Direct Plan Vs. Regular plans which mutual fund plan to buy?

Direct plan or Regular plan
Amidst the volatile markets and global economic conditions, Indian #mutual fund industry has seen a steady upsurge in investments in last decade. Globally, India has established its position as an investment destination. Though Mutual Funds industry existed in India for last 30 years, its only last decade that individual investors warmed upto this investment tool.
SEBI, the regulatory authorities for equity markets in India has played a major role revamping the mutual fund industry with series of reforms and making mutual funds a transparent, low cost and high yielding instrument for individual investors. I can write a full article on the reformative steps of SEBI for the mutual fund industry which irks the players but it has only helped retail investors in gaining confidence on the investment tool.
But, in this article I would like to focus on the specific reform of splitting schemes in regular and direct plans. The move not only made a lot of news, it opened a new era low cost investing where equity direct plans cost up to 0.5 -1% less than the regular funds and 0.2% on debt funds.
What is a #direct plan and regular plan
Beginning Jan 1, 2013, all the #mutual funds mandatorily split its existing and new schemes into two with different NAVs (Unit price). The funds, when sold by the distributors were put into ‘Regular’ category, which included the upfront/trailing fee and transaction costs for the service of the broker/distributor. This is aimed at rationalizing broker’s cost for rendering his service.
‘Direct’ category for each scheme was created for investors who don’t take service of any distributor/advisor for mutual funds investment and buys from mutual fund office/online/ CAMS/KARVY App. They don’t need to pay for the extra upfront/trailing charges for the services.
Direct Vs. Regular plan
Though over time process of investing in mutual fund has become easy, but selecting the right products requires planning. Every mutual fund scheme has an investment objective and style. It is investor’s prerogative to choose right schemes based on his financial goals. However, brokers are often tempted by the upfront or trailing fee structure while suggesting funds. 
The distributors and advisors played an important role here in choosing right product mix for their clients. However, an informed investor need not require assistance on investing. Hence, SEBI proposed separate NAV for Direct funds deducting the distributor related costs.     

  
Illustration on how Rs. 10,000 grew from Jan 1, 2013 to Dc 2016 in direct Vis-à-vis regular plans
 Schemes – Largecap equity mutual fund                                               
Birla Sunlife Frontline Equity – Growth
Percentage return in 3 years
Total return
Direct plan
20.11
17624
Growth Plan
19
17014
ICICI Value Discovery  Midcap-smallcap fund
ICICI Pru Value Discovery – Growth
Percentage return in 3 years
Total return
Direct plan
18.23
17278
Growth Plan
17.19
16736
HDFC Income Fund – Debt oriented
HDFC Income Fund
Percentage return in 3 years
Total return
Direct plan
12.62
14694
Growth Plan
11.58
14188
Who should buy direct plan?
An informed investor should choose direct plans, as over 5 years the direct plans can give about 3-4 % extra return.
Alternative options?
If you are not financially savvy, take professional help on financial planning from certified advisors for a fee, and then buy mutual funds direct plans. But if you still require assistance in buying and managing your investments, you should buy with help of broker/distributor and choose ‘Regular’ plans. 
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