Nomination is an elegant concept. I make an investment with or through a financial entity.
Examples are FD with a bank, mutual fund units with a fund house, perhaps through a broker, shares etc., through a securities account, some bonds directly but to be credited into my demat account and so on. By way of contingency planning, I instruct/authorise this entity to give the money to a specified person or persons when I die.
Based on a nomination, the financial entity can hand over the proceeds to the nominee and fulfill its responsibility towards me in entirety.
Who can be my nominee and who else, if that be the case, is the final intended beneficiary of my money is a different side of things and we will go into them another time. What happens if I fail to nominate also is a subject for another day. Now we are only looking at the process and its documentation.
Many have struggled to streamline and receive their loved ones’ financial investments, count me among them. A forgotten nomination is a major culprit in many cases.
The nomination form is a very straightforward document, or so it should be. My name, personal information, information about the investment and centrally, the name and identifying personal data about the nominee/s.
Each entity has a different, fancy, flummoxing and irritating document. Starting off with a full-fledged letterhead type name, logo and even an advertisement tag line, it goes on to dense legal language, where you have to tick this and strike off that.
I live in a building that has a lovely Indian name, resonating with history and culture. And it is long. Once I pen that in, I can’t even write ‘Chennai’ after that. Too bad. There are predetermined number of squares tightly printed and that’s all I get!
More parsimonious is the space allotted for nominee name and details. And here I thought this was the hero of the whole story!
I have taken to saying a mental prayer and squiggling in our South Indian names that are pretty, evocative, and yes, long, in any nearby space. Luckily the number of digits in PAN numbers is a given and the requisite number of squares are available. That, I think, will finally settle the matter when the nomination has to be given effect to.
I have quietly blessed those behind the Association of Mutual Funds of India (AMFI) which has put out a set of documents for transmission that can be used across mutual funds/ fund houses.
They are simple, lucid and mostly one-page documents for nomination, ECS mandate, change of address, transmission application to transfer the investment of a deceased person to the nominee/s.
On to online nominations in the next instalment.
(The writer is a business journalist specialising in insurance & corporate history)
