Why MF agent always insist on NFO?

When I went to a leading Pvt sector bank, they first offered me on ULIP & then a NFO of Mutual Fund when I shown some interest in investing. Why banks & MF agent insist on NFO & not old trusted funds.

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6 Replies to “Why MF agent always insist on NFO?”

  1. dear please it is understood and not for asking to any one Cos here all are in same boat! so avoid such clarification and do at your risk by taking self mind operation…..
    and many time NFO open with good NAV then PL. exit prompt from it and en cash ST profit if any.

  2. Good observation you have made there. Banks/agents will mostly insist upon NFO than the existing offers. The mystery behind is that existing fund subscription gives 2.00/ 2.50 % commission . Whereas in NFO the MF companies give nearly 6.00 % commissions.

    Agents misguide you saying that NFO is available at NAV Rs.10-00 comparing to the exiting funds where NAV is anywhere from Rs. 25-00 to Rs.250-00. But please dont get fooled by NAV. NAV is not equal to share price.

    Be careful with so called professional advisor, I have burnt my fingers in such NFO and has learnt the lesson hardway.

    Do your reserach . Happy investing!!

    Read following articles for better understanding.
    1. Invest in the mutual fund, not its NAV
    2. 5 common investment myths

  3. I envy your decision of avoiding investment in a new fund over to a well performed/trusted fund. Agents/Banks/Brokers insist on NFO due to their earning of higher commission than existing Funds.
    Be wise and invest wisely.

  4. Its simple–They get more commission so they tell you to invest in NFO. Even large banks do it. Then they tell you to withdraw from here & invest in another NFO. This is commission game.

    So invest after going through the past performance of good funds

    valueresearchonline.com is the best site you can refer.

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