Updated on March 18, 2023
Mutual fund schemes which are sold through third party channels, agents, distributors or other intermediaries are called Regular Plans. The Mutual Fund pays these intermediaries by way of a fee, commission or brokerage for selling their schemes.
The Mutual Fund charges an expense ratio to its assets for recovering this cost or fees paid to the intermediaries. The expense ratio for regular mutual fund schemes is higher than the direct scheme. The return from the regular scheme, thus is slightly lower, as the Net Asset Value (NAV) becomes higher due to the expense ratio.
What are the benefits of Regular Plan?
Benefits of Regular Plan are:
1. Regular plans are good for investors who do not have the time for managing their portfolio or the required knowledge about markets/investment products.
2. They can get specialised service and advice for a small fee.
3. Investing through a regular fund is convenient, can be customised as per the investor’s profile by the intermediary