Mutual funds and the Digital Journey
Getting sound and timely financial advice is always desirable for an investor. However the trend in the last few months has clearly shifted from the advisor meeting you in person or you assigning time on your weekend to your advisor to come to your home, have a cup of tea with you and review your portfolio. Most of us have either adapted to technologies like Zoom, Web-ex, MS Teams, etc either by volition or by necessity in the last few months. Embracing technology to make your life easy and increase efficiency has been the narrative for a while now and it is pretty much staring at your face now. But have you really adapted to technology enough?
Think about it – (going by the common 20-60-20 rule of adaption to change)
Today at L&T Mutual funds we have equipped ourselves to serve our customers on the digital platform where you can invest and redeem online as well as have your service requests executed online. We also strongly believe in empowering our distributors and advisors who are a critical connection between the funds and the customer. Our revamped “Digital Dost” platform empowers our advisors to connect with you, advise you, track your portfolio, give recommendations and thereafter help you with the transactions - all through a digitised journey.
Your Financial Advisor is your partner:
Financial advisors are your partners in the journey of your life goals. If you are busy and do not have the time to manage the detailing of your investment portfolio, the financial advisor does it for you. We are going to be done with half of the financial year this month, and if you have not reviewed and taken stock of your financial asset allocation, we recommend you do it. You have the option of doing the following right from your home:
Not just SIP under the Systematic Umbrella
We also believe that SIP (Systematic Investment Plan) is a great way to invest in the equity markets. It helps in wealth creation over a long horizon of time. While we talk about SIPs a lot, there are also two very useful tools of investment under the “systematic“ umbrella.
Systematic Transfer Plan (STP):
While SIP creates wealth over the long term, it is also important to hedge our risk as we get close to our financial or life goals. For example, when we have built a kitty for our retirement as the financial goal, closer to the goal, it may be prudent to hedge the risk that can be posed by sudden volatility on the markets on our corpus. This is when an STP out of the corpus into a low-risk fund helps in judiciously protect our retirement corpus.
Another way can be to do STP from a debt fund to an equity fund for investors who do not want to invest lumpsum into equity.
Systematic Withdrawal Plan (SWP):
This is a systematic way to look forward to achieving regular cash flows from a corpus in mutual funds. This is also sometimes beautifully used by investors with no regular income who have their corpus created and aim to manage their monthly cash flows through the SWP route. Your corpus still keeps working hard to get you returns as per the fund’s investment objective that you have invested in while taking care of your periodic cash requirements through the SWP mode.
So it may be wise to touch base with your financial advisor to help you take stock of your financial goals. And all this can be done digitally!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.