Direct plans are purchased directly from the fund house without intermediaries and their total expense ratio does not include the distribution commission. Investors who are knowledgeable and can do their own research or they prefer paying separately for the advice from a registered investment advisor generally choose a direct plan. Regular plans include distributor commissions (as decided by SEBI which regulates the capital market) in their total expense ratio which is paid to the mutual fund distributor by the mutual fund companies. In return, the mutual fund distributor gives incidental advice, offer transaction support, send regular portfolio reports & tax related reports, and most importantly, is available to answer all your queries and helps you to stay updated with the latest developments. Regular plans are generally good for those who prefer having someone to handhold and guide them and do not have the time and expertise to research, build and manage the mutual fund portfolio on their own.
