I don’t think regular folks are doing any hand holding either (barring a few maybe), more often than not, it is a mere 'Hand shake" point to a Fund to invest and don’t care later.
Top distributors seem to be banks (who also happen to be AMCs) who just promote it as a product to gullible customers, so that they can increase their bottom line, just like how ULIPs are being promoted in disguise without disclosing their true nature.
Why would a regular plan distributor expect a perpetual commission for a one time guidance or finger pointing ?
An expense ratio is justified given that there is active management of the fund, what does the distribution commission agent do to justify a yearly commission for a one time activity ?
I would be okay with paying a commission to a distributor of a regular plan, provided it was collected only once at the time of providing the guidance regarding the funds to invest.
Why get greedy and take a piece of the pie every year, irrespective of performance of the fund recommended ?
I just want to tag this thread which talks about the commission on regular plan
“Why should I consider the accumulated wealth? When pay commissions for the investment made in the past? MF investment is for the long term, it implies there should be no any meddling with the MF portfolio, so why pay commissions perpetually to the agent for nothing? What subsequent role is the agent playing here?”
Data from CAS - know how much commissions you pay
Okay, some may not understand market or the product, but It is not as if a distributors of a regular plan guarantees the performance of the fund that they recommend or take responsibility if the fund performs badly.
Mostly probably if the customer is not satisfied with a fund, they recommend another fund and charge commission on that, totally ignoring the fact that their initial recommendation was not that great.