Regular Mutual funds schemes are preferred Instead of low cost direct plan

 While Direct plan has lower cost. Why should I invest through regular plans?

A) A common misconception is that because you are educated and aware, you can easily handle your finances. The two do not have a direct correlation. A good surgeon may not be good with money or a lawyer knowing about better investing More importantly, they may not have the time to research and make correct financial decisions.

[Economic times article] Sensex crashed 3,935 points, hitting a low of 25,981 amid the Covid-induced lockdown, Bengaluru-based Viren Bhatia could not contain his panic any longer. Racked by uncertainty, he sold the bulk of his equity portfolio which he had been building since 2009. He suffered a loss of nearly Rs 30 lakh. He did not have a financial adviser.

The regular mutual funds have quite a few advantages with slightly high expense ratio.

Firstly, the advisor will help you choose among more than 2000 different Mutual Fund schemes across more than 30 categories. It is not practical for investors to keep track of everything and choose the right option. MF professionals keep track of all schemes and can refer only relevant schemes to the investor

Secondly, investing in a mutual fund isn’t as easy as it looks. An investor has to assess his profile based on risk and financial needs. Then find the mutual fund that fits into these criteria. All this is a time taking process. An intermediary will know the existing mutual funds. And will help find the best fit based on investors’ profiles.

Thirdly, Markets are dynamic and ever-changing Investors find difficult to keep up with it, in a regular plan, mutual fund distributors keep track of the markets analyse different Mutual fund schemes and monitor their client’s portfolios regularly. Also as needed, they advise on restructuring it. Investors opting for a direct plan have to take time out to monitor their portfolio regularly. Generally, after a while, most direct investors lose interest & enthusiasm to review the portfolio regularly which is essential for optimum results.

Fourthly, apart from mutual funds, an intermediary answer your queries on several other days to day investment queries that you may have. You have a person who is available to serve you 24/7 for years and decades to come. Today, you may think you can do it yourself but tomorrow you may again need someone to advise you. Imagine you are on a vacation or in an emergency. Your advisor can save you from the hassle of transactions. Intermediaries provide additional services for investors’ convenience such as keeping a record of investors’ investments, facilitating redemption's, etc. All these services are not available for investors in direct plans.