I am not an expert in MF investing, so I don’t have an opinion on demat vs. SoA etc. However, I found the below comment interesting:
Correct me if I am wrong, but aren’t demat accounts registered with CDSL, which is controlled by BSE along with several banks? Doesn’t this mean that there is no risk with investments held in one’s demat account from any possible illegal/unethical actions by the intermediary (like Zerodha), since CDSL’s systems are presumably well designed to protect investors from such possibilities?
Is there any risk with high service provider concentration - having only one service provider? If I rely on Zerodha’s services (demat, Kite, Coin, etc.) for 100% of my investments, is there any risk in case of extreme unlikely events like Zerodha going bankrupt, or the promoters (I am sure they are wonderful people in reality!) suddenly going bonkers and committing fraud, etc.?
I know such cases are very very unlikely, but I am interested in having an idea of what are the possible, theoretical risks, however unlikely they may be.
Thanks in advance!