We really feel petty on people who dare to use such mathematics of Regular Plan Vs Direct Plan !

And when we see such large bold advertisement on the website of some well known responsible fin-tech companies, we get equally surprised on the basic thinking of these guys ! What does they actually mean to say ?

Don’t use an advisor or distributor, because :

1. its costly , or
2. its useless ?

If the answer is ‘1’ then we think its a sheer misleading statement - paying 1% p.a for 24 x7 portfolio access, personalised home to home services, friendly hand holding during bad times, excitement control in good times and other things has got its own intangible values ! Its a matter of simple understanding . Moreover it is an investor’s choice, whether they wish to pay for these value additions or not ? Who are they to make a generic statement without any logical justifications.

If the answer is ‘2’ then also its not a nice courtesy on their behalf ! How can they quantify the utility and importance of one person in another persons life ?

So technically such advertisements are simply aimed at client acquisition - and attracting clients by such illogical comparison is the easiest way for them !

As a fact with proof, we can give live examples of many clients who have moved from ‘Direct’ to ‘Regular Plans’ under our distribution code . Through our feedback and discussions, we collected following key reasons which forced them to leave ‘Direct Plans’ and take the route of ‘Regular Plans’ :

• Companies selling Direct Plans attract investors with zero fees and zero commission slogans, but they actually keep adding one or another charges from time to time; or else they keep pushing their alternate products to cover up the service cost. Its a common sense - who gives free lunch ?
• Investors feel it is always better to know your charges upfront and let it be paid from my earnings, instead of getting surprises every now and then and that too has to be paid through bill
• Most importantly, why will a person be bothered for your safety, returns or portfolio rebalancing when he/she is getting nothing out of it ? What will excite him or his team to provide personalised solutions to their clients ?

Most of Direct investors get converted to Regular Plans during the bad times , when investors needed friendly counselling, educative sessions and proper hand holding ! Because only ‘regular plan’ feeds the servicing cost to the MF intermediary, which helps both client and the agent, build a mutually beneficial, healthy and long term relationship.

We strongly believe that Robot can not replace human when it comes to emotions , care and sympathy ! Investing for life and your long term goals should not be a lone journey ! So think twice before going ‘Direct’ . You must have a friend - and 1% is not at all a big cost for what you get in return .

And who knows, the funds invested through a distributor perform better than funds selected by you directly by 2% or 5% p.a , then the whole story will fall against such negative advertisers.