How to Become a Mutual Fund Agent Step-by-Step By Urvashi Arya #Mutualfunds #mutualfundagent #Mutualfundadvisor #NISMExam #SIPs

How to Become a Mutual Fund Agent Step-by-Step

By Urvashi Arya






These steps can be taken to become a Mutual Fund Agent:

Step 1: Applying to take the NISM exam

By visiting the NISM website, the prospective candidate must register for the NISM Series VA Mutual Fund Distributors Certification Examination (National Institute of Securities Market). The exam is offered at NISM facilities, and the registration cost is Rs. 1500 (excluding GST). The candidate can download the PDF file for exam preparation after completing the payment and, if the registration is successful, can also buy hard copies of the study materials from nearby bookstores or online retailers.

There will be no deducting marks for incorrect responses in the 100 MCQ questions that make up the exam. The candidate must receive at least 50%, or 50 points, to pass the test.

The applicants can study the subject matter using the NISM's study materials, and they can practice by taking any of the numerous practice exams or mock exams made accessible on NISM and other websites.

Step 2: Obtaining a passing score on the NISM mutual fund distributor exam:

The next stage for candidates would be to show up and pass the test. The results will be visible on the test screen just after the trial. The candidates can access the certification in electronic format on the NISM website, and a physical copy will be sent to the address they provide within 30 business days.

After completing the Series-V exam, the certificate will remain valid for three years. The CPE Program's 3-year validity period is likewise the same.

NISM Mutual Fund Distribution Certification Renewal

Anyone with one of the following mutual fund certificates who works in the mutual fund's sales or distribution is qualified to renew their certification:

(a) Mutual Fund Distributors Certification Examination, NISM Series-V-A

(b) Mutual Funds Distributors Continuing Professional Education: NISM Series-V-A

(c)Module for AMFI Mutual Fund (Advisors)

(d) IICM: Mutual Funds Refresher Course

(e) CIEL: Mutual Funds Refresher Course

By showing up and passing the NISM Series V examination or the NISM CPE Mutual Fund Distribution Program, they can revalidate or renew their license, which expires in a year.

Step 3: obtaining the ARN from AMFI 

The candidate must go through the necessary KYD (Know Your Distributor) process and apply to AMFI for an AMFI Registration Number to begin selling or providing mutual fund advice after passing the NISM distributor test. The candidate would have to fill out the ARN application form with information such as their PAN, identity information, NISM Distribution certificate number, and other facts.

According to the specifications, the properly completed forms must be submitted via CAMS-KRA (KYC Registration Agency) either physically (at the CAMS office) or electronically. The ARN number will be provided to the Mutual Fund Agent following the successful verification of the forms and papers, and the card will be delivered to the specified address within a few days.

Obtaining an AMFI Registration Number costs money.

Step 4: Registering with Distributors or AMCs 

The advisor can begin selling mutual funds to his clients and collecting commissions once he receives his ARN number. The mutual fund agent must now negotiate contracts with the AMFI distributors to sell the funds and collect commissions on them. The distributors would pay the agreed-upon commission on the mutual fund schemes that the agent marketed.

Also, the mutual fund advisor can directly contract with AMCs or fund houses as a distributor to sell their mutual funds.

It is preferable to connect with distributors to ensure the registration and documentation requirements are met while entering into agreements with various fund houses.

Commissions for Mutual Funds Advisors:

Many mutual fund schemes and Fund Houses or Asset Management Companies have varying mutual fund agent commission rates. Each AMC has its system for paying commissions to distributors, and they have also established several commission rates ranging from 0.1% to 2% for various category types, such as debt, equity, and hybrid.

The commissions are paid to the distributors every month by the AMCs based on the total Assets Under Managed, which is determined annually (including SIPs for the year and lump-sum investments). The expense ratio of the mutual fund scheme includes the commission that the AMC paid on the plan.

The commission varies throughout the cities as well. The trail commission is paid for the following in the mutual fund commission structure:

T-30 Cities: The AMCs would give the mutual fund schemes the same predetermined commission in these cities. For the first year, no additional incentive is given for investments or SIPs in mutual fund schemes. The commission is subject to quarterly adjustments by the AMCs or Fund Houses (before, an upfront commission was given to distributors for initially selling the plans for SIPs and Lump Sum).

2. B-30 Cities- The fund houses offer a specific incentive, the Master B-30 Incentive, where the AMCs would be paying extra incentive commission following the B-30 Cities' (below-top 30) investors.

Certain fund houses also provide specific incentives, such as additional SIP commission (upfront), paid to distributors or mutual fund agents for pitching new SIP investments of the mutual fund schemes. This is in addition to the trial commissions paid for the year. Only the amount of the first SIP that investors make is used to calculate the SIP additional commission.

Career as a mutual fund advisor:

The Indian mutual fund industry has expanded quickly during the past ten years. According to AMFI data, the overall AUM (Assets Under Managed) as of April 2020 is around Rs. 24 lac crores, up from Rs. 11.86 lac crores in April 2015, a two-fold rise in just five years.

By 2030, the Indian mutual fund industry hopes to have ten crore investors and an AUM of Rs—100 lac crores. The mutual fund sector has a wide range of options, as seen by the significant rise in the data on mutual funds. Further, there is a need for more fresh entrants into the market to serve the expanding clientele because there need to be more financial agents, advisors, or distributors to meet our nation's investors' needs.

Regarding salary, a career as a mutual fund advisor can be very lucrative. The advisors have limitless potential to increase their incomes because the commission collected grows along with the clients' numbers and the investments they make. 

How to Become an Adviser for Mutual Funds By: Urvashi Arya #Mutualfunds #Financialcareer #MutualfundAdvisor #SIPs #Financialadvice

How to Become an Adviser for Mutual Funds

By: Urvashi Arya






Qualified experts known as mutual fund advisors advise investors on investing in mutual funds. By considering their risk tolerance, financial objectives, and investment horizons, among other factors, the advisors offer their customers or investors individualized financial advice. They would gain income by receiving commissions from distributors or fund houses to sell mutual fund schemes.

Mutual fund advisors provide their experience in choosing and creating a portfolio of mutual fund schemes that align with their investors' financial objectives. To do this, mutual fund agents must monitor the performance of numerous mutual fund schemes with diverse investment objectives and stay informed of significant financial market events that could affect the performance of the mutual funds.

They would continue to choose the finest funds for their clients' investments by adhering to a strict qualitative and quantitative approach. The advisors would also advise the investors on updating their portfolios after their initial investments, such as adding or removing schemes, increasing SIPs, pausing SIPs, etc., when they identify any market-related difficulties or potential opportunities that may help improve the client's wealth.

According to AMFI (Association of Mutual Funds in India) guidelines, passing the required "NISM Series VA Mutual Fund Distributors Certification" examination and obtaining an ARN number are prerequisites for becoming a mutual fund distributor or agent.

What function do advisors to mutual funds perform?

When interacting with or sustaining relationships with their clients to assist them in growing their money or achieving their financial goals through investments in mutual fund schemes, mutual fund advisors must take on various significant duties. An important function performed by a mutual fund agent is:

1. Recognizing the investors' financial demands

The mutual fund advisor must know the investors' clients' financial goals and demands. They must communicate with investors to ascertain their objectives and the time needed to achieve them. They only offer customers advice based on their investments' goals, such as retirement, wealth growth, preparing a child's further education, purchasing a car, or organizing a trip. Everyone has different financial needs, and to meet those needs on time, the investing strategy must align with those needs.

2. Informing investors:

The mutual fund representative must inform the investor about the financial products that fit their requirements well. The advisor may occasionally need to go in-depth with the investors to explain all the investment limitations they may encounter, such as the difference between the investor's ability to handle risk and willingness to take risk. Before recommending investments, it's critical to explain the risk-return characteristics of each investment product to the customer.

3. Assessing Investors' Appetite for Risk:

Evaluating the clients' or investors' level of risk tolerance is one of the most crucial responsibilities a mutual fund advisor must perform. The advisor may assess the investor's risk tolerance based on their marital status, number of children, income, monthly expenses, dependents, age, loans or EMIs, anticipated future expenses, investment horizon, financial objectives, and other considerations. Depending on their level of risk appetite, various investors are better suited for different assets.

For instance, it would be inappropriate to recommend small-cap equity funds to an investor with a low-risk tolerance due to the minimal necessary horizon. However, investors with a substantial risk appetite may be advised to invest in these funds.

4. Examining different investment possibilities

Although there are many different mutual fund investment options on the market, the advisor only needs to choose the best based on the investor's risk tolerance and financial objectives. Within the asset classes, such as equity and debt, mutual fund schemes are divided into numerous subcategories. The mutual fund advisor must evaluate the appropriate projects for his clients by looking at the performance indicators, comparing the system to its peers, and selecting the best ones.

Due to this, the mutual fund agent must be adequately informed of the financial markets and the economy's overall occurrences.

5. Portfolio Diversification

Diversification is crucial because it lowers total portfolio risk by distributing it across various investments. The advisor advises clients to allocate their funds among different mutual fund plans to reduce the portfolio's volatility.

The advisor conducts a great deal of study to determine the best investment possibilities across asset classes and within the categories that will be combined to build a portfolio. As a result, mutual fund advisors are crucial to portfolio optimization and risk reduction.

6. Keeping Financial Records Up to Date:

Ensuring the client's financial records is one of the mutual fund advisors' key responsibilities. The data might include information like MF Investment transaction details, holding details, income details, PAN card details, and other things that should only be appropriately utilized or shared with the client's permission. Advisers must keep track of all services rendered to clients, including invoices, information about the services supplied, and any other necessary papers.

7. Getting started as a mutual fund advisor:

One must pass the "NISM Series-V-A Mutual Fund Distributors Certification" exam given by NISM to become a mutual fund agent. After completing the test, the candidate must contact AMFI through CAMS-KRA to request an ARN (AMFI Registration Number).