How To Ensure That Your Clients Read Mutual Fund Account Statements Correctly

“I abhor paper-work”.

“I hate numbers”.

“I resist account statements and never wish to read the same”.

Investment advisors and money managers often hear these statements from their clients as many investors actually live in this fear. They abhor the paper work and formalities. Especially the YOLO (believers of you live only once philosophy) generation prefers everything that is clickable and tapeable. Unfortunately, with this attitude they eventually end up having either no or less savings

Additionally, investors might be worried about market swings. Those who have experienced how stock markets work would be accustomed to market swings. Yet, the market has the tendency to surprise even the most experienced traders and investors. Equity markets can undergo bouts of strong trends in either direction or even remain directionless for days and even months. 

Sometimes such fears are deep-rooted and you need to overcome them gradually. And for that you need right education.

During uncertain times, investors are eager to know how their mutual fund investments have performed. Whether the performance drifted with the market tide or went against it. Many investors may not be very tech-savvy to use online portfolio tracking services and some may avoid using them due to privacy issues. For them, requesting for a mutual fund statement is the easiest way to keep a track of their investments.

Thus, it is a Certified Financial Guardian’s duty to coach and create awareness amongst its clients on how they can track their investments.

We have explained in detail of how you and your clients can read the respective account statement with utmost simplicity.

Before we begin with that, let us look at how one can generate the mutual fund account statement:

As you might be aware, one can request a statement for specific mutual fund accounts from the fund house directly or even request for a Consolidated Account Statement (CAS) from the registrar or a Depository. The CAS gives a holistic view of all your holdings. 

Yes, you can request for an account statement at any time and it will be delivered by e-mail to your inbox in a few hours. There are different routes through which you can request a CAS.

Depending on your type of holding, you can request for a statement as mentioned below.

→ Physical or Non-Demat holding If you hold Mutual Fund Units in physical form, which are represented by a Statement of Account (SoA), you can request for a CAS as below.  Computer Age Management Services (CAMS) – Consolidated Account Statement – CAMS + Karvy + FTAMIL + SBFS 

Karvy Computershare – Consolidated Account Statement  Mutual Funds held specifically in SoA form and linked by a common email address will be consolidated. Ensure that your correct email id is registered with the respective mutual fund folios. You have the option to request for a summary statement or a detailed transaction statement for a defined period. If you require the statement only of a specific fund house, you can send a request to the fund house directly.

Partial or Fully Demat Holding If a part or entire of your mutual holdings is in demat form, you can request for a CAS from the Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL). Through this CAS, holdings in demat account(s) held with NSDL and CDSL as well as in units of Mutual Funds held in the Statement of Account (SOA) form will be consolidated. If you have made any transactions, the depository will send the monthly statement to your email address in the following month. You can also request for a statement by accessing the links below:

CDSL – https://www.cdslindia.com/cas/logincas.aspx 

NSDL – https://nsdlcas.nsdl.com/ 

Here, the accounts that reflect a common Permanent Account Number (PAN) are consolidated.

Both statements will give you a summary of your holdings and details of transactions, if any. If you are investing in stocks as well, the CAS from either depository will give you a wider picture of your holdings. Now that you know how to access the CAS for mutual fund investments, let’s delve deeper into how to read the statements. CAS received from CAMS/Karvy A summary statement is straightforward. Along with the personal details at the beginning, the statement provides a list of your current holdings. You will get the unit balance and the latest market value of your investments. 

CAS-CAMS

(Source: CAMS Consolidated Statement, PersonalFN Research)

The transaction statement is a bit more detailed. It will summarise all purchase or redemptions made in a specified period. Whether you have made one-time purchases or if you are investing via a Systematic Investment Plan (SIP), it will reflect here. Along with the cost of purchase, it provides the current market value, using which you can calculate the performance of your investment/s.
CAS-CAMS-2

(Source: CAMS Consolidated Statement, PersonalFN Research)

Apart from financial transactions, this statement also keeps a record of all non-financial updates on your account as well. In case you have changed bank details, updated a nominee, or corrected your address, such revisions will be updated in this statement.  Apart from this, any change in load criteria is mentioned under the transaction summary for every scheme. Beside the scheme name, the ARN code of the distributor is also mentioned. This can be helpful when you may have purchased funds through multiple distributors or an advisor.  Pay special attention to the below parameters in the statement –   

  • Folio number –It is a unique number that has been assigned to your investments made with the mutual fund house. Most mutual funds offer one folio number for all investments. Thus, if you intend to make further investments with the same fund house, ideally you should mention the folio number allotted to you earlier.
  • Fund name and option – It is vital to check whether your account statement correctly mentions the mutual fund scheme (along with the option – i.e. dividend or growth ) you opted for. This is essential because your mutual fund account statement may reveal a different mutual fund scheme or an option. In case if you find any discrepancies, you need to bring it to notice of your mutual fund distributor / agent / relationship manager, or even write to the mutual fund house for a corrective course of action.  
  • Transaction summary –This section of your mutual fund account statement reveals the transactions that have been done with the fund house. So say, in case you have opted for SIP mode of investing or a Systematic Withdrawal Plan (SWP) for redemptions;; your future account statements would reveal these transactions (date wise), along with the other details such as NAV and number of units. Similarly, if you have opted for the dividend payout or reinvestment option (instead of growth), it would reveal the value of the dividend declared along with how they have been.   
  • Current cost and market value –The current cost refers to the investment amount, which enables you to obtain “xx” number of units at an “xx” value of NAV The market value mentioned in your mutual fund account statement helps in assessing the value of your investments as the date on which the mutual fund statement is generated. So, it will reveal whether from the date of investment to the date the statement of account wealth creation or wealth erosion has occurred.

CAS received from CDSL/NSDL
CDSL

(Source: CDSL Consolidated Statement, PersonalFN Research)

In this eCAS from CDSL or NSDL, you will get a summary as well as a detailed view of your holdings. The summary page will list all your holdings across stocks and mutual funds. Here you will be able to view the latest value of your holdings. In addition to the current valuation, the summary statement mentions the ‘Cumulative Amount Invested’. This includes the sum of all one-time and regular investments via a Systematic Investment Plan (SIP), net of any redemption.  Further, you will get details of any transactions made over the period.

  
CDSL-2

(Source: CDSL Consolidated Statement, PersonalFN Research)

While the transaction statement looks different from that received from CAMS or Karvy, it provides the same set of information. The exit load details for all schemes are mentioned at the end of the transaction report. Remember, it is your client’s hard-earned money, which means you need to ensure that they understand the mutual fund account statement and scheme details. By doing this you will then be the real guardian for your clients.

If there is any discrepancy, do not hesitate to contact the customer service helpline of respective fund house. Always ensure that your client and his/her financial needs and goals come first.

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