Do I pay my mutual fund distributor a separate fee?

No. An AMFI MFD on a commission model is paid by the Asset Management Company out of the fund's expense ratio, not billed to you separately. You see no separate charge on your statement.

How is an Authorised Person of a broker paid for equity trades?

For equity, F&O and other broking, brokerage is charged by the broker (Kotak Securities) per its published fee schedule. The Authorised Person earns a share of that brokerage. The AP facilitates introductions and service but does not hold client funds or execute trades independently.

How Does a Mutual Fund Distributor Get Paid? Full Fee Transparency

Q: How does a mutual fund distributor get paid in India?

An AMFI Registered Mutual Fund Distributor (MFD) earns a trail commission, typically 0.3–0.7% per year, paid by the Asset Management Company from the fund's expense ratio. The investor does not pay the distributor separately. The commission continues only while the investor stays invested.

Q: What is the difference between a regular plan and a direct plan?

A direct plan has no distributor commission, so its expense ratio is lower by roughly 0.3–0.7%. A regular plan includes that trail commission, which pays for distributor services like KYC support, nominee audits, portfolio reviews, behavioural coaching and transmission help. The difference is the cost of ongoing professional guidance.

Mutual Fund Distribution

Trail commission of 0.3–0.7% per year

I earn a trail commission, paid by the Asset Management Company (AMC) from the fund's expense ratio. You do not pay me separately — there is no charge on your statement, no upfront fee, nothing billed to you. This commission continues only as long as you remain invested.

The difference between a regular plan and a direct plan is precisely this commission. In exchange for it, you receive KYC support, nominee audits, portfolio hygiene reviews, IEPF recovery assistance, behavioural coaching during market corrections, and transmission help for your family — for the entire life of the investment.

If you never need help and never make a mistake, a direct plan is cheaper. The trail commission is the price of having someone answer the phone when life — or the market — gets complicated.

Equity, F&O & Demat (via Kotak Securities)

Brokerage per Kotak's published schedule

For equity, futures & options, ETFs and other broking, brokerage is charged by Kotak Securities Ltd as per their published fee schedule. As an Authorised Person (AP), I earn a share of that brokerage.

Importantly: as an AP I facilitate introductions and ongoing service — I do not hold client funds or execute trades independently. Your demat account and money sit with Kotak Securities (SEBI Reg. INZ000200137), not with me.

Insurance (via InsuranceDekho)

Standard IRDAI commission, built into the premium

For insurance, I operate as an IRDAI-certified PoSP (Point of Sale Person) through InsuranceDekho. Commission is the standard regulated rate built into the policy premium, paid by the insurer — never an extra charge to you. I always recommend keeping insurance and investment separate, so any insurance suggestion is about protection, not returns.

Why I'm Telling You All of This

Most investors never ask how their distributor is paid, and most distributors never volunteer it. I think that's backwards. When you understand exactly how I earn, you can judge for yourself whether the service is worth the cost — and hold me accountable for delivering it.

The trail-commission model also aligns our interests in a specific way: I only keep earning if you stay invested and your portfolio grows. I have no incentive to churn your funds or push one-time products. The honest tension to acknowledge is that a regular plan does cost slightly more than direct — and for a confident, self-directed investor who never needs support, direct plans are the rational choice. For families who value having a named professional handle KYC freezes, nominee gaps, IEPF recovery and the steadying hand during a crash, the regular-plan cost is usually money well spent.

Frequently Asked Questions

How does a mutual fund distributor get paid in India?

An AMFI Registered MFD earns a trail commission, typically 0.3–0.7% per year, paid by the AMC from the fund's expense ratio — not billed to you separately. It continues only while you stay invested.

What is the difference between a regular plan and a direct plan?

A direct plan carries no distributor commission, so its expense ratio is lower by roughly 0.3–0.7%. A regular plan includes that commission, which funds ongoing distributor services. The difference is the cost of professional guidance.

Do I pay my distributor a separate fee?

No. On the commission model, the AMC pays the distributor from the expense ratio. You see no separate charge.

How is a broker's Authorised Person paid for equity?

Brokerage is charged by the broker (Kotak Securities) per its published schedule; the AP earns a share. The AP facilitates and services but does not hold funds or execute trades independently.

Questions about costs? Ask directly.

No sales pitch — just a straight answer about what you'd pay and what you'd get.

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