tata, JM, HDFC, Reliance,ICICI,SBI and Sundaram at various stages in last 6 years and not even a single time the payment got delayed over the promised 3 days. I have used forms at AMC & at Karvy & Online resources but everytime the amount is credited smoothly into my account. I have never seen the guy at their office looking at my signs on the redemption form forget about mathing.
Maku
you read my mind. And i have got some more responses too
– We never got any request for redemption. Can you resend the same pls ?
– Redemption sent with updated bank details, cheque sent as per the old bank details (huh!! now what ? resend the cheque as the account was closed and followup for a month)
Milind
online purchase and redemption of Mutual Funds is very convenient and hassle free.. only initial registration requires paperwork and hence it resolves most of the issues you have mentioned.
CAMS helpline and website is also very useful
I have done online fund purchase and sell with HDFC MF, SBI MF, Birla Sun Life and I more than satisfied..
Same would be the case with other fund houses but I am yet to try them
Srikanth
Of course, if you invest through an online channel, many of these problems would, by definition, not be there 🙂
subra
Pramod,
Not sure if you are just an investor or an agent. In my case if there is a hitch in redemption, I can call all the CEOs of the funds in which I invest, SO I WILL NEVER have a PERSONAL problem. However not all the lay investors can do that. I remember my cousin trying to redeem Rs. 10k – without a nomination – from Tata Mutual fund and it was not easy. When another cousin died, EVEN where there was a nominee, they asked for lot more documentation than what a life insurance company asked. I do not think this country is anywhere near customer friendly – think of the not very resourceful, not very knowledgeable customer. Must tell you one bank RM told a customer – ‘Sir this is TDS, you will not understand’, just because the customer was a senior citizen. The senior citizen was an ex DIRECTOR FINANCE of a HUGE group who had friends like Deepak Parekh, Vaghul, and Kampani. L O L, because the senior citizen did that and told me the story. If he had raised a finger that RM would have lost his job.
I have done this story because NO MEDIA COMPANY WANTS TO BUG ANY MF. REALLY SAD.
Puneet Gupta
I also see a trend here (although different kind of)…
I see that Subra is becoming more and more pro Life Insurance Company guy now…and bashing Mutual Fund Houses..
What’s going on Subra?
USV
I faced similar mentioned issues while redeeming my units from ICICI but other AMC’s were quit good
rrp
– I use online hdfc bank site linked directly to hdfc bank a/c. Never had a problem. Buy/Redemption was smooth all the time from hdfc/reliance/sundaram/dsp BR. I am more than satisfied, very convenient. No paper filling, no cheques ..
– Esp the 1st 2 reasons look genuine only. (otherwise some party can do fraud exploiting the loopholes)
Venshu
I live in Bahrain and use ICICI Direct Platform to invest in mutual funds. Both investing and redeeming have never been a problem. The funds always get credited to my account in T+2(working) days.
I agree with Puneet – a few posts in the recent past from our dear Subra are with a ‘negative bias’ towards the mutual fund houses!!
DM
After reading thru lots of blogs by Subra , i also agree with fellow blog readers that the blogs are getting biased and anti-MF .. bt nonetheless i would req subra to address real issues relevant for the common man than MF vs ULIP ones..Lets wait guys.. something interesting may come from Subra 🙂
P.s I have done lots of subs and redemps with MFs and have never faced problem with offline or online channel
subra
I am neither for the managed funds industry (both mf and life insurance) nor against it. Have friends in both, know about the tricks of both. When I do training for a bank in wealth management I know what Relationship Managers have to go through….
Also too much is being made out of MF vs. ULIP – completely blown over by media. Like doing a Sachin vs. Sunil Gavaskar – who was better. People can invest in both – they are completely different.
Venshu
I agree with Subra’s comments above. The investors alone should decide where they want to invest – MFs or ULIPs. However, both MFs and ULIPs should not be allowed to missell and should be punished if they do so.
AB
The most convenient excuse is that the signature is not matching. I have faced it 2-3 times for the same request although there was no difference. Very frustrating experience. Moving to online account now. hope the experience would be better there.
Param
I think customer service is great when everything is fine, but if there is a simple hitch, things go out of control. I do agree that a knowledgable investor who knows how to google & find e-mails of right persons can get things moving much faster. In most cases, I have noticed that the banks/distributors are more incompetent compared to Mutual Funds. 2 cases of redemption:
a. HDFC MF – invested in Liq Fund thru ICICI Direct – with bank account in ICICI Bank. Redemption submitted thru ICICI Direct, proceeds did not reach within 2-3 days. Contacted ICICI Direct, they said contact Bank, Bank said contact MF, MF said contact ICICI Direct. Finally dug up the mail-id of right person in HDFC MF – they identified the problem within 2 hrs. ICICI Direct had opened accounts with slightly different names in MF & Bank. MF sent online redemption proceeds which was rejected by Bank. MF immediately sent a cheque via courier & got out of the mess in 2 days. Of course, dealing with ICICI Direct & Bank to correct the name issue was a 2 month ordeal…
b. Quantum MF – invested in Liq fund online – with bank account in Axis Bank. Same issue on redemption – bank rejected due to slight name mismatch. MF person called me on their own (I was out of town) and informed me about the rejection & told me to coordinate with the bank to fix the name issue or provide another bank account. Since I was not in a position to go to the bank, MF discussed with them & sent the online redemption proceeds again & this time I got the credit without issues. There was a delay of 3-4 days, but a much more pleasant experience.
Moral of the story: Make sure you leave no scope for error. Ensure you use online options to your benefit. Do not assume that Distributor will not make mistakes or correct them. Do not think the bank is on your side. Finally, learn to google right mail-ids.
Raji
Subra,
You are 100% right. Not everyone likes the online route when investing for really long term like retirement etc., The initial enrollment into SIPs using paper work is very customer friendly. They just want us to fill the forms and courier it !!! But, doing any changes later on like changing Bank A/c or redemption is hell. I would say FT is the worst of the lot. HDFC is ok. FT finds some reason or the other to reject your documents for redemption/change 🙁
Srikanth
Param,
In your list of lessons, you missed one important lesson – and this is for the investor –
Try and use one single consistent name across financial institutions when opening accounts. 🙂
Param
Srikanth – Agreed. Not only having a consistent name, but also ensuring the service providers have used the correct name. Most of the forms hand-filled by customers/agents and then typed into system by someone else are prone to this error…
subra
Nice one –
a) we have not been able to process your switch request because both of you have not signed.
b) but it is an either or survivor mode of holding
c) sorry sir, we processed it as a Joint holding 🙂
Puneet Gupta
God save you if you happen to be investing with your wife whose surname changed after marrieage.
Ask me the pain…getting her KYC compliant with new surname is a mess.