The top thing a financial services company must build is a distribution network of agents/advisors. India's biggest service brand, LIC has built it's success on an army of agents and they have close to 14 lakh agents on roll.

So how do you respond to a Mutual Fund company which refuses to pay any commissions to distributors! Quantum Mutual Fund is India’s first and only direct-to-investor mutual fund. On their website they say that the fund does not believe in gathering tons of money, but believes in working for the investor. They have only 4 mutual fund schemes and a fund of funds apart from 2 exchange traded funds.

How does that benefit you?

A fund house that does not follow the distribution route, which means that more of your money is invested, giving you more returns. That's why Quantum Mutual Fund follows the direct-to-investor route.

What is the problem with agents/distributors?

QuantumAMC says, "We have no problem working with distributors and financial planners. 

Our problem is that these fees are generally not transparent, they are not fully disclosed – this means that investors like you may be investing in mutual funds that are not best suited for your needs. The portfolio of mutual funds recommended may be well-suited to the commissions paid to distributors. 

As the investment manager and the asset management company, we build the portfolio and for this we get a fee. Our fees are disclosed. 

The bank that acts as a custodian to all the assets held in the mutual fund for your benefit are also paid a fee. This is also disclosed. 

The registrar and transfer agents look after all the subscriptions and redemptions of the mutual funds and they are paid a fee. This is disclosed. 

When fees are disclosed, we can judge the value of the service provided and decide whether the fees are worth the advice or the service we receive. 

But the distribution channel wants to be treated separately.
By a different set of rules.

Only the distributors know what fees they earn from different mutual funds.
And no one must benchmark their level of advice and service against the fees they earn. 

Our solution to this problem is simple: let every distributor and financial planner bill you for their service. Then you can decide whether their advice is worth it."

We will cover the Quantum AMC's Products in detail very soon. Stay tuned.

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