| Mutual funds are fast becoming the most preferred | | | | investment objectives of the investor. Also, in most |
| investment portfolio for many prospective investors. | | | | banks, there are no capable financial advisors providing |
| Before opting to invest in a fund, it is always better to | | | | much information about the funds and their |
| know about different companies selling them and the | | | | advantages to customers. |
| fee they charge for their services. | | | | Stock brokers and investment advisors: One should |
| Insurance companies: Insurance companies should be | | | | approach these groups with caution. Some of these |
| the least considered option while buying a mutual fund. | | | | people tend to sell the funds loaded with heavy entry |
| In most cases, insurance companies never sell this | | | | or exit costs. Even if an investment advisor offers a |
| type of fund directly. They often combine the benefits | | | | no-load fund, he charges heavy fees for his financial |
| of a mutual fund along with certain other products. | | | | service. |
| These combinations are offered to customers in the | | | | Discount stock brokers: These people are one good |
| form of unit-linked products. Another disadvantage of | | | | source of buying these types of funds. This is |
| buying such products from an insurance company is | | | | because, these brokers are registered with different |
| the sales load that these funds carry. A sales load can | | | | mutual fund companies and offer a wide variety of |
| be defined as the fund commission paid to brokers. | | | | fund options to investors without any load. Discounted |
| This can range from 4 to 8 percent. | | | | stock brokers are primarily preferred more than mutual |
| Banks: Another unfavorable place for buying fund is a | | | | fund companies due to their value of expertise in this |
| bank. Disadvantages of buying a fund from a bank are | | | | sector and also the advice they offer to customers |
| the same as they are with insurance companies. Even | | | | are usually based on their investment needs. |
| banks prefer to sell the funds in the form of loaded | | | | Mutual fund companies: These should be the most |
| funds. Investors either need to bear the entry load or | | | | preferred source of buying a fund. These companies |
| the exit load. Another disadvantage is that banks do | | | | do not charge any transaction charges to customers |
| not offer much variety keeping in consideration the | | | | who approach them directly. |