There are proponents of direct investing in mutual funds and then there are those who promote the distributor route. Investors have the choice but at the moment, the takers for direct route are not much. In the top 15 cities, only 11 per cent use the direct option. The direct route is at 3 per cent in the B15 (beyond the TOIS) centres, indicating it is still early for people to invest on their own.
Considering mutual funds are a push product, with direct pull only among corporate and evolved investors who see value in investing through this instrument, the uptick with direct plans is low. The drive by the industry towards investor education is a nudge towards popularising mutual fund investing and something which will go a long way in bringing in more people into investing through this instrument. For the moment, the value that an intermediary brings is far greater than the 70-100 basis points that one could otherwise save when investing in direct plans. With the investor base going up, there will come a time when direct plans will be the automatic choice for many.
