Switching from Direct Plan to Regular Mutual Fund Plan

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Switching from Direct Plan to Regular Mutual Fund Plan

Last Updated on December 7, 2021 by Chitale CFS Pvt Ltd

Switching from direct plan to regular mutual fund plan can provide numerous financial benefits. Many investors do not understand the difference between direct and regular mutual fund plans and often make wrong investment choices.

Before discussing why an investor should switch from direct mutual fund plan to regular plan, let’s try to understand how these two plans work:

What is Direct Mutual Fund Plan:

Direct mutual fund plans are those plans where an investor can directly invest in mutual funds without any involvement of entities like mutual fund distributors.

Most online investment websites including AMC websites provide this direct plan where investors can visit their website and invest online.

An investor can also visit AMC’s office to invest in direct plans through offline mode. Only advantage direct plans offer is that they have relatively less expense ratio as compared to regular mutual fund plans.

Apart from that direct plans do not offer any additional benefit. In fact, regular mutual fund plans have numerous benefits when it comes to opting for a mutual fund investment.

If you compare the key differences between direct and regular mutual fund plans, you will understand that saving money on expense ratio is not enough to choose direct mutual fund plan over regular plan.  

What is Regular Mutual Fund Plan:

Regular mutual fund plans are those plans which can be purchased through mutual fund distributors.

Mutual fund distributors play an important role in choosing best performing mutual fund for you from thousands of mutual fund schemes offered by AMCs.

Mutual fund distributors carry out all research activities on investor’s behalf and carefully choose mutual fund schemes based on investor’s financial goals.

Mutual fund distributors also take care of all the other important investment activities such as submission of application form, doing KYC, depositing cheques etc.

In addition to this, they also help investors to optimize your mutual fund portfolio by regularly monitoring and making necessary changes by carefully reviewing the portfolio performance.

MIRAE says, if you need assistance in making right investment decision by understanding your risk appetite or correct asset allocation, it is best to consult mutual fund expert.

How to know if you have invested in direct or regular plan?

It is easy to check if you have invested in direct mutual fund plan or a regular mutual fund plan. Every AMC clearly mentions your scheme type on your account statement.

If you have “Direct” or “Dir” written on your statement, that means you have invested through a direct plan. If you have “Regular” or “Reg” written on your CAS, that means you have invested through regular scheme.

There are also other options to understand whether you have invested in direct or regular mutual fund plan. If you have ARN Code (AMFI Registration Number) on your statement, it means you have invested in regular mutual fund plan through an AMFI registered Mutual Fund Distributor.

AMFI registration is mandatory for all mutual fund distributors and adding ARN code is necessary for a regular mutual fund plan.

Many online websites also offer regular plans so it is not necessary that if you are investing through online mode then you are opting direct plan.

In addition to this, if you are investing through AMC’s website or app, it does not necessarily mean that you are investing in direct plan, they also offer regular plans.  

The best way to check your scheme type is to contact your AMC or Mutual Fund Distributor (MFD) and directly confirm with them whether you have invested through direct or regular mutual fund plan.

Switching from direct plan to regular plan:

All Asset Management Companies (AMCs) in India provide both direct and regular mutual fund plans and they also allow to switch the plans if you are not satisfied with your investment choice.

Switching can be done via online as well as offline mode.

How to switch from Direct plan to regular mutual fund plan

It is recommended to carefully compare direct plan vs regular plan and make the investment decision right at the start of making the investment. However, if you are not happy with the direct plan, you can switch the direct plan to regular mutual fund plan anytime.

We can help you in switching the direct plan to regular plan and make the entire switching process smooth.

All you need to do is to contact us and share your investment details, we will help you in switching your investment from direct mutual fund plan to regular plan.

You can connect with us at 8999116127 or 8087678759 or email us at suni@chitalecfs.com or ameya@chitalecfs.com. We are AMFI registered Mutual fund distributors with more than 30+ years of experience in goal based investments!

Disclaimer: Mutual fund investment is subject to market risk, read scheme related documents carefully.

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