Become Mutual Fund Distributor and Earn without any investment
Mutual Fund Distributors (MFDs) are financial intermediaries or individuals who facilitate investors in buying / selling and managing their mutual fund investments. These distributors are also called mutual fund agents. Their role is very vital in the distribution and sale of mutual fund products to retail investors.
Niraj Choksi and Jignesh Desai, the two entrepreneurs has started NJ ( MFD) and their MFD, NJ remained the top mutual fund distributor for the eighth consecutive years with its commission earning jumped 19 per cent in the last fiscal to ₹1,539 crore.
A mid-career Mutual Fund Distributor with 4-9 years of experience may earn a salary around ₹4 Lakhs per year, while an experienced Mutual Fund Distributor with 10-20 years of experience earns an average salary of ₹5-6 Lakhs per year.
Become a Mutual Fund Distributor
To invest in Mutual Funds, it is necessary to have a sound understanding and knowledge about different Mutual Funds. Nowadays, every information is available online related to a mutual fund, and even before investing in MF, the investors can compare different funds.
However, to put all the things and facts together in perspective, the mutual fund agent or distributor plays an important role. In the development of the mutual fund industry in India, there is an important role played by the agents.
To become a MFD (Mutual Fund Distributor), it is necessary to understand the whole process to become a MFD, starting from clearing the NISM Certification examination to starting your business. The process also ensures that the distributor has the highest standards of knowledge about the financial products, attitude and ethics. Let’s understand how to start the journey?
Step 1:
Pass the NISM-Series-V-A: Mutual Fund Distributors Certification Examination: For more, please visit https://www.nism.ac.in/
It is a mandatory requirement to qualify the “NISM-Series-V-A: Mutual Fund Distributors Certification Examination” to become a mutual fund distributor. The National Institute of Securities Market conducts this examination.
The major motive of this examination is to ensure that the distributor has fundamental knowledge regarding Mutual Funds. Passing a certificate issued by National Institute of Securities Market (NISM) in respect of NISM – Series V-A has a validity period of three years. Pass the NISM series V-A and start your journey of MFD.
What is the passing mark for mutual fund distributor?
The mutual fund advisor exam pattern comprises 100 multiple choice questions for 100 marks, and the duration is 2 hours (120 minutes). The minimum pass mark is 50%, with no negative marking for incorrect answers.
What if I fail to clear the NISM Exam?
If you fail to clear the examination or are unable to appear for the exam due to any contingency or unable to take the proctored examination due to any technology related issue; you will need to reapply for the NISM examination & pay an examination fee of ₹ 1,500.
Step 2:
Get your AMFI Registration Number (ARN), which will be issued after passing the Certification examination and will be valid for 3 years from the date of issue.
The AMFI Registration Number (ARN) has been introduced as the unique code, which identifies the individual distributor as AMFI Registered Mutual Fund Distributor (ARMFD).
Once the NISM exam is cleared, the AMFI Registration Number (ARN) gets allotted. It is a unique code, or we can say a unique ID of every mutual fund distributor. Along with the ARN Number, candidates will also get an Employee Unique Identity Number (EUIN). The process of getting ARN is completely online and the same can be accessed on their website.
A photo identity card bearing a unique ARN, address, his/ her name, photo and the validity period of ARN, would be issued to individual applicants.
Step 3:
Get Empanelled: After availing of the AMFI Registration Number (ARN), you need to get empanelled with each and every mutual fund company. Alternatively, you can get yourself registered with the online mutual fund distribution platform AMFI (https://www.amfiindia.com/distributor-corner/become-mutual-fund-distributor).
You may also consider in starting, to join any other distributor and start working under them to gain experience and groom yourself in this area.
Step 4:
Learn to provide the right mutual fund schemes to your customers, beginners may visit www.mutualfundsahihai.com
Step 5:
Learn to grow your business by following successful MFDs, reading books, doing your own research work. Many online materials are available on the subject.
Step 6:
Acquire required software to service your customers. Many software are available in the market. You may also contact any developer to do modifications in the software as per your/ your client’s requirement.
AMFI Guidelines & Norms for Intermediaries (“AGNI”)
In order to promote best practices and ethical standards in the business of sale of Mutual Fund schemes, AMFI has formulated exhaustive norms and guidelines including a code of conduct for the intermediaries, which will be applicable to ARMFD. AMFI believes that a sincere endeavour to adhere to the guidelines and the code would help promote best and healthy practices in the area of sales and marketing which would ultimately benefit all concerned, the investor, the intermediary and the industry as a whole.
How does a Mutual Fund Distributor Earn?
Mutual fund industry in India has grown so well, and the agents/ distributors working with such platforms are also earning well. Mutual fund distributors earn through commissions received on investments of customers.
The commission to distributors is paid in the form of trail commission which is payable for the lifetime of an investment. If the investment of a customer grows over a period of time, then the commission will also keep growing.
There are a lot of opportunities available for people willing to build up their careers as mutual fund agents. If you also have such a dream, then start your journey right now.
How many mutual fund distributors are there in India?
Overall, the new ARN registrations (including corporates and their employees) jumped from 42,399 in FY 2022 to 51,453 in FY 2023. With this, the total number of individual distributors goes up to 1.22 lakh. Of the total 1.22 lakh, 50% or over 60,000 MFDs are from B30 cities. An analysis of AUM (Assets Under Management) of mutual fund distributors done by Cafemutual (Cafemutual is a complete guide on mutual fund business giving you all the mutual fund news, mutual fund analysis in India.) shows that the India’s top 100 individual MFDs manage assets close to Rs.39,000 crore as on March 2023. These MFDs have presence across 32 locations.
The assets under advisory of these individual distributors range between Rs.1550 crore and Rs.226 crore. Majority of these MFDs are from Maharashtra with Mumbai alone contributing 34 top individual MFDs. Pune and Thane contribute 6 and 4 top MFDs, respectively. Gujarat followed Maharashtra in terms of the total number of top MFDs. The state accounts for 10 top individual MFDs. Karnataka is the third largest state in terms of the top MFDs population. IT hub Bangalore sees 8 individuals making it to the list of top MFDs.
Interestingly, MFDs from small cities also made it to the top 100 list in FY 2023. Among such MFDs are Karan Agarwal (Aligarh), Sukanta Bhattarcharjee (Burdwan), Pankaj Ladha (Kota), Rikhav Desai (Navsari), Durgesh Babariya (Padra) and Probin Agarwalla (Siliguri).
How can housewife earn from home?
Yes, Housewife may also earn handsome commission in their spare time by becoming MFD.
Frequently Asked Questions (FAQs)
In simple words, it can be stated that a mutual fund is an investment tool through which clients or investors purchase securities. Each and every fund has its own risk-return characteristics.
A mutual fund distributor is a qualified professional who helps the investors by suggesting to them the best mutual fund schemes.
The mutual fund distributor commission depends upon their clients’ investment and type of the investments.
The first and foremost thing to do is, getting registered for the NISM Examination. The best part is you can appear for this exam of mutual fund agent online as well in India.
After completing the examination and getting the ARN Number, you can start working as a Mutual Funds Distributor. Either you can join the mutual fund distribution platforms like Nivesh or can also go for the direct ones.
The earnings of a mutual funds agent depend upon the commissions. The more clients you attract and convert into potential investors, the higher you earn.
Yes, it is mandatory to clear the NISM exam to become a mutual fund agent in India. However, Nivesh has an interesting model where one can simply just refer a client to our team and once the investment is made they can earn too.
Yes, the citizens who crossed the age of 50 years as of 31st May 2010, can easily get the NISM Mutual Fund Distribution Certificate by: Taking part in NISM Series VA Mutual Fund Distributors Certification Examination.
Or completing the NISM’s Continuing Professional Education (CPE) Training Program.
For agents in India, embracing the role of a Mutual Fund Distributor offers immense potential for professional growth, financial success, and the opportunity to contribute to the financial well-being of clients.
As far as the risk factor is concerned, investment advisors will discuss your capacity for it and scrutinize your mutual fund scheme performance over the years. Meanwhile, mutual fund distributors will primarily be concerned with meeting their own financial needs.
A Direct plan is what you buy directly from the mutual fund company (usually from their own website). Whereas a Regular plan is what you buy through an advisor, broker, or distributor (intermediary). In a regular plan, the mutual fund company pays a commission to the intermediary.
“Distribution fees” include fees paid for marketing and selling fund shares, such as compensating brokers and others who sell fund shares, and paying for advertising, the printing and mailing of prospectuses to new investors, and the printing and mailing of sales literature.
The distributor had an average AUM of Rs 1.23 lakh crore at the end of March 2023, having jumped 13.3 percent on a year-on-year basis. Further analysis of the data showed that Axis MF, SBI MF and Nippon India MF were the three biggest commission payers to the MFD.
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