Everyone in the Finance sector would agree with the fact that the rise in investments through mutual funds has seen remarkable growth in the last few years. This has resulted in the cropping up of several mutual fund investment providing firms in the market.
Besides this, there are individual mutual fund advisors, same on the lines of Life Insurance Agents. The presence of so many firms for mutual fund investment and distribution is a testimony to the fact that how lucrative it has become as a career option for becoming a mutual fund distributor. There is an organised procedure laid down for qualifying and becoming a mutual fund distributor.
The first and foremost step is to gather eligibility of becoming a mutual fund distributor. This is done by passing an examination which is mandatory for becoming a mutual fund advisor.
National Institute of Securities Markets (NISM) is the assigned entity by AMFI (Association of Mutual Fund in India), which is the nodal organization for mutual fund investment for the examination, NISM series V-A exam.
This examination has 60% clearance record and hence it is necessary to be well prepared for the examination. The learning material for this examination is available online as well. The age cut-off for appearing this examination is 18 years.
However, those citizens who are beyond 60 years of age are exempted from this examination. They are only required to attend the Continuing Professional Education (CPE) which is only a one-day training program accomplished under the supervision of NISM. Both these examinations, be it NISM CPE or NISM series V-A exam, can be registered for online itself.
After the clearance of these examinations, a certificate is issued elucidating eligibility of the person for becoming mutual fund distributor.
Later, the next step is to secure the ARN code. ARN is AMFI Registration Number which is issued as a unique identification number for mutual fund distributors.
ARN code can be generated by going to AMFI offices or CAMS office and submitting the requisite documents like copies of Aadhaar Card, PAN card, bank account details and along with NISM examination clearance certificate. This also requires application fee of 3000 INR to be paid.
Once the ARN code is generated, just one step is left to be taken to be a functional mutual fund agent. Securing ARN code, the person can then get registered to Mutual Fund Houses and/or Asset Management Company.
This process is commonly called as the Know Your Distributor (KYD) procedure. There are over 40 mutual fund houses including Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Reliance Mutual Fund, etc. functional in the market.
One can opt for not just one but more mutual fund houses to complete the Know Your Distributor process. Usually, agents opt for 4-5 mutual fund houses to get their enrolment and get going in their task.
After this process, the channel for commission is set for the agent through the concerned mutual fund along with getting the applications and other marketing materials required by the agents.
