The importance of maintaining investment in a single folio

While making investments in Mutual Funds, one may find that one has numerous folio numbers across Funds. At times investors forget what they hold and face difficulties when changes have to be made in folios or at the year-end while filing returns. It would be worthwhile for investors to take stock of their holdings, check if there are numerous folios in the same fund and get the same consolidated into one single folio number for the Fund.

I have too many folios in the same Mutual Fund and am unable to manage, maintain, and track the same. What should I do?

Many investors fill in a fresh application form even while investing in the same Mutual Fund. This leads to creation of multiple folios (accounts) and investors may find it difficult to maintain and keep records. Mutual Funds and Registrars have given investors the option to consolidate all their folios in the same Mutual Fund into one single folio. Consolidation is the merger of two or more folios into one single folio.

Consolidating folios into one would give you the benefit of having to track and transact in one folio and allow you a single view of your investments in the Fund - all investments in a Fund would reflect in a single statement.

 How can I get all my folios in the Mutual Fund consolidated into one folio?

Investors may submit a simple, signed request letter to the Mutual Fund / Transfer Agent asking for the consolidation of the multiple folios in the Mutual Fund into any one of existing folios. The folio numbers should be mentioned in the letter. Consolidation can be done subject to the fulfillment of some conditions.

What are these conditions?

Basically the below details should be uniform in all the folios:

• All Holders' names - should be in the same order in all folios
• Address
• Bank Details
• Tax Status of the Investor
• Holding nature - Joint or either or survivor
• Nominee registered in the folios
• Dividend option of the same scheme should be same i.e. either Re-invest or Payout

If the above details are the same in your folios, the same can be consolidated into one single folio called the 'Target folio'. Some Mutual Funds may have other guidelines and investors may contact the Mutual Fund or Registrar to get more information on these details.

What if one of the folios does not meet the criteria?

If any of the folios does not meet the criteria, the other folios meeting the criteria will be consolidated and the investor informed. Investors also have the option of giving a request to change the address/bank details/nominee and dividend options. Once these match, the consolidation can be effected.

What is the communication after consolidation?

A Statement of Account of the consolidated (target) folio will be sent to investors along with a covering letter confirming the processing of the request.

If the folios are consolidated into one, will a statement reflect all transactions for all schemes of the folios?

Yes! The statement of the 'Target' folio will contain all the details of all the transactions of schemes in all your previous folios. If you wish to make a transaction in the same Mutual Fund in future, please mention the folio number in future transaction slips and any new investment will be created in the same folio.

To avoid creating additional folios in future, one should remember to mention the existing folio number in transaction slips when making a purchase.
 

Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. The views expressed are general practices in the Mutual fund industry.