Most people assume financial advice or financial products cost little or nothing. But here’s the real cost behind different ways of investing. Let’s look at mutual fund investing in India.
Mutual funds have two options:
1. Direct option – bought directly from the mutual fund house or through Registered Investment Advisers (RIAs).
2. Regular option – bought through Mutual Fund Distributors such as individual/corporate agents or banks.
Regular option funds include marketing and distribution expenses embedded in the product itself, and typically cost 0.25% to 1.50% p.a. more than the Direct option.
Now, let’s consider an investor investing in Flexicap or Large Cap mutual funds—categories commonly used by most investors.
1. Do-It-Yourself (DIY) Investor
Investor manages transactions and research independently. Thinks they can handle everything alone.
Uses: Direct mutual funds
Average cost: ~0.75% p.a.
2. Engaging Mutual Fund Distributor
Investor feels the advice is “free” as there is no explicit fee, but the cost is built into the product.
Documentation is done by the distributor (offline or online).
Uses: Regular mutual funds
Average cost: ~2% p.a.
3. Engaging Fee-Only Adviser (Registered Investment Adviser)
Fee only Adviser uses simple, low-cost passive and active funds with transparent fee structure.
Fund expense: ~0.25–0.5% p.a.
Adviser fee: ~0.25–0.5% p.a. Average total cost: ~0.75% p.a.
No commissions. No conflicts. Transparent and unbiased.
Conclusion
• Working with a fee-only Registered Investment Adviser is not only economical but also free from conflicts and bias.
• DIY investing, if you’re not an expert, carries the risk of mistakes and missed opportunities.
• With complex products like Portfolio Management Schemes (PMS), Endowment/ULIP insurance plans, AIFs, etc., your costs can be significantly higher. A fee only adviser will rarely suggest complicated options.
• A fee-only adviser does not restrict advice to mutual funds but guides you on insurance, loans, financial planning, banking products, global portfolios, REITs, gold, stocks, ETFs, bonds, and more.
No matter whether your wealth is ₹5 lakh or ₹500 crore, a fee-only financial planner remains the most economical and unbiased choice.
Because in money matters, nothing is truly free. If you'd like to understand our fee-only financial planning and wealth management model, we invite you to connect with us. Reach our team at: 9740457582 for an introductory meeting.
Happy Financial Planning!
Naveen Julian Rego – CFP®
MD & Principal Officer
Naveen Rego Capital
Financial Planning | Investment Advisory | Wealth Management
Date: 27-11-2025
Disclaimers:
1. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.
2. Registration granted by SEBI, membership of BSE and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
3. Financial products recommended by us which are under the jurisdiction of other regulators are beyond the scope of SEBI’s grievance mechanism.
