InvestorQ : How should advisors and mutual fund AMCs handle rise in SIP closure ratio?
Aditi Sharma made post

How should advisors and mutual fund AMCs handle rise in SIP closure ratio?

Answer
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Aashna Tripathi answered.
5 months ago


This is actually the time for the advisors and AMCs to stand up. More often than not, investors are selling out of SIPs in a state of panic or because they need funds in an emergency. Panic is normal since investors have rarely seen a 30% correction in the Nifty in a month. This is the time to sit with clients and work out options. Can they manage the budget better to continue the SIP? Can they look to temporarily cut down the SIP size? Can mutual fund AMCs offer their clients a SIP moratorium just like banks are offering an EMI moratorium? They may lose out the rupee cost averaging for 3 months but at least they don’t lose out on the long term wealth creation potential of equities. It is time for AMCs and advisors to think out of the box. Ideally, the onus is on the AMCs and the advisors to ensure that the SIP termination happens only as a last option.