# the finder's fee you pay forever

_Systematic Investing . 2026-06-10 . By Tanmay Kurtkoti. Educational, illustrative, not advice._

A friend has held the same equity fund for years. He bought it through his bank relationship manager, picked it once, and never thought about it again. He thinks his only cost is the market having a bad year now and then.

What he does not know is that the RM still takes a slice of his holding. Every single year. For doing nothing since the sale.

It is called a trail commission, and here is the part most people miss. Direct and Regular plans are the same scheme. Same manager, same stocks, same NAV, same everything. The only difference is that the Regular plan's expense ratio carries the trail commission paid to whoever sold it to you. For an active equity fund that gap is usually about one percentage point a year.

One point sounds like rounding error. So I ran it.

Rs 10 lakh, twenty years, identical 12 percent gross return on both. The Direct plan keeps 11.5 percent and grows to about Rs 88.2 lakh. The Regular plan keeps 10.5 and grows to about Rs 73.7 lakh. That one point of fee did not cost one percent of the money. It cost Rs 14.5 lakh, almost one and a half times the original cheque.

Here is why the damage is so much bigger than the fee. A fee is not a one-time cost, it is a compounding leak. Every rupee skimmed this year is a rupee that never grows in any of the years after. On a Rs 50 lakh holding, a one percent trail is Rs 50000 walking out the door annually. No bill arrives. No line item you ever sign.

None of this means a distributor is a villain. The trail is fair payment if real advice is actually arriving, someone reviewing your portfolio, rebalancing, talking you out of panic selling. The leak is the case where a fund was sold once and the person went quiet, and the commission keeps coming anyway.

The market is the part you cannot control. The plan you are sitting in is the part you can. Open the factsheet. If it does not say Direct, you already know which door you walked through.

See the full cost stack side by side: