Most Frequently asked questions
We provide you options for investing in Mutual funds or
PMS (stocks) through direct plan route
(Zero commission plans)
No. The fees range from Rs. 15000 to Rs. 20000 for single income earning family depending on the amount of work we need to do. For example, if the clients have lots of insurance policies, many mutual funds folios, very high Fixed deposit certificates etc., then the fee will be in the higher range due to higher time needed to analyse the same.
Every mutual fund scheme has 2 plans – Regular and direct. For example, if we take HDFC Flexi cap fund then there will be 2 plans for this one scheme.
For eg – Hdfc Flexicap fund – Growth: Regular plan & Hdfc Flexicap fund – Growth: Direct plan. The regular plan is purchased through a broker/ MF distributor/ banks/ online broking portal, etc. The 2nd one which is Direct plan is purchased directly from the mutual fund company.
The financial advisor who helps you to invest in direct plans does not earn any commission or incentives to invest, hence he is able to provide you unbiased advice. Secondly, he enables the process by doing the paperwork and creating the online account. He also helps you to transact through direct plans. He keeps track of the data related to your investments and also analyses the same. Since he puts in the hard work he needs to be compensated.
The financial advisor provides you unbiased Advice, assistance in managing your investments, assists in transacting as well. His advice will be in sync with your financial goals. He has complete charge of your investments and monitors the same to enable you to get better returns. Once your investments increase the charges also decrease so in the long run you are benefitting from this arrangement.
At the moment we are having online meetings but once the pandemic is over, we can have physical meetings in our office to those who prefer to meet physically. For outstation clients the meeting will be through online mode.
Yes. Since financial planning is one activity and managing investments and transactions in direct plans each month is a separate activity, we charge fees for direct plans management. But in the first year of engagement if the client has investments to be done less than Rs. 10 lakhs then we don’t charge in the first year separately.
On an average there is a clear 1% difference in the Regular and direct plans of most equity schemes & if we combine some index funds in the portfolio then the average cost that you pay in regular plans Therefore if regular plans are providing 12% returns over long term and direct plans provide 1% more than regular plans (due to the cost difference) then the additional returns provided by direct plans will be much higher. For example, on a Rs. 10 lakh investment held for 10 years earning a return of 12% for that duration, the direct plan scheme will generate approximately Rs. 2.88 lakhs more due to cost saving.
If you can understand and analyse mutual funds and If you have the time to do the paperwork, also handle the data related to the investments comfortably then you should do it yourself.
The difference lies in the expenses that the scheme charges you for managing the fund. For example – HDFC Flexicap fund – Gr : Regular plan expense ratio is 1.72% while that of HDFC Flexicap fund – Gr : Direct plan is 1.13%. This means when you buy direct plans you save 0.59% of charges in one year. Also, due to low expenses the NAV of direct plans is higher than regular plans which means direct plans provide slightly higher returns than regular plans due to the savings in expenses per year.
You can check the NAVs of both options to get an idea of the difference