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Most mutual fund investors who go 'direct' do not do so just to save costs. The biggest reason, as per a Cafemutual study, is investors’ belief in their mutual fund knowledge and investing skills. Cost is a secondary factor for most of them.
The survey was conducted among 3067 investors from across India. Of this, 1,118 investors were direct investors. When asked why they chose to invest themselves, 62% of the investors said they consider themselves knowledgeable enough to invest directly. 43% said they wanted to save costs.
Not so good experience in the past with MFD/RIA was also a common reason to ditch regular plans for direct ones. 36% of the direct investors who participated in the survey said they started investing themselves after having a not so good experience with MFDs/RIAs.
Surprisingly, a section of the respondents even found it more convenient to invest directly rather than taking the help of an MFD. In the survey, 25% of direct investors said they find it more convenient to invest and track their portfolio when going direct.
The percentages do not add up to a 100 because respondents had the option to give multiple responses.
However, investors do not generally have a not so good experience with MFDs and RIAs. Most regular plan investors were happy with their MFDs/RIAs, the survey showed. Only around 2-5% respondents rated their MFD as 'poor'.
