Direct plans: lower cost, more responsibility
A Direct plan costs a little less. A Regular plan comes with a distributor who helps you choose, review and stay on course. Here is how to weigh the two.
A Direct plan is bought straight from the fund house (or through a platform or the registrar) without a distributor. Its expense ratio has no distribution cost in it, so it is lower than the Regular plan of the same scheme, and the NAV grows a little faster.
- Choosing the category and the scheme, and the research behind it
- Monitoring performance against the category and the benchmark
- Watching fund manager changes, category changes and portfolio concentration
- Keeping your asset allocation on plan and rebalancing
- Checking overlap and duplication across schemes
- Tracking goals, capital gains and tax records
- Staying invested, or acting on plan, when markets fall
understand mutual funds well, can analyse schemes independently, have time for research and monitoring, can rebalance and stay disciplined, understand the tax implications and are comfortable deciding on their own.
- What is the difference between a Direct and a Regular plan?
- Both plans of a scheme hold the same portfolio and have the same fund manager. A Regular plan is bought through a distributor and its expense ratio includes the distributor's remuneration; a Direct plan is bought directly from the fund house or through a platform and has a lower expense ratio.
- How much more does a Regular plan cost?
- In AMFI's TER disclosure as of 2 Oct 2026, the median Regular plan costs 0.70 percentage points a year more than the Direct plan of the same scheme, across 1729 schemes (the middle half lie between 0.39 and 1.13 pp).
- Is a Direct plan always better?
- A Direct plan costs less, but the investor takes on research, selection, monitoring, rebalancing, tax records and staying invested through falls. Whether the cost of support is worth it depends on the investor; no form of support guarantees better returns.
- Is a mutual fund distributor the same as an investment adviser?
- No. A Mutual Fund Distributor is registered with AMFI and is paid commission by fund houses from Regular-plan expenses. A SEBI-registered Investment Adviser charges the client a fee and usually recommends Direct plans. Integrato is an AMFI-registered Mutual Fund Distributor (ARN-173155), not a SEBI-registered Investment Adviser.
- How do I see what my distributor is paid?
- Your half-yearly Consolidated Account Statement (CAS) shows, for each scheme, the commission in rupees paid to your distributor for that half-year. You can also ask the distributor directly.
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