mutual-funds

HOW TO OPEN A MUTUAL FUND ACCOUNT

There are many people I know who like to invest and capable of doing so and yet have not started. Most of them revealed that the reason for it is simply because they are unsure where to begin. The same is true for me when I started. Sure I have heard of the financial terms many times but as the saying goes, hearing is miles away different from actually doing it.

This post is about how I opened a mutual fund account.  First of all, I am no investment guru. I am an amateur trying to learn the ropes as I go through the process and this is my attempt to document my journey. I notice that when I write things down, the ideas become a little bit clearer instead of them being hazy concepts inside my head.

Keep in mind that my knowledge is little and skills (if any) are rudimentary. I am just an ordinary person who is excited to learn about investing because I am hooked by the idea of early retirement.

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DEFINE MUTUAL FUND

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund [Investopedia].

There are also many types of funds but it will not be discussed here.

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HOW TO START IN MUTUAL FUNDS

I’m sure there are many ways to open a mutual fund account but I will share here how I did mine and perhaps this will give you an idea.

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Step 1: Contact COL Financial (COL)*

Basically it’s a simple email to a COL Financial customer relation officer (herein referred to as representative/ rep) informing them of your intention to open an account with them. If I recall correctly, I got the rep’s email from my colleague in my first job here in Dubai. Comment below if you are interested to obtain the email of the representative who handled my account opening.

*COL Financial is an online stockbroker based in the Philippines; in other words, it acts as a “platform” wherein you can start investing in mutual funds.
*P.S. I’m not paid by mentioning them here.

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Step 2: Accomplish requirements

And then the rep will reply and ask you to fill out 2 forms and furnish an ID copy:

1. CAIF – Customer Account Information Form wherein you need to key in personal information, occupation details, income source and investment profile (your asset value range, investment experience and objective/s). Note that you will need to put your TIN No. and SSS no.

caif

2. FATCA – Foreign Account Tax Compliance Act Disclosures is basically a questionnaire to determine if you need to pay tax to the US government or not.

FATCA

3. As regards the ID copy, remember the following:

-must be Philippine government-issued such as passport or PRC (Professional Regulation Commission) ID

-photo and signature must be visible

-signature on the ID and the aforementioned forms must be consistent

Email scanned copies of the above before sending the originals to receive confirmation that everything is satisfactory.

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Step 3: Forward originals to COL

When confirmed that all is okay, you may now send the original documents to COL office in Pasig.

You can either send it via courier or submit it personally.

Sending from Dubai, charges may come a bit high so my strategy was to scout/wait for a friend who will leave for the Philippines and kindly requested them to send my documents from there so my courier fee was significantly reduced.

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Step 4: Receive confirmation of receipt of documents and account opening approval

After a few days, they will send a confirmation email that they have received your documents . They will now give you an eight-digit account number. At this point, note that you have just been assigned an account number but your account has to be activated so you could access it.

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Step 5: Fund your COL account

There are many ways to top up your account like BDO/BPI bank transfers. I find these two very easy and convenient.

Once you have funded your account, you will receive your system generated password through your registered email within 3 banking days from your initial deposit. Once funds have been cleared on their end, you will receive a confirmation email that your account has been activated. Your login details will be given as well.

Congratulations! You now have an active account!

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Step 6: Start investing into mutual funds

Now that you have an account, you may now start buying shares from different mutual funds. The popular ones include PhilEquity fund, Philam bond funds and many more.

Banner photo – credit here

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Let me know if you have questions in the comment section below.

In my next post, I will try to walk through the process on buying shares from these funds.

I hope I have been of help. God bless and happy investing!

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