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Should one move out entirely from regular plans?

Dhirendra Kumar talks about the framework one should look at while deciding the suitability of direct plans and how to make the switch

Would you suggest shifting from all regular plans to direct plans?
- Santosh Bhosle

If you take all your investment decisions yourself, your advisor is not helping you coach, or you don't bank on him for coaching you, and if you think that you are confident and capable enough to make your own choice, you will have the discipline, you won't need hand-holding, then you should go for a direct plan.

Then comes the mechanics of doing it. If you are switching from a regular plan to a direct plan, you should keep in mind two things after considering the variables mentioned above. One is to look at the tax implication of moving your money from a regular to a direct plan because, tax-wise, it is treated as a redemption and a new purchase. So that will have a bearing. All the gains that you will realise will get reduced by 10 per cent in the sense that 10 per cent of your gains will go by way of taxes. The money will start working from thereon. The other is that the money made within the last year, equity investments particularly, might be subject to an exit load. So be wary of that. Plan things accordingly.

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