lot of HNIs will migrate to the direct plans,” said K Ramesh Bhat, president, IFA Galaxy, an independent body of financial advisors. “We have been talking to a lot of fund houses and they say the difference would be somewhere between 30 bps and 50 bps.”
AMCs have been asked to provide a separate plan for direct investments in existing as well as new schemes by January 1, 2013, as per the Sebi circular.
It further states that such a separate plan shall have a lower expense ratio, excluding distribution expenses and commission, and no commission shall be paid from such plans. The plan shall also have a separate NAV.
Winds of change
* Institutional investors can save about 40-50 basis points on commission if they choose to go direct
* Institutional investors invest more than 90% of money in liquid funds and ultra short-term debt funds
* HNIs will migrate to direct plans if difference in NAV between direct and normal plans more than 50 bps