Technology seems to be at its best nowadays. Visitors of any Playstore would agree to the wonders Apps can do for you. From your pulse rate to the pulse of the financial markets, Apps are available on every subject. They are created to make life easy and do things that were once the monopoly of experts or artisans; now possible with a variety of Apps. For example, earlier you needed an expert to tell you which mutual fund scheme to invest in. Lately, web-based platforms have reduced our reliance on experts to an extent, as these started offering a list of top rated funds. This substantially reduced our universe of available options, making it simple for you to select the mutual fund scheme right for you. Apps are taking this process one step further.

Advantages of using Smartphone Apps for investing in mutual funds...

Genext Apps not only offer you recommendations on the mutual fund schemes you should invest in and along with that, they allow you to analyse and compare schemes based on various parameters. Moreover, they facilitate transactions, more importantly in paperless form, that too within few minutes of you downloading an App. Even the tedious process of Know Your Client (KYC) can be completed just using your smartphone.

Some Apps offer Value Added Services such as cash flow management and financial budgeting. In the recent times, these robo Apps have proliferated, and a whole host of new ones will hit the market in the future. Therefore, it is important for you to understand which App is better for you. Well, you might get attracted to relying only on reviews and star ratings, but that approach won't assist you every time. As a smart investor, you should know how to segregate a fantastic App from an ordinary one.

 

Things you should look for in an App that enables you to invest in mutual funds...

1. First, try to understand how the App provider wants to earn money for itself. Its monetisation model will tell you how biased or unbiased the scheme recommendations are. Those who don't charge any fees but earn only through commissions won't allow you to invest in direct plans. Direct plans help you save costs in the long run. Moreover, how unbiased would their recommendations be? It does raise questions though they might claim to be unbiased.


2. Some App providers might list down their criteria to recommend specific mutual fund schemes. Do read all the provided as that will help you understand how in-depth the analysis would be.


3. Background of the App provider also matters. If it's just a Financial Technology (Fintch) entity, then its research is mostly based on number crunching and may lack qualitative analysis of available schemes. Qualitative parameters are equally important as quantitative parameters.


4. Be wary of Apps that highlight or recommend schemes based on recent performance. Like such schemes, even these Apps may not be reliable.


5. When you download and use any App, you give limited access to data stored on your phone. However, when you use Apps to invest in mutual funds, you provide additional personal information to the app provider. Therefore, before you use Apps to invest in mutual funds, read the privacy policy of the App carefully and get a clear idea about the in-built safety measures, if any.

 

PersonalFN is of the view that basics of investing in mutual fund schemes remain the same, irrespective of whether you invest through smartphone Apps or any other robo investing platform. You should invest in mutual funds congruent to your financial goals. The Apps might provide you with a convenience to perform transactions, however unless you are sure of the quality of funds you are investing in, refrain from using Mutual Fund Apps.

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