विशेषज्ञ की सलाह चाहिए?हमारे गुरु मदद कर सकते हैं
Ramalingam Kalirajan |10872 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 02, 2025
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Question by AVP on Apr 30, 2025
Hi Sir, My question is that i have invested around 20 lacs in mutual funds till now with asset value around 21 lacs as of date. I have recently come to know that "regular funds" have more expense ratio and if the fund value is more, then the difference between the direct and regular funds is quite substantial. Now since all my mutual funds are "Regular" funds and not "Direct", i am in a dilemma. I plan to keep investing for another 20 years max. Do i withdraw all the funds and then re-invest under direct and then keep investing for another 20 years or do i stop only all the future SIPs for the regular funds and start with new ones in Direct?. The reason is that i dont want to get a nasty surpirse when i go for withdrawal after so many years. Pls guide. your insights would be very much appreciated. Thanks.
Ans: It’s great to see that you’ve built a strong mutual fund portfolio of Rs. 21 lakhs.
Your long-term horizon of 20 years is also a big strength.
Let us now go step-by-step and understand what’s best for you.
Current Portfolio Snapshot
Your total investment is around Rs. 20 lakhs.
Current value is around Rs. 21 lakhs.
All investments are in regular mutual funds.
You plan to continue investing for up to 20 more years.
Your Main Concern
You found that regular mutual funds have higher expense ratios.
You worry this cost will reduce your wealth in the long run.
You are thinking about shifting to direct mutual funds.
You are considering two actions:
Stop current SIPs and start new SIPs in direct funds
Or redeem all and reinvest in direct funds
Your Approach:
You have shown good financial awareness.
Long-term investing is the right strategy.
Evaluating costs and value is a smart investor’s habit.
Wanting to avoid surprises later is a thoughtful move.
You are trying to protect future returns.
That deserves appreciation and respect.
Understanding Expense Ratios
Yes, regular funds have higher expense ratios than direct funds.
The difference may look small yearly.
But over 15–20 years, it can become meaningful.
Yet, cost is only one part of investing.
Let us now look at the full picture.
What You May Lose in Direct Mutual Funds
No certified financial planner to guide your journey.
You must monitor all funds and markets yourself.
Asset allocation, SIP review, and fund performance – all by yourself.
In stressful markets, decisions get tougher.
Many investors switch wrongly in panic.
Lack of hand-holding can cost more than expense ratio.
What You Gain in Regular Mutual Funds
You get help from mutual fund distributors with CFP knowledge.
They help in choosing the right fund and goal planning.
Also help in reducing taxes and increasing efficiency.
Provide motivation during weak market cycles.
That support can increase your long-term returns.
In fact, emotional mistakes avoided often cover the extra cost.
Should You Stop Existing SIPs?
If you feel confident managing investments, you can consider it.
Stop regular SIPs and start direct SIPs from today.
That way, no tax is triggered now.
Also, you don’t disturb existing investments.
This gives you time to test and compare performance.
You can move slowly and with comfort.
Should You Redeem and Reinvest in Direct Funds?
Not recommended immediately.
Redemption may trigger capital gains tax.
Short-term capital gains are taxed at 20%.
Long-term capital gains above Rs. 1.25 lakh are taxed at 12.5%.
You may also lose indexation benefit in some debt funds.
Exit load may apply if units are sold within 12 months.
Also, market timing risk if funds are redeemed and reinvested wrongly.
A Balanced Solution That Works
Don’t disturb existing regular funds.
Continue holding them for long term.
Avoid booking gains unless needed for goals.
Start fresh SIPs in direct funds if you are confident.
This way, you mix both approaches.
Slowly compare and learn before switching completely.
You avoid taxes, exit load, and rushed decisions.
Professional Support vs. Lower Cost
Direct funds save cost but demand skill and discipline.
Regular funds offer experience, planning, and structured help.
Without guidance, you may miss rebalancing and goal reviews.
Long-term success depends more on decisions than cost.
Cost is not a risk. But lack of direction is a risk.
Focus More on Strategy Than Product
Keep clear goals like retirement, kids’ education, etc.
Match SIPs to each goal with proper tenure.
Allocate across equity, debt, hybrid as per risk profile.
Stay invested for full tenure. Don’t panic during market dips.
Don’t chase returns, focus on disciplined investing.
That’s how wealth is truly created.
Taxation Rules to Know
LTCG above Rs. 1.25 lakh in a year is taxed at 12.5%.
STCG is taxed at 20% for equity mutual funds.
Debt fund gains are taxed as per your income slab.
If you redeem now, tax reduces your wealth.
Long-term holding avoids such tax leakage.
Key Benefits of Using a Certified Financial Planner
You get a roadmap for all financial goals.
Periodic portfolio review is done professionally.
Correct asset allocation is maintained for all stages.
Tax planning and goal planning are integrated.
You stay on track emotionally and financially.
Over time, their value is much higher than cost.
Direct Plans May Not Be for Everyone
It needs time, interest, and high investment knowledge.
Mistakes can cost more than expense ratio savings.
Switching funds wrongly can hurt performance.
Ignoring rebalancing can derail the plan.
That’s why many smart investors still prefer regular plans.
Important Don’ts
Don’t rush to switch the entire portfolio.
Don’t redeem now just to shift to direct.
Don’t go only by cost difference. Look at value too.
Don’t invest without a goal or plan.
Don’t let news or fear guide your actions.
360-Degree Recommendation
Stay invested in your regular plans.
Don't disturb your gains with tax and exit loads.
Start new SIPs in direct funds only if you’re confident.
Else, continue with regular funds for support and guidance.
Ensure all your investments are linked to goals.
Track your progress yearly with help from a planner.
Mix cost savings with smart planning, not only low cost.
Finally
You have built a good foundation already.
What matters more now is maintaining discipline.
Small cost differences won’t hurt if strategy is right.
Avoid emotional decisions and continue long-term focus.
Use professional support to make your money work smart.
Every year, review with a certified financial planner.
Let your portfolio grow calmly, with strategy and patience.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Your long-term horizon of 20 years is also a big strength.
Let us now go step-by-step and understand what’s best for you.
Current Portfolio Snapshot
Your total investment is around Rs. 20 lakhs.
Current value is around Rs. 21 lakhs.
All investments are in regular mutual funds.
You plan to continue investing for up to 20 more years.
Your Main Concern
You found that regular mutual funds have higher expense ratios.
You worry this cost will reduce your wealth in the long run.
You are thinking about shifting to direct mutual funds.
You are considering two actions:
Stop current SIPs and start new SIPs in direct funds
Or redeem all and reinvest in direct funds
Your Approach:
You have shown good financial awareness.
Long-term investing is the right strategy.
Evaluating costs and value is a smart investor’s habit.
Wanting to avoid surprises later is a thoughtful move.
You are trying to protect future returns.
That deserves appreciation and respect.
Understanding Expense Ratios
Yes, regular funds have higher expense ratios than direct funds.
The difference may look small yearly.
But over 15–20 years, it can become meaningful.
Yet, cost is only one part of investing.
Let us now look at the full picture.
What You May Lose in Direct Mutual Funds
No certified financial planner to guide your journey.
You must monitor all funds and markets yourself.
Asset allocation, SIP review, and fund performance – all by yourself.
In stressful markets, decisions get tougher.
Many investors switch wrongly in panic.
Lack of hand-holding can cost more than expense ratio.
What You Gain in Regular Mutual Funds
You get help from mutual fund distributors with CFP knowledge.
They help in choosing the right fund and goal planning.
Also help in reducing taxes and increasing efficiency.
Provide motivation during weak market cycles.
That support can increase your long-term returns.
In fact, emotional mistakes avoided often cover the extra cost.
Should You Stop Existing SIPs?
If you feel confident managing investments, you can consider it.
Stop regular SIPs and start direct SIPs from today.
That way, no tax is triggered now.
Also, you don’t disturb existing investments.
This gives you time to test and compare performance.
You can move slowly and with comfort.
Should You Redeem and Reinvest in Direct Funds?
Not recommended immediately.
Redemption may trigger capital gains tax.
Short-term capital gains are taxed at 20%.
Long-term capital gains above Rs. 1.25 lakh are taxed at 12.5%.
You may also lose indexation benefit in some debt funds.
Exit load may apply if units are sold within 12 months.
Also, market timing risk if funds are redeemed and reinvested wrongly.
A Balanced Solution That Works
Don’t disturb existing regular funds.
Continue holding them for long term.
Avoid booking gains unless needed for goals.
Start fresh SIPs in direct funds if you are confident.
This way, you mix both approaches.
Slowly compare and learn before switching completely.
You avoid taxes, exit load, and rushed decisions.
Professional Support vs. Lower Cost
Direct funds save cost but demand skill and discipline.
Regular funds offer experience, planning, and structured help.
Without guidance, you may miss rebalancing and goal reviews.
Long-term success depends more on decisions than cost.
Cost is not a risk. But lack of direction is a risk.
Focus More on Strategy Than Product
Keep clear goals like retirement, kids’ education, etc.
Match SIPs to each goal with proper tenure.
Allocate across equity, debt, hybrid as per risk profile.
Stay invested for full tenure. Don’t panic during market dips.
Don’t chase returns, focus on disciplined investing.
That’s how wealth is truly created.
Taxation Rules to Know
LTCG above Rs. 1.25 lakh in a year is taxed at 12.5%.
STCG is taxed at 20% for equity mutual funds.
Debt fund gains are taxed as per your income slab.
If you redeem now, tax reduces your wealth.
Long-term holding avoids such tax leakage.
Key Benefits of Using a Certified Financial Planner
You get a roadmap for all financial goals.
Periodic portfolio review is done professionally.
Correct asset allocation is maintained for all stages.
Tax planning and goal planning are integrated.
You stay on track emotionally and financially.
Over time, their value is much higher than cost.
Direct Plans May Not Be for Everyone
It needs time, interest, and high investment knowledge.
Mistakes can cost more than expense ratio savings.
Switching funds wrongly can hurt performance.
Ignoring rebalancing can derail the plan.
That’s why many smart investors still prefer regular plans.
Important Don’ts
Don’t rush to switch the entire portfolio.
Don’t redeem now just to shift to direct.
Don’t go only by cost difference. Look at value too.
Don’t invest without a goal or plan.
Don’t let news or fear guide your actions.
360-Degree Recommendation
Stay invested in your regular plans.
Don't disturb your gains with tax and exit loads.
Start new SIPs in direct funds only if you’re confident.
Else, continue with regular funds for support and guidance.
Ensure all your investments are linked to goals.
Track your progress yearly with help from a planner.
Mix cost savings with smart planning, not only low cost.
Finally
You have built a good foundation already.
What matters more now is maintaining discipline.
Small cost differences won’t hurt if strategy is right.
Avoid emotional decisions and continue long-term focus.
Use professional support to make your money work smart.
Every year, review with a certified financial planner.
Let your portfolio grow calmly, with strategy and patience.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - May 02, 2025 | Answered on May 05, 2025
Thanks a ton. Your insights were indeed valuable.
Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
MoneyReply
आप नीचे ऐसेही प्रश्न और उत्तर देखना पसंद कर सकते हैं
Omkeshwar Singh | Answer |Ask -Follow
Head, Rank MF - Answered on Dec 14, 2021
Ulhas Joshi |280 Answers |Ask -Follow
Mutual Fund Expert - Answered on Jun 30, 2023
Ramalingam Kalirajan |10872 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 08, 2024
नवीनतम प्रश्न
Radheshyam Zanwar |6735 Answers |Ask -Follow
MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 06, 2025
Dr Nagarajan J S K |2576 Answers |Ask -Follow
NEET, Medical, Pharmacy Careers - Answered on Dec 06, 2025
Mihir Tanna |1090 Answers |Ask -Follow
Tax Expert - Answered on Dec 06, 2025
Asked by Anonymous - Dec 04, 2025English
Ramalingam Kalirajan |10872 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Dec 06, 2025
Radheshyam Zanwar |6735 Answers |Ask -Follow
MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 06, 2025
Radheshyam Zanwar |6735 Answers |Ask -Follow
MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 06, 2025
Radheshyam Zanwar |6735 Answers |Ask -Follow
MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 06, 2025
Dr Dipankar Dutta |1837 Answers |Ask -Follow
Tech Careers and Skill Development Expert - Answered on Dec 05, 2025
Dr Shyam Jamalabad |108 Answers |Ask -Follow
Dentist - Answered on Dec 05, 2025
Dr Shyam Jamalabad |108 Answers |Ask -Follow
Dentist - Answered on Dec 05, 2025
