RIA vs MFD: Who Would You Choose & Trust for Wealth Management?

Hey everyone! If you had to pick a professional for wealth management, **who would you choose?** I am doing research for a new venture need your help understand the market and public opinion. ### 🔹 MFD (Mutual Fund Distributor) * Earns **commissions** from mutual fund companies. * **No direct fee** from the client, but earns via **regular plans** (higher expense ratio). * Can only advise on **mutual funds** (NOT stocks, bonds, real estate, or taxation). * Typically earns **0.5% - 1% trail commission** per year on assets under management (AUM). * Works under **AMFI** regulations. ### 🔹 RIA (Registered Investment Advisor) * **Fee-based model** (fixed fee or AUM-based, capped at ₹1.25 lakh per year or 2.5% of AUM). * Provides **holistic financial planning** for **ALL assets** – stocks, bonds, mutual funds, real estate, tax planning, estate planning, insurance & more. * Suggests **direct mutual fund plans** (lower expense ratio, no distributor commission). * Works under **SEBI** regulations and follows strict compliance. * Provides **holistic financial planning** for **ALL assets**, not just mutual funds, even helps with tax planning. ## 💰 How Much Does It Cost? (Example: ₹50,000 per month for 25 Years 🚀) Let’s assume you invest **₹50,000 per month** for **25 years** at **12% annual returns**. ### MFD Model (Regular Plan – 1% trail commission + AMC fees) * Final corpus: **₹8.14 Cr** * Total commission paid to MFD: **₹1.24 Cr** 💸 * AMC fees (1% of AUM over 25 years): **₹1.32 Cr** ### RIA Model (Direct Plan – No Commission, RIA charges ₹50,000 per year) * Final corpus: **₹9.58 Cr** * Total fee paid to RIA: **₹12.5 Lakh (₹50,000 × 25 years)** * AMC fees (0.5% of AUM over 25 years): **₹69 Lakh** ### Comparison: RIA vs MFD * **RIA Model gives ₹1.44 Cr extra wealth** 📈 * **MFD model costs ₹1.24 Cr in commissions!** So, an RIA **saves you crores in the long run**, but you **pay a fixed fee upfront**. Feel free to write your opinion in comments, tell me your perspective about it. [View Poll](https://www.reddit.com/poll/1invfb4)