While paytm is about to launch Paytm MONEY that will allow its subscribers to invest into the DIRECT plans of Mutual Funds, it would be wise to examine this concept of Direct Mutual Funds v/s Regular Mutual Funds.
Regular Mutual Funds are investments that are assisted with a Mutual Funds Distributor. The distributor discusses your past experience at investing, analyses your risk temperament and suggests schemes appropriately based on these factors, including the tenure you intend to stay invested. Moreover, at various intervals, they update you on the market movements, while counselling you on your investment actions.
Direct Mutual Funds are options wherein Investors can go buy their Mutual Funds directly from the companies without the distributor interface. It is appropriate for Investors to understand their temperament, understand the various categories of funds and how they would suit him.
From a costing perspective there is difference of about 1% between the Regular v/s Direct. This 1% higher expense in the regular plan is meant to compensate the distributor for his services in understanding the changes in the client’s life and updating him on the changes in the market, economy and funds. Further he advises on any change needed as per the market conditions and others.
If you are well aware of the Investing world and would like to take your own call on your investments, then DIRECT is the one for you.
On the other hand, if you lack the expertise and time to understand your temperament, search the market for appropriate investment products, make investments appropriately and thereafter do a review of how your investments are faring AND make changes there on… it is best left to the expert a.k.a Regular plan.
Are you investing to become WEALTHY or are you saving your money? Choice is yours!