Mutual funds are considered to be an investment to beat Benchmark and offer decent returns compared to other instruments like PPF or FDs/RDs , there by growing investor funds. With too much awareness to investors , inflow of funds have gained pace with several SIPs opened up for long term appreciation and to meet future goals. Most Investors start their investments via an established platform like Demat A/c provider of through Brokers available/known to them in the society.

              How are the brokers and service providers offering platform to Buy/Sell mutual funds gain? Do they get some fee or commission etc.. are few questions in most of the  investor minds..Answer to these questions are "Yes", Mutual fund houses pay upfront and trail commission to brokerage houses & financial advisers. This varies from 0.5% to 3% depending the funds recommended. You can find commission disclosures from the brokerage houses for respective schemes. These payout  would increase the expense ratio of the fund houses.

             As an investor one can avoid mutual fund investments via a broker by Direct Investments and gain from higher NAV. Quick snapshot of ICICI Long term Equity Tax Saver fund NAV comparison for Direct and Normal plan is furnished below:

             

ICICI Prudential Long Term Equity Fund (Tax Saving) - Direct Plan - Growth- 293.18 (NAV as on 18-Nov-2016)

ICICI Prudential Long Term Equity Fund (Tax Saving)- Growth - 282.91 (NAV as on 18-Nov-2016)

              NAVs of Direct Plan is ~3.6% higher to regular fund sold through ARNs (Acquirer Reference Number). Considering an investment by Lumpsum. Lets take an example for an Lumpsum Investment of Rs.5000 in ICICI Long Term Tax Saving Fund between Periods 1st Sep 2015 to 1st Sep 2016. Returns of  Direct fund is 18% vs. 17% of Regular Plan.Hence please choose your investment decision wisely and reap benefits from Mutual fund Investments.

           More details can be found in below links :

          http://www.moneycontrol.com/news/mf-experts/direct-plans-vs-regular-plansmfs-which-one-is-better_1284536.html

          https://scripbox.com/blog/difference-between-a-direct-plan-and-regular-plan-in-mutual-fund-investment