Opening “Open Architecture” for Investor Opportunities
The minor investors would like to invest in mutual funds because they know that it is likely to meet their needs. After having studied and compared the mutual fund's performances, it's time to make a purchase. But there’s a lot of difficulties in doing transactions; traveling to many Asset Management companies for opening more than one account which causes it time-consuming and also cumbersome to invest, transfer money, buy, sell or switch funds. What are some ways to enable us to buy good mutual funds across Asset Management companies? This article has answers.
In the mutual fund management industry, there are 2 types of asset management companies that are in the same group of banks. Most have banks as mother companies or major shareholders in asset management companies, such as Siam Commercial Bank who is the mother company of Siam Commercial Asset Management (SCBAM) and Non-Bank Asset Management companies which do not have a parent bank, like Aberdeen Standard Asset Management.
Those asset management companies will have their own distribution channels. Investors can open a fund trading account directly at the fund's website service counter or through the Mobile Banking of the mother company.
In this case, a sample of opening a bank account should be a clearer picture. For example, if we want to open a mutual fund account of Siam Commercial Asset Management then we can do it at any branch of Siam Commercial Bank where now we will use only ID cards and mobile phone numbers to be provided to the bank. Then we can open a mutual fund account in less than 10 minutes.
Please remember that banks are not the issuer of the mutual fund or fund manager. They are just a distributor or only one of the distribution channels of asset management companies.
Mobile banking is another option for opening a mutual fund accounts, for example, you can open your own accounts for SCB Asset Management via SCB EASY App, to facilitate investors to open mutual fund accounts more easily.
In the past, buying and selling funds by themselves in many asset management companies was quite complicated. This might be due to there is not just one good asset management company and we may miss out on good investment opportunities. In addition, we may have to waste time managing the money allocation which becomes more complicated since there are more than one mutual fund accounts. Looking at the overall portfolio is quite difficult because our investment information is placed in different asset management companies. Is there any way that we can buy good mutual funds across banks?
For this reason, some banks such as Siam Commercial Bank, have changed their concepts as well. That's why 'Open Architecture' is used. So, what is 'Open Architecture'?
Open Architecture is a selection of good mutual funds from many Asset Management companies for investors to easily buy in one place. Open Architecture mainly focuses on the needs and interests of clients. It is different from the past that the scope of investment was usually similar and the trading was quite limited, the bank would sell only the mutual fund of the affiliated asset management companies
Benefits of Open Architecture
It is expected that in the future Thai banks would start to open more architecture because of customer-centricity. This will allow customers to choose to invest in a wider variety of assets and help achieve investment goals faster and easier.
The Siam Commercial Bank has already opened an Open Architecture mutual fund through the SCB EASY App. For new customers without any investment account, please contact Siam Commercial Bank at any branch for an opening bank account. Kindly find out more at www.scb.co.th
Nipapun Poonsathianrasap CFP
Independent Financial Advisor, Writer, and Lecturer.