New data suggests that investors in regular mutual fund plans, supported by distributors, tend to stay invested for longer periods than those who opt for direct plans, underscoring the behavioural anchor role of intermediaries amidst India’s rapid industry growth.
The latest data on systematic investment plans suggests that investors using regular mutual fund plans tend to stay invested for longer than those who choose direct plans. According to figures cited by Singh, 34% of SIP assets in regular plans have been held for more than 5 years, compared with 20% in direct plans. That gap points to a stronger long-term orientation among regular-plan investors, at least in the holding patterns now visible in the industry.
Singh argued that the numbers underline the continuing value of distributors as a behavioural anchor, especially when markets are volatile. Investors, he said, can be tempted to stop SIPs, redeem holdings or shift into recently outperforming funds and asset classes when sentiment changes. A distributor, in his view, can offer perspective and help keep decisions tied to long-term goals rather than short-term market moves.
The data does not prove that regular plans inherently produce better outcomes or that distributor involvement alone causes investors to remain invested longer. It does, however, show a clear difference in behaviour between regular and direct plan investors. The distinction matters because the two routes are structured differently: regular plans include distributor support, while direct plans are bought without that intermediary and typically carry lower costs.
The broader backdrop is one of rapid expansion in India’s mutual fund industry. Industry assets under management have climbed to around ₹85 lakh crore, while mutual fund folios have crossed 27 crore and unique investors have topped 6 crore. Even now, about 71% of assets held by retail and high-net-worth investors still come through distributors, suggesting that the advisory channel remains deeply embedded in how many households invest.
That broader trend is echoed in other recent industry reporting. Business Standard said in May that 33% of regular-plan SIP assets and 19% of direct-plan SIP assets had been held for more than 5 years, while Financial Express also reported similar figures and linked the pattern to the discipline that distributor-led advice can provide during periods of market stress. Cafemutual has likewise reported that a majority of SIPs continue to come from regular plans, reinforcing the view that many investors still value guided participation over going it alone.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
