Where to buy mutual funds

Mutual funds are fast becoming the investment portfolio of choice for many potential investors. Before choosing to invest in a fund, it is always best to know the different companies that sell them and the fee they charge for their services.

Insurance Companies – Insurance companies should be the least considered option when buying a mutual fund. In most cases, insurance companies never sell these types of funds directly. They often combine the benefits of a mutual fund together with certain other products. These combinations are offered to customers in the form of unit-linked products. Another disadvantage of purchasing such products from an insurance company is the sales burden associated with these funds. A sales charge can be defined as the fund’s commission paid to brokers. This can range from 4 to 8 percent.

Banks: Another unfavorable place to buy funds is a bank. The disadvantages of buying a fund from a bank are the same as those from insurance companies. Even banks prefer to sell the funds in the form of loaded funds. The inverters must bear the input load or the output load. Another disadvantage is that banks do not offer much variety considering the investment objectives of the investor. Also, in most banks, there are not trained financial advisers who provide a lot of information about the funds and their benefits to clients.

Stock brokers and investment advisers – One should approach these groups with caution. Some of these people tend to sell the funds loaded with high entry or exit costs. Even if an investment advisor offers a fund free of charge, they charge high fees for their financial service.

Discount Stock Brokers – These folks are a good source for purchasing these types of funds. This is because these brokers are registered with different mutual fund companies and offer a wide variety of fund options to investors without any charge. Discount brokers are primarily preferred over mutual fund companies because of their value of experience in this sector and also the advice they offer to clients is generally based on their investment needs.

Mutual Fund Companies – These should be the preferred source for buying a fund. These companies do not charge any transaction fees to customers who approach them directly.

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