If you are interested in the financial sector and want to help people invest their money wisely, becoming a mutual fund distributor in India might be a good career option for you. A mutual fund distributor is a person who sells mutual fund schemes to investors and earns commission from the fund houses. In this blog post, we will explain the steps and requirements to become a mutual fund distributor in India.
Step 1: Register with AMFI
The first step to become a mutual fund distributor is to register with the Association of Mutual Funds in India (AMFI), the self-regulatory body of the mutual fund industry. You need to fill an online application form on the AMFI website and pay a registration fee of Rs. 3,000 plus GST. You will also need to upload some documents such as your PAN card, Aadhaar card, address proof, educational qualification proof, etc.
Step 2: Pass the NISM exam
The next step is to pass the National Institute of Securities Markets (NISM) Series V-A: Mutual Fund Distributors Certification Examination. This is a mandatory exam for anyone who wants to sell mutual funds in India. The exam consists of 100 multiple-choice questions and you need to score at least 50% to pass. The exam fee is Rs. 1,500 plus GST and you can book your slot online on the NISM website. You will also need to carry your AMFI registration number and a valid ID proof to the exam center.
Step 3: Get your ARN and EUIN
After passing the NISM exam, you will receive a certificate from NISM that will be valid for three years. You need to submit this certificate along with your AMFI registration form to get your AMFI Registration Number (ARN) and Employee Unique Identification Number (EUIN). The ARN is a unique code that identifies you as a mutual fund distributor and the EUIN is a sub-code that identifies you as an individual employee of a distributor firm. You need to quote these numbers while selling mutual funds to investors.
Step 4: Empanel with fund houses
The final step is to empanel with the fund houses whose schemes you want to sell. You need to fill an empanelment form for each fund house and submit it along with your ARN card, PAN card, bank account details, etc. You will also need to sign a distributor agreement with each fund house that specifies the terms and conditions of your relationship. Once you are empanelled, you will receive a login ID and password from each fund house that will allow you to access their online portal and place orders for investors.
Benefits of becoming a mutual fund distributor
Becoming a mutual fund distributor has many benefits such as:
- You can earn commission from the fund houses based on the assets under management (AUM) of the investors you bring in.
- You can also earn trail commission from the fund houses based on the performance of the schemes you sell.
- You can help your clients achieve their financial goals by providing them with suitable investment advice and guidance.
- You can enhance your knowledge and skills by attending training programs and workshops conducted by AMFI and NISM.
- You can enjoy flexible working hours and location as you can work from home or office or anywhere else.
Challenges of becoming a mutual fund distributor
Becoming a mutual fund distributor also has some challenges such as:
- You need to comply with the rules and regulations of SEBI, AMFI, NISM, and other authorities that govern the mutual fund industry.
- You need to maintain high ethical standards and avoid any mis-selling or malpractice that can harm your reputation and credibility.
- You need to constantly update yourself with the latest market trends and developments and keep track of the performance of various schemes.
- You need to deal with competition from other distributors and online platforms that offer direct plans of mutual funds.
- You need to build trust and rapport with your clients and retain them for long-term.
Becoming a mutual fund distributor in India is a rewarding career option for those who have an interest and aptitude for finance and investments. It requires some initial investment in terms of time, money, and effort, but it can pay off well in terms of income, growth, and satisfaction. If you are interested in becoming a mutual fund distributor in India, you can follow the steps mentioned above and start your journey today.