BQ Big Decisions: Direct Vs Regular Mutual Funds – How To Choose The Right Scheme
BloombergQuint’s Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
If you’ve ever rented out a house you’ll know there’s no one way to do it. Either you ask your friends and family to help you find a flat, or you contract a broker. In the former, you will likely save a significant cost, because the broker invariably asks for his cut.
Given the choice, there’s almost no question that you’d prefer to pay no brokerage. This is true when you go out to buy a mutual fund scheme, too. Except, most people aren’t aware that there are two types of the same scheme.
In a “regular” plan, you’re likely buying from a distributor or from a brokerage. In a “direct” scheme, you’re probably buying directly from the website of a mutual fund house. The difference is—in a regular plan it’s assumed that you’re advised about the scheme that you’re buying and there is an advisory fee that’s built into the total cost.
But, why should you pay this additional cost, especially if you know which scheme to buy?
To know the answer listen to this week’s BQ Big Decisions podcast with investment adviser Arvind Rao...