How to Become a Mutual Fund Distributor:- Mutual Fund is a popular investment option for many people because people earn huge profits through it. But you can not only invest in mutual funds but you can also make a career in it by becoming a mutual fund distributor and earn money.
So if you want to become a Mutual Fund Distributor or Agent but do not know how to become a Mutual Fund Distributor, then you must stay with us till the end of this article.
In this article we will understand through step by step guide how to become a mutual fund distributor? Besides, we will also get information about mutual fund distributor commission. So without any delay let’s start the article.
What is a Mutual Fund Distributor 2023
Mutual Fund Distributor is also called Mutual Fund Agent. Apart from this we also call it mutual fund distributor in Hindi. These are such persons who personally provide information and guide people about investing in mutual fund plans by opening their own agency or opening their own institution.
A mutual fund distributor is a professional career that helps investors choose the right mutual fund to invest in based on their financial objectives, risk appetite and other factors.
Along with this, Mutual Fund Agents also assist the investors in completing the necessary paperwork and also provide them updates on their investments.
Eligibility to become a Mutual Fund Distributor
To become a mutual fund distributor you must fulfill certain eligibility criteria. These eligibility criteria include education and certificate requirement.
To become a mutual fund distributor to citizens, you must have high school, intermediate and 3 years of diploma certification. If you do a Bachelor’s degree in Accounting or Finance then you can get more benefits.
- Your age should be above 18 years.
- To become a mutual fund distributor, you must have a certificate from National Institute of Securities Market (NISM).
- You should have at least 2 years of experience in the Financial Service Industry to become a Mutual Fund Distributor.
How to Become a Mutual Fund Distributor?
Let us understand through step by step guide how to become Mutual Fund Agent / distributor?
Pass NISM Certification Examination
The first step to become a Mutual Fund Agent is to pass the certification exam of National Institute of Securities Market (NISM).
NISM is a public trust established by SEBI to enhance the quality of securities market. Mutual fund distributors must possess NISM V-A certification.
So first of all you should apply for NISM V-A certification and you can do this by visiting the NISM website. After applying, you have to pass the examinations conducted by it.
Register with AMFI
Now when you have passed the NISM exam then you have to register with the Association of Mutual Fund In India (AIMF).
- AMFI is a self-regulatory organization that represents the mutual fund industry in India.
- To become a mutual fund distributor you will have to register with AMFI. Or to register, fill in your KYD details and fill the AMFI Registration Form.
- You have to fill an ARN Application Form, in which you have to give all your details. Keep in mind that these details should match with the NISM examination details given by you.
- You can also fill this ARN Application Form online or you can also go to CAMS – KRA office and complete the process there.
- After this process is completed, your ARN Card will be delivered to your given address within a few days. And you are now registered with AMFI.
Become a partner of AMC/Mutual Fund House
Once you have the ARN Card, now you have to register with the AMC/Mutual Fund House and join it as a partner.
You can partner with one or more mutual fund houses based on your business requirement. As a mutual fund distributor, you will be responsible for selling mutual fund schemes of the mutual fund companies you have partnered with.
This mutual fund house provides you all resources related to training and marketing and also guides you in becoming a mutual fund distributor. And along with this, as you sell mutual fund plans, you will also be given commission.
So by following all the steps mentioned above, you can become a Mutual Fund Agent or Mutual Fund Distributor.
Mutual Fund Agent Commission Chart
If we look at the mutual fund distributor commission, its commissions are different for each type of fund. For example, mutual fund distributors receive different commissions depending on the number of funds sold.
Let us also tell you that the commission paid by the mutual fund distributor is one percent of the Assets Under Management (AUS) of the investor.
The commission rate for Equity Fund is 0.5 percent to 2.5% and for Debt Fund the commission rate is 0.2% to 0.5%.
So here it is important to note that the commission is not a lump sum payment but as long as the investor keeps investing in the mutual fund, the distributor also receives commission annually.
Let us have a look at the commission chart for mutual fund agents here -:
|Equity funds||0.5% to 2.5%|
|Debt funds||0.2% to 0.5%|
|Liquid funds||0.05% to 0.2%|
|ELSS Fund||4.5% to 10%|
What are the responsibilities of a mutual fund distributor?
Let us also understand Mutual Fund Agent roles after knowing the Mutual Fund Distributor details.
- As a mutual fund agent, their job is to understand the needs of each investor, prioritize them and identify their financial goals.
- The major responsibility of a mutual fund distributor is to remain up to date with new financial products and provide information about them to customers.
- Mutual fund agents assess a variety of investment options and provide clients with curated options. Along with this, the aim of the mutual fund distributor is to reduce the risks of the customers and provide them high returns.
- Maintaining accurate financial records is another important aspect of a mutual fund agent’s work. This includes tracking transaction details income statements and other important financial information for your clients.
What is the difference between Mutual Fund Distributor and Mutual Fund Consultant?
- Nowadays, people often get confused between Mutual Fund Advisor and Mutual Fund Distributor, whereas it is very important to understand the difference between these two.
- Mutual Fund Distributors mainly handle mutual fund products, whereas Mutual Fund Advisors handle a variety of mutual fund related products and services.
- A mutual fund advisor analyzes an investor’s Assets, Income, Liabilities and their expenses and gives them information about a mutual fund and advises them to invest in it.
- On the contrary, mutual fund distributors analyze the risk profile of the investor and give them information about the mutual fund product according to their needs.
- Also mutual fund distributors are registered with AMFI and mutual fund advisers are registered with SEBI.
Mutual Fund Distributor Salary ?
Let us also get information about the salary of Mutual Fund Distributor. So let us tell you that Mutual Fund Agent salary depends on his experience. Although the initial salary of Mutual Fund Agents is ₹ 30000 per month, but after 1 to 2 years of experience, this salary can also range from ₹ 50000 to ₹ 100000.
Apart from this, there are some Mutual Fund Distributors in India who receive a salary of ₹ 200000 per month.
FAQ’s – How to become a Mutual Fund Agent
How to become a Mutual Fund Distributor?
To become a mutual fund distributor, first of all you have to pass NISM exam and after that you have to get ARN Card and after that you have to partner with AMC.
By following these three steps, you will become a Mutual Fund Distributor. In this article, we have provided detailed information related to it.
How much do MF distributors earn as commission?
The commission of MF distributor varies depending on the mutual fund. For example, on equity funds a commission of 0.5% to 2.5% is available and on debt funds, a commission of 0.2% to 0.8% is available.
Which is the largest mutual fund institution in India?
India’s largest mutual fund organization is Unit Trust of India which was established in 1963.
What is the SBI Mutual Fund Agent Commission?
SBI mutual fund agent also gets commission of around 1% to 2%. But this commission is determined separately for different funds.
Conclusion – How to become a mutual fund distributor or agent
How to Become a Mutual Fund Distributor:- In today’s article we learned how to become a Mutual Fund Distributor? It is hoped that through this article you would have got complete information related to becoming a mutual fund distributor.
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