Regular vs Direct, and What We Are Paid

Published 26 October 2026 · Darshan Saikia, Founder, MoneyBag Capital Distribution

Every fund has a price, and part of the price of a Regular plan is us. Here is exactly how that works, including when you should not pay it.

You have been investing for two years through a distributor. One evening a colleague asks, "Are you in Regular or Direct?" You are not sure what the question means, and you are a little embarrassed not to know.

There is nothing to be embarrassed about: most people are never told. So here it is, from a distributor, including the part about how we are paid.

The expense ratio: a cost you never see a bill for

Running a mutual fund costs money: fund managers, research, registrars, audits, and distribution. These costs are taken out of the fund itself as a yearly percentage, the expense ratio. You never receive a bill. It comes out of the fund's value, every year you hold it.

A road through misty hills, with a red-and-white toll barrier across it. — A cost you pass through every year, whether or not you notice it.

Regular and Direct: same scheme, two versions

Almost every scheme is offered in two plans. They hold exactly the same portfolio, run by the same fund manager. The difference is the expense ratio.

Regular plan: the expense ratio includes a commission for the distributor who helped you invest.
Direct plan: you invest with the fund house directly, no distributor is paid, and the expense ratio is lower.

Because the Direct plan's yearly cost is lower, its NAV grows a little faster than the Regular plan's over time. The difference each year is small; over many years it adds up.

Two routes up the same green hill: a paved road with a toll booth, and a footpath beside it. — Same destination, two routes, different costs.

How we are paid

We are paid a trail commission by the fund house, built into the Regular plan's expense ratio. It is a percentage of what you have invested, paid for as long as you stay invested. Since October 2018, distributors are paid only this way; upfront commissions are not allowed.

So you pay us nothing directly, but you do pay for us, inside the Regular plan's expense ratio. We would rather say that plainly than call the service free. If you ask, we will show you what we earn on your investments. Our regulatory disclosures set out how this works.

What the commission pays for

Helping you choose a scheme that fits the goal, not just the popular one.
KYC, forms, nominations and changes, done for you and checked.
Reviews when your life changes, and a call before you act on a bad month.
Someone in Guwahati who answers the phone.

A row of shoes of every size on a wooden floor, from large boots to small children's shoes. — The right product for the right person is most of the job.

When Direct is the better route

If you are comfortable choosing schemes yourself, keeping track of them, and doing your own paperwork, a Direct plan costs less, and we will tell you that ourselves. Many investors do well that way. Paying for help only makes sense if you use it.

To compare the two for any scheme, look up the expense ratio of each plan on the fund house's website. And whoever you invest through, check who you are dealing with first: is the person giving you tips registered? If you would like to see what you are paying today, ask us.

If you don't need help, a Direct plan costs less, and we will say so.