Let's name the assumption directly, because it's probably why you clicked on this post: you suspect a financial advisor or distributor is mostly interested in earning a commission off you, and that suspicion alone has stopped you from ever seriously exploring whether the help would be worth it.
That suspicion is fair. Distributors do earn commission. The problem isn't that the concern exists, it's that most people never see the actual number, so it stays vague and a little sinister in their head instead of being something they can weigh honestly against what they'd get in return.
So here's the number, in plain terms, with nothing hidden.
Quick Summary
There's no separate bill or consultation fee to work with A2 Wealth. Compensation comes entirely from a trail commission already built into the fund's Total Expense Ratio (TER), which is why a "regular plan" costs slightly more than the same fund's "direct plan," and why there's nothing additional invoiced to you on top of that. This post breaks down:
- Whether it costs anything extra to consult A2 Wealth, answered directly
- Exactly how the commission works and where it shows up
- What the actual rate gap looks like between a direct plan and a regular plan over time
- What that cost difference is realistically buying you
Quick Answers
Does it cost anything extra to consult A2 Wealth? No. There's no consultation fee, no advisory charge, no separate invoice. A2 Wealth's compensation comes entirely from the standard trail commission already built into a fund's regular plan, the same commission every distributor earns industry-wide. You never pay anything beyond what's already reflected in the fund's published expense ratio.
Does A2 Wealth earn commission on the funds it recommends? Yes. A2 Wealth operates as a Mutual Fund Distributor, compensated through the standard trail commission built into a fund's regular plan. This is disclosed, industry-standard, and already reflected in the fund's published expense ratio; it isn't a separate fee charged to you.
How much more expensive is a regular plan than a direct plan? Typically in the range of 0.5% to 1% of your investment value per year, depending on the fund category, though the exact figure varies by scheme and is published in every fund's factsheet.
Is going fully DIY on an app actually cheaper? In the narrowest sense, yes, a direct plan avoids the commission entirely. Whether it's cheaper overall depends on whether the money you save on commission gets offset by mistakes a coordinated plan would have caught: wrong fund choices, unnoticed overlap, or panic-selling during a downturn.
(Full answers to these and more are in the FAQ section below.)
How a Mutual Fund Distributor Actually Gets Paid
A mutual fund distributor's income comes from a trail commission that's already built into the fund's Total Expense Ratio (TER), the annual charge every investor in that fund pays, regardless of whether they invested through a distributor or on their own. This is exactly why the same mutual fund scheme exists in two versions: a "regular plan," which includes this commission, and a "direct plan," which doesn't.
There's no separate invoice, no advisory fee handed to you at the end of the year. The cost is simply the small difference in TER between the regular and direct versions of the same fund, and it's published in every scheme's factsheet, publicly disclosed under SEBI's expense ratio regulations.
For equity mutual funds, this gap typically runs somewhere between 0.5% and 1% of your invested value annually. For debt funds, it's usually smaller. The exact number varies by scheme, so the only honest way to know your specific cost is to check the factsheet of the fund you're actually holding.
What Does That Gap Actually Cost You Over Time?
A 0.5% to 1% annual gap sounds small, but return rates compound, so even a modest gap between a direct plan's return and a regular plan's return widens every year you stay invested. An illustrative 12% annual return in the direct plan versus 11.3% in the regular plan (a 0.7% TER gap, roughly in the typical range for equity funds) doesn't look like much in year one. Held for 15 to 20 years, that gap in rate compounds into a meaningfully larger gap in outcome. This is illustrative only, based on assumed rates of return, and actual outcomes will vary; past performance never guarantees future results.
That gap is real, and the commission behind it is not free. But a rate gap only tells you what you're giving up on paper. It doesn't tell you what you might be giving up in practice by managing everything alone, which is the other half of this comparison.
A direct plan gives you the exact same underlying fund. What it doesn't give you is anyone checking whether that fund actually fits your goal, whether you've accidentally bought three funds that hold largely the same stocks, or a steadying voice when markets fall 20% and every instinct says to sell.
Global research on investor behavior consistently finds a gap between the returns a fund itself generates and the returns its actual investors realize, largely because of poorly timed entries, exits, and switches driven by emotion rather than plan. This is a general, well-documented pattern, not a guarantee about any individual's outcome, but it's a real cost that a purely DIY approach doesn't shield you from, and it can easily exceed the TER gap in a bad year.
The honest framing: a direct plan saves you a small, visible, published rate every year. A regular plan with genuine coordination behind it is a bet that avoiding one or two costly mistakes over the years is worth more than that saved rate. Whether that bet is worth it for you depends entirely on how confident you are in managing the coordination yourself.
Not sure if the cost is worth it for your situation? We'll tell you honestly. This isn't about convincing you commission is a bargain. It's about looking at what you actually hold and whether the coordination is worth the published cost gap for you specifically. Talk to A2 Wealth →
Where to Go From Here
If the cost question is resolved but you're still working out whether your specific situation is complex enough to need this at all, Should I Hire a Financial Advisor or Manage My Investments Myself? is the fuller version of that question.
If cost wasn't really the blocker and it's more about timing, whether now is actually the right moment, When Should You Hire a Financial Advisor? A Beginner's Guide walks through the life events that tend to signal it.
Frequently Asked Questions
Does a financial advisor or distributor charge a separate fee in India?
A Mutual Fund Distributor, which is what A2 Wealth is, doesn't charge a separate fee. Compensation comes from a trail commission already built into the fund's regular plan, reflected in its published Total Expense Ratio. There's no additional invoice on top of that.
What's the difference between a direct plan and a regular plan?
They hold the exact same underlying investments. The only difference is the expense ratio: a direct plan excludes distributor commission, so its TER is lower, while a regular plan includes it. Over long periods, this small rate gap compounds into a meaningfully larger difference in outcome.
How much commission does a mutual fund distributor typically earn?
It varies by fund category and scheme, but for equity mutual funds it's commonly in the range of 0.5% to 1% of the invested value annually, reflected as the TER gap between the regular and direct plans. The exact figure for any fund is published in its factsheet.
Is it always cheaper to invest directly through an app instead of using a distributor?
In terms of the published expense ratio alone, yes, a direct plan is cheaper. Whether it's cheaper overall depends on what the coordination from a distributor would have prevented: a wrong fund choice, unnoticed overlap between funds, or a panic-driven decision during a market downturn. That value is real but harder to put a single number on.
Should I switch my existing regular plan funds to direct plans to save money?
It's worth checking your factsheets to understand the exact gap you're paying, but switching also has its own considerations, including possible tax implications on any gains at the time of the switch. This is a decision worth thinking through carefully rather than acting on the cost gap alone.
Want to talk?
If you'd like to see this cost-versus-value tradeoff applied to your own actual portfolio rather than a general example, get in touch with A2 Wealth.