How to Become a Successful Mutual Fund Distributor in India?

In order to become a mutual fund distributor (an intermediary), one must have to get registered with AMFI after passing NISM Certification test and obtain a unique code-AMFI Registration Number (ARN). Mutual fund distributor plays a very important and valuable role in promoting sales of Mutual Fund Products. In addition to increase the sales for Mutual Fund products, he also provides advisory services to his clients which are very vital for their goal oriented investments. This is the reason why the Mutual Fund distributors should have the highest standards of knowledge, attitude and ethics. Mutual fund distributor exam dates October 24, 2020.

Both Securities and Exchange Board of India (SEBI)and Association of Mutual Funds in India (AMFI) have played a major role in this regard. They made it mandatory to obtain a mutual fund distribution certification that aims to enhance the quality of sales, distribution and related support services in the mutual fund industry.

About National Institute of Securities Markets (NISM) Series-V-A Certification

An examination will be conducted by NISM and upon clearing that exam, one will obtain the certification. The examination consists of 100 questions of 1 mark each and its duration is 2 hours. The passing score for the examination is 50%. There is no negative marking.

The Main Objectives Behind the exam are:

• Providing knowledge regarding the fundamentals of mutual fund, its structure, various kinds of schemes /plans with their key features, etc.
• Orientation towards accounting, valuation and taxation aspects of mutual fund.
• How to do financial planning of the prospective clients?
• How to sell the Mutual Fund products in the market?
• Get acquainted with financial planning.
• How to develop a long term relationship with the clients?
• How to answer various queries by the clients?
• Get oriented to the legalities, accounting, valuation and taxation aspects underlying mutual funds and their distribution.

Eligibility Criteria for Mutual Fund Distributor

All those who want to get engaged in marketing and selling of Mutual Fund schemes are required to:

1. Pass the NISM Certification Test known as "NISM Series-V-A: Mutual Fund Distributors Certification Examination".
2. Get registered with AMFI after passing NISM Certification Test.
3. Obtain a unique code-AMFI Registration Number (ARN) along with an identity card from AMFI.
4. AMFI will also allot Employee Unique Identity Number (EUIN) to each intermediary along with ARN.
5. One can get the ARN through online process.
6. Individual applicants will get a photo ID card bearing the unique ARN number, address, name, photo and validity period.

Following Documents are Required by the MF House for Empanelment:

After above process is over, the intermediary has to get himself empanelled to each Mutual Fund House separately, with which he wants to work for.

1. Empanelment Form, provided by the mutual fund
2. A cancelled cheque
3. Copy of PAN Card
4. Copy of AMFI Certificate
5. ARN Card

Direct Access to Mutual Funds

After obtaining ARN and EUIN, the intermediary has to get himself empanelled to each Mutual Fund House separately, with which he wants to work for.

The intermediary can use an online mutual fund distribution platform to register himself.

Benefits of Becoming Mutual Fund Distributors

According to SEBI, there are 1,24,000 mutual fund distributors in India as of 28 February 2019. There are several benefits of becoming a mutual fund distributor which are listed below:

• You can start earning at your young age.
• You do not have to work under any boss. You are your own boss. You can work according to your own wish and in your own style.
• Flexibility in work timings will be there as unlike a job, there are no office timings.
• You can establish a good source of income for yourself by brokerage earned through mutual funds.
• You can plan for unlimited growth. The more you bring the business by selling mutual funds, the more you can earn.
• Unlike other businesses, it does not require any initial capital.
• The more AUM increases under your code, the more trail commission will you receive.

Role of Mutual Fund Distributor

1. Provide appropriate mutual fund schemes after understanding customer's financial objectives, funds availibility, risk taking capacity and investment horizon
2. Promoting investor awareness of and educating them about various sectors available for investment and risk involved in them.
3. Development of an investment strategy for the customer
4. Help them understand how mutual funds work and how to choose the right scheme
5. To facilitate transactions and help in compliance with regulations