The mutual funds industry witnessed the most remarkable reform in its history 10 years ago with the launch of direct plans, which did away with commissions or fees paid to the distributors and, thereby, lowered the overall expenses for the investors. In short, the cost to the investor reduced, giving a leg-up to the returns from the same funds. Our numbers show that investors make more in direct funds, but the number of folios in direct plans is still much lower than regular distributed schemes. As direct plans celebrate their 10th anniversary, we look back at how direct plans came into being and try to make sense of the investor behaviour in terms of their lower uptake despite higher returns. The Birth Of Direct Plans Capital markets regulator Securities and Exchange Board of India (Sebi) first introduced direct plans through a circular dated September 13, 2012, asking fund houses to introduce separate options for direct investments. But, in order to understand how this circular came into being, we will have to step back in time. The Entry Load Era: Until 2007, fund houses charged...