Hi, i have mutual fund of 14 Lakh with annualized return of 20%, and this is combination of multiple funds like small, mid, large and flexi. Every month i am investing 5k in each fund total monthly mf investment is 30k. Recently i noted that i have many fund in regular instead of direct. I started this mf sip without any base knowledge so that time i was not aware that what is direct and regular. Now, i have some exposure on this, i want to switch this regular fund to direct, is that possible, if yes, what needs to be done. Few of them are Elss fund so if I switch, then do i need to serve the waiting period and if I switch exit load and other charges applicable which will reduce my over all portfolio growth. Kindly help me handle this. Thank you

Ans: Shift 2 to DSP Mid cap fund – Growth; rest are fine and can be continued.

Ans: Yes, you can do that but it will actually be in the form of selling the regular mode fund units and buying the direct mode fund units as per their respective prevalent NAVs.
So, exit load and/or taxation if and as due on the sale of the regular fund will be applicable.

Ans: It's great to hear that you've been investing in mutual funds regularly for the past 5 years. When considering whether to switch from regular to direct funds, it's essential to weigh the benefits and drawbacks of each option.

While direct funds typically have lower expense ratios compared to regular funds, they may not provide the same level of guidance and support that you receive from investing through an intermediary. With regular funds, you have access to the expertise and assistance of a financial advisor who can offer personalized advice tailored to your financial goals and risk tolerance.

Given your investment journey so far and the importance of having guidance, I would recommend sticking with regular funds for now. If you're looking to optimize costs, you can explore the possibility of negotiating lower fees with your intermediary or considering other intermediaries who offer competitive rates without compromising on the quality of service.

Ultimately, the decision depends on your preferences and investment objectives. If you value the support and guidance provided by your intermediary, it may be worthwhile to continue investing in regular funds through their platform.

I hope this helps clarify your options. If you have any further questions or need assistance, please feel free to reach out.

Ans: You can sell with the advisor that you are with and directly make a purchase on the website of the AMC
There are a couple of more ways to do this, kindly talk to your advisor for the same as he can guide you in a much better way

Ans: You have built a substantial mutual fund portfolio worth ?10 lakhs, with a consistent SIP of ?50,000 for the past five years. Transitioning from Regular to Direct mutual funds can seem appealing due to lower expense ratios. However, it’s important to weigh the benefits of staying with Regular plans.

Key Advantages of Regular Mutual Funds
While Direct plans have lower expense ratios, Regular plans offer several significant benefits, especially when you work with a competent Mutual Fund Distributor (MFD):

1. Professional Guidance
Expertise and Advice:

A good MFD provides expert advice tailored to your financial goals and risk appetite. This guidance can help optimize your investment strategy.
Regular Reviews and Rebalancing:

MFDs regularly review and rebalance your portfolio. This ensures your investments stay aligned with your financial objectives and market conditions.
2. Convenience and Support
Administrative Assistance:

MFDs handle the paperwork and administrative tasks associated with your investments. This convenience can save you time and effort.
Ongoing Support:

They offer ongoing support and answer queries, making the investment process smoother for you.
3. Access to Research and Insights
Market Research:

MFDs provide access to detailed market research and insights. This information can help you make informed investment decisions.
Fund Selection:

They assist in selecting the right mutual funds from a plethora of options, ensuring a well-diversified portfolio.
Evaluating Your Current MFD
If you feel your current MFD is not adding value, it’s crucial to reassess their services. Here are steps to consider:

1. Assess Their Performance
Review Your Portfolio:

Evaluate the performance of your portfolio. Compare it with benchmark indices and peer funds to gauge effectiveness.
Check Their Services:

Assess the range and quality of services provided by your MFD. Are they proactive in managing your investments?
2. Seek a Competent MFD
Research and Recommendations:

Look for MFDs with a strong track record and positive client testimonials. Seek recommendations from friends or family.
Professional Credentials:

Ensure the MFD has relevant qualifications and certifications. This can indicate a higher level of expertise and professionalism.
3. Transitioning to a Better MFD
Transfer Your Investments:

If you decide to switch, the new MFD can help transfer your existing investments seamlessly. They will handle the paperwork and formalities.
Set New Goals:

Work with your new MFD to set clear financial goals and strategies. Regular reviews and adjustments will keep your portfolio on track.
Conclusion
While Direct plans offer lower expense ratios, the benefits of staying with Regular mutual funds, especially with a proficient MFD, can outweigh the cost savings. Expert advice, convenience, and access to market insights are valuable advantages. If your current MFD isn’t meeting your expectations, consider transitioning to a more competent professional to ensure your investments are well-managed and aligned with your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in