Which is the first step that a mutual fund distributor should take in building a mutual fund portfolio for investors?
A
List the best-performing funds for the investor to select
B
Identify the investor's financial goals
C
List good equity funds with the lowest expense ratio for the investor to select
D
Invest the amount in a Liquid Fund and start a Systematic Transfer Plan (STP) into equity funds
Correct Option:
B
Explanation
The first step in building a mutual fund portfolio is to identify the investor's financial goals and understand their investment needs, risk tolerance, and time horizon before recommending suitable schemes.
