Consolidation of mutual fund folios

People invest in mutual funds (MFs) at different points of time.  An investor could have numerous folio for either the same MF scheme or for scheme under same fund house. After a point, it gets difficult to monitor these investments held in different folios. An investor can ensure good house-keeping practice through consolidation of MF folios which makes it easier to manage investments in MFs. Here is a low-down on consolidation of MF folios.

What is a folio

One can look at an MF folio as the one akin to a bank account. A folio number is a unique number allotted to each MF investor. It can be considered similar to a bank account number. Typically, when you purchase a fund, a folio number is assigned to you by the the fund house. The same folio can be used again if you want to add investments in an MF scheme of the same fund house by quoting the same folio while filing the form. Else, a different folio number will be issued.

While there is no restriction on the number of folios and you can also have different folio number for different funds, having a single folio helps the investor in tracking or holding the investments. Folio number can be used to find investors’ track records of items such as how much money the investor has placed with the fund, transaction history and contact details.

Why consolidate

While making investments in MFs, you might find that you have created many folios within the same fund house or even for the same scheme. As mentioned earlier, this might be possible if one forgets to input the existing folio details while making investment. Consequently, it becomes difficult to track investments and change details in multiple folios. This is where consolidation of folios comes into play. Consolidation of folios means merging of two or more folios into a single folio.

Consolidating folios into one would give you the benefit of tracking, transacting or making changes such as change in bank details, name, address or nominee in one folio. It will also allow you a single view of your investments by reflecting in a single statement.

Process and conditions

Investors who wish to consolidate their folios within a fund house can do so by visiting the specific fund house website, and downloading and submitting the duly-signed form called ‘Request for Consolidation of Folios’. There, they need to mention the details of their current folios and the target folio where consolidation needs to be done. They can also do the same by visiting the CAMS website. (https://www.camsonline.com/Investors/Service-requests/Service-Request-Forms/Folio-Consolidation)

This apart, one can do the same by using RTA-backed platform MFCentral, wherein they can click on Submit Service Requests option and then choose ‘Consolidation of folios’ and fill in the details.

However, do note that consolidation of folios is not as easy as it seems. There are certain conditions which need to be fulfilled to enable consolidation. One, holding mode (single, joint, anyone or survivor) and order of holding should be identical across all source folios. Two, check whether tax status (Resident, NRI, Corporate) is same across folios. Three, other details such as names, signatures, address and PAN of investor(s) should be same. Four, folio consolidation can only be done at a fund house level, while folios held across mutliple fund houses cannot be consolidated. Further, it is also important that the folios to be consolidated should have the MF investments under the same plan (growth, IDCW payout, IDCW reinvest).

Lastly, to avoid creating additional folios in future, it is always a good practice to keep note of or remember the existing folio number so that you can input the same while making any fresh purchase of units of the MF scheme of a same fund house. While it helps keeping multiple investments within the same folio, there can be certain exceptions too. For instance, people might deliberately keep mutliple investments in different folios when different MF investments shall be catering to different financial goals.

COMMENT NOW