8.16What is a regular mutual fund plan?
1What is it?
A regular plan is bought through a distributor or agent, who is paid a commission from the fund’s expense ratio.
2Why does it exist?
You pay for advice/service via higher fees. Fine if you genuinely get useful advice, costly if not.
3Quick revision
- Includes distributor commission.
- Higher TER.
- Same portfolio as direct.
4Knowledge check
Q1. Who earns the extra fee in a regular plan?Show answer
The distributor.
Q2. Same fund: why is regular NAV lower than direct over time?Show answer
Higher expense ratio.
Q3. Can you switch from regular to direct?Show answer
Yes, but it is a redemption, so tax and exit load may apply.
See it live on MojoStox