You pay us nothing. Here is who does, and what that costs you.
Most people never ask how their mutual fund distributor earns, and most distributor websites never volunteer it. The mechanics are not complicated, and the conflict of interest they create is real enough to be worth stating in full.
A mutual fund distributor in India is paid a trail commission by the asset management company, calculated on the value of your investment and taken from the scheme’s expense ratio. You are never billed separately. Since 2018 no upfront commission is permitted, so the distributor earns only while you stay invested.
How the money actually moves
The AMC pays, not you
Commission comes out of the fund’s expense ratio, which is deducted inside the scheme before your returns are declared. No invoice reaches you, and nothing is deducted from your bank account.
It is a trail, not a one-off
SEBI removed upfront commissions in October 2018. Distributors now earn a percentage each month on the current value of what you hold, which means we are paid for as long as you stay invested and nothing for selling.
It scales with your portfolio, not your transactions
Because the rate applies to value rather than to trades, churning your portfolio earns us nothing extra. It is the one part of the structure that genuinely aligns the two sides.
What a trail commission typically comes to
These are industry-wide rates, not ours specifically. They move with the fund house and the category, which is exactly why the next section exists.
Where the conflict of interest actually sits
Trail rates are not uniform. They differ between fund houses and between categories, and an equity fund can pay several times what a liquid fund pays on the same rupee. A distributor who moves you from a liquid fund into an equity fund is, all else equal, better off.
That is the conflict, and no amount of wording removes it. What can be done is to make it visible, so you are able to price it into the advice you are given.
- We tell you the trail rate on anything we recommend, before you invest, not after.
- You can ask what we earn on your portfolio at any review, and the answer is a number, not a paragraph.
- Where a direct plan is plainly the better answer for you, we will say so, and we earn nothing on it.
What we are not paid for
- The first conversation. No fee, no obligation.
- The written plan that comes out of it, whether or not you go ahead.
- Reviewing insurance policies you already hold, including ones bought elsewhere.
- Half-yearly reviews once you are a client.
Accounting and tax work is different: it is billed to you directly, and the fee is quoted and agreed before any work starts. We do not begin and invoice afterwards.
Insurance works the same way, under a different regulator
Insurers pay commission to the intermediary out of the premium, at rates capped by IRDAI and varying by product and policy year. Term cover pays less than most savings-linked products, which is worth knowing, because term cover is what most families actually need.
More on cover and how we review it on the insurance advice page.
Fees, direct plans and what we earn
Yes, and the difference is visible. A regular plan carries a higher expense ratio than the direct plan of the same scheme, and that gap is roughly the distributor commission, commonly 0.5 to 1 percent a year on equity funds. What you are buying for it is advice.
Cheaper, yes, by the amount of the commission. Better is a separate question. A direct plan with the wrong asset allocation, or one abandoned during a drawdown, costs far more than the fee it saved. If you will do the work yourself and hold your nerve, direct is the rational choice.
Yes. Ask at any review and we will give you the rate on each holding and what it came to over the period. Consolidated account statements from CAMS and KFintech also show commission paid to the distributor on your folios.
No. We are a distributor, not a SEBI-registered investment adviser, and we are not permitted to charge you an advisory fee on mutual funds while earning commission on them. Accounting and tax work is quoted and billed directly, and that is stated before work begins.
They rewarded selling rather than holding, which encouraged distributors to move clients between schemes for a fresh payout. SEBI moved the industry to an all-trail structure in October 2018, so income now depends on investors staying invested.
Rules and rates on this page come from the regulators rather than from us: SEBI, the Securities and Exchange Board of India, AMFI, the Association of Mutual Funds in India, IRDAI, the insurance regulator. Commission rates are set by each asset management company and change over time, so treat the ranges above as the shape of the thing rather than a quote.
Ask us what a recommendation pays us
It is a fair question and it has a short answer. Ask it before you invest, not after, and ask it of anyone advising you, not only of us.
- Reply within one working day
- No product pitch
- AMFI & IRDAI registered
- A 30-minute call about your goals
- A written plan, with the reasoning
- You decide — no obligation