I know a lot of discussions have already been done regarding the Coin charges and @nithin & the Zerodha team has time and again tried to convey benefits of investing with Coin and try to justify the charges, even the ELSS investments have been made free recently. But I still feel that the current subscription model is not in the best interests of either the users or Zerodha.
This is going to be a slightly longer post but please hear me out and please do not merge or unlist this post.
My basic suggestion is, why not make the pricing model based on transactions instead of a flat subscription? Eg. pay Rs. 5 for every MF buy transaction (selling currently still costs 5.5), similar to stock delivery. I’ll explain why I feel so and the benefits of this:
- Very simple to understand, no prior commitment, pay as you go and as per your investment style.
For example, I have been wanting to invest my surplus cash from the trading account into a liquid fund for a pretty long time. My heart wants to just go for it given all the benefits of Coin & demat (and my brand loyalty 
) but my brain says: click that button and you’ll pay Rs. 600 per year for your whole life even if you don’t make any other transaction!
Clearly doesn’t benefit someone who is just looking to do lumpsum investments occasionally or wants to simply park funds and pledge them. Note that you will earn from pledging later on too!
- Basic revenue guaranteed for Zerodha from SIP participants
Let’s look at an average MF investor who will invest through 3-4 different SIPs. 3 SIPs means minimum 36 transactions a year which translates to Rs. 180. Some might even want to have a 15 day SIP which will double the revenue to Rs. 360! Apart from this I am sure there would be some 4-5 lumpsum liquid fund transactions adding some more revenue for Zerodha.
Anyone who is doing an SIP of say 10-15k won’t mind paying Rs. 15-20 extra. In fact people, were paying the payment gateway charges till a few months back!
You’d be having better data on the size and number of SIP transactions and can take a call based on that.
- Current pricing makes very difficult to convince a new, average MF investor
Majority MF investors are looking at quickly, simply and cheaply starting their SIPs. With the current plan, they not only have to do a bunch of paperwork, understand what trading & demat is, pay 300 per year for maintaining a demat PLUS pay 600 per year just to be able to buy MFs! That’s too much!
Sure Zerodha can convert may be a sizeable chunk of existing clients into Coin users, but probably, and I may be wrong, attracting new clients who are purely looking for MF investments, given the currently available options, would be difficult. A person like me would never opt for Coin.
- Competition is catching up!
The story was different a year back. Today so many competitors offer benefits and features similar to coin (except the demat part may be) for free.
Regular plans are anyways history as per my understanding, thanks to the brilliant marketing done by all companies. I don’t think anyone who has ever googled mutual funds will ever opt for a regular plan. So the fact that Zerodha offers direct plans is not an advantage anymore.
Also, almost every new company that is offering MF services provides you with a dashboard kind of view to track all your MF investments, which is more than enough for an average MF investor who might never want to dabble into stocks or trading. So this advantage is also taken.
The only advantage the Coin truly has over its competition is the ability to get MF units in demat form for easy pledging, safety etc. and consolidated investment tracking. This is useful only if you have direct equity investments or do trading. Besides, one is already paying 300 AMC for the demat account, where the stocks or MF units can sit safely.
I agree, not all the competition is going to survive forever with freebies, but remember that sometime back the same was being said about Zerodha!
Some have in fact, started charging for advisory services etc. and we’ll see if that works, but here Zerodha is completely DIY (which I like the most!) and charging just for enabling purchase-sell of MF units!
- MF is not an advanced feature but a basic necessity for every user
I agree that some of the tools like Sentinel, Streak or smallcase Screener might be doing well with the subscription model, but they are aimed at pros or advanced users who might be willing to pay for that. MF on the other hand is a basic need for everyone holding a Zerodha account and should be priced similar to other things like trading or delivery, on a pay per use model.
Just like you have these additional tools as new revenue sources, I am sure you will be able to create more revenue sources from Coin too (probably with that NBFC license 
) and in fact you already have one source that is pledging!
- To conclude…
I’d like to say that I honestly want Zerodha Coin to grow and these are just my personal views. I may be wrong in some aspects and may be Zerodha has already achieved the number of users it targeted, but still for me, using Coin doesn’t look cost efficient.
I would like to know the views of members, the team and of course @nithin on this. I know Zerodha might not be able to immediately make any changes since they’ve already made a new announcement, but still it would be great to discuss, even if just for knowledge sake, what you feel about this!
just kidding. Thanks for making this change…