If any investor makes Investment in any Mutual Fund Scheme, in India, through broker it attracts entry load normally @ 2.25%. The broker gets commission from Asset Management Company normally @ 2% to 2.25% or even more depending on the performance of the distributor. Since the entry load is deducted investment amount reduces to that extent.

Why investor is investing through broker is that he believes that broker is providing him advice for selection of right mutual fund scheme, he expect after sales service and off course marketing skills of broker. In the interest of Investors Securities & Exchange Board of India has issued guidelines according to which if anyone invests directly through Fund House in Mutual Fund Scheme there shall be NO ENTRY LOAD will be applied. It means entire amount will go to investment.

These guidelines are certainly beneficial for the investor. But only 5% of Investors are availing this facility, mainly because investors do not get after sales service from the fund house. In addition to it those who are aware of the market and mutual fund are generally opting for direct investment. If investor gets advice plus value added services with option of availing no entry load facility he will certainly think for the same.

It is the best option available for investors to invest in Mutual Fund without paying any charges for the same. Some brokers have already started giving this facility to their investors of making investment without paying any entry load in this case they only expect from the investor to transfer their direct investment through the concern broker.

courtesy of http://EzineArticles.com/?expert=Sadanand_Thakur