Somebody sold you a scheme in 2016 and you haven't heard from them since. Or they've moved, or left the business, or you simply want to deal with somebody else. The question that follows is always the same: do I have to redeem and start again? No. You don't. And I'd rather write this plainly even though it describes how a client leaves us, because a page that only explains how to arrive is not a useful page.
Three things you can do
Move the folio to a different distributor. The new distributor becomes the one attached to your folio and services it from then on.
Remove the distributor entirely. A folio can be held direct, with no distributor attached, and you deal with the fund house or registrar yourself.
Leave it exactly as it is. A folio with an inactive distributor still works. Your units are safe, the SIP keeps running, and you can transact through the fund house directly whenever you want.
None of the three involves selling. No redemption, no exit load, no tax event, no new holding period. That's the single most important sentence in this article, because the fear of triggering a sale is what keeps people stuck.
What the process actually needs
The mechanism is a change-of-broker request submitted to the registrar or fund house, and the forms differ slightly between them.
You'll generally need your folio details, the new distributor's ARN if you're appointing one, and your signature. Where you're moving to no distributor at all, the equivalent instruction is to hold direct.
The important part: it doesn't require the existing distributor's consent or cooperation. It's your folio. If somebody tells you they need to approve it, that's incorrect, and it's worth noticing what else they might have told you.
One thing to check afterwards is whether the change came through, since a request that came back for a missing detail looks identical to a completed one until it matters. Confirmations arrive from the registrar, which is one more reason your own email should be on the folio rather than anybody else's.
The bit that surprises people
Moving to a new distributor generally applies from the change onwards, not retrospectively, and existing units usually continue under the plan they were bought in.
So a folio bought in a regular plan stays in a regular plan after the move; you've changed who services it, not what you hold. If you want to move from a regular plan to a direct plan, that's a different action entirely and it does involve a redemption and repurchase, with the tax and exit load that implies. Our page on direct versus regular plans sets out when that's worth doing and when the cost outweighs it.
Worth separating those two clearly, because they get discussed as though they're the same decision. Changing distributor: free, no sale. Changing plan: a sale and a purchase.
When it's worth moving
Not for every irritation, but these are real reasons.
- Nobody is servicing the folio. If you can't reach them, or nothing has been reviewed in years, you're paying for a service inside the expense ratio and receiving nothing for it.
- You're being moved between schemes often. Every switch is a redemption with tax and possible exit load, and frequent moves deserve a plain explanation of what each one cost you.
- Your own details aren't on the folio. If statements go to somebody else's email, that's worth fixing regardless of what else you decide.
- You've been promised returns. That's a reason to leave and, honestly, a reason to check the registration too.
And a reason that isn't on the list: one bad year. A scheme falling is not a servicing failure, and moving distributor won't change what the market did.
What changing does not fix
Worth being honest here, since this is the part a new distributor has every incentive not to mention.
A change of distributor doesn't alter what you own, doesn't undo past switches, doesn't recover costs already paid, and doesn't make an unsuitable scheme suitable. If the portfolio needs work, that's a separate conversation with its own costs, and anybody who frames moving to them as fixing your holdings is selling.
What it does change is who answers the phone and whether the housekeeping gets done. That's a real thing, and it's most of what a distributor is actually for.
How long it takes, and what to expect
Usually a few working days from a correctly submitted request, though it varies by registrar and fund house.
You may receive a confirmation of the change, and it's worth looking for rather than assuming. A request that came back for a missing signature or a mismatched detail sits in exactly the same state as one nobody submitted, and you find out months later when you contact somebody who isn't attached to your folio.
Nothing about your holding changes in the meantime. The units are yours throughout, the SIP runs, and there's no window during which the folio is in limbo.
If you'd rather hold direct
Genuinely fine, and for some people it's the right answer.
Holding direct means no distributor commission inside the expense ratio, so the ongoing cost is lower. It also means the review, the nomination, the bank updates and the transmission paperwork are all yours to manage. If you'll actually do those, you should hold direct and keep the difference; we've said so plainly on direct versus regular plans, including who should skip us entirely.
What we'd avoid is the middle position: holding in a regular plan while receiving nothing for it. That's the worst of both, and it's the situation a great many long-forgotten folios are quietly in.
What happens to a running SIP
A common worry, and the answer is reassuring: nothing.
Your SIP is an instruction between you, the fund house and your bank. Changing who is attached to the folio doesn't cancel it, doesn't change the amount or the date, and doesn't touch the mandate. The debit continues exactly as before.
The same goes for any step-up instruction, an SWP, or an STP already running. They're arrangements on the folio rather than arrangements with the distributor, which is the whole reason moving is as painless as it is.
What does change is who you contact when you want something done, and where the servicing responsibility sits from that point.
Before you do anything
Pull a consolidated account statement first, so the decision is made against the full picture rather than the folios you happen to remember. Our guide on finding old mutual fund investments explains how, and it usually surfaces at least one folio people had forgotten entirely.
Then check nomination, the bank account and the contact details on each. Those matter more than who is attached to the folio, and they're the things that break at the worst possible moment.
If you'd like us to look at what you hold and tell you plainly whether moving is worth it, including when the answer is that you're better off holding direct, that's a conversation with no charge. Myfolios is an AMFI-registered mutual fund distributor (ARN-145870) working since 2014. Get in touch, and check the ARN first, as our guide on verifying registration explains.
