How To Become Mutual Fund Agent

What is a Mutual Fund?

Mutual funds are a way of investing in a single fund by pooling money from different investors. This fund is managed by a fund manager, who invests the money collected from various investors in bonds, and stock markets.

Units are allotted to the investor for his money. This unit is called NAV. Mutual funds offer investors a wide range of investment options to split the fund investment's cost and profit.

The investor chooses how much risk they are willing to take, and their return is contingent on the investment's success.

Mutual funds can be managed either passively or actively. Investors who choose an actively managed fund will receive larger returns, but they will also be exposed to more risk.

In other words, a mutual fund organisation is a firm that pools money from several interested investors and invests it in several stocks, bonds, and other financial assets with the objective to make profits.

The portfolio of a firm is made up of all of the company's holdings (stocks, bonds, and other assets). An asset manager oversees each mutual fund. Mutual funds are a great and simple way to make money.

It is not required to invest hundreds of rupees in this; you may invest as little as 500 rupees per month.

Who is a Mutual Fund Agent?

A mutual fund advisor is a trained specialist who examines your present financial situation, determines your investment objectives, and advises you on how to invest in the finest mutual fund to develop a portfolio that meets your needs and objectives.

They have a thorough understanding of numerous types of mutual funds and are up to date on current market conditions, allowing them to assist you in selecting the best fund for your investment needs.

An adviser's fiduciary duty is to disclose all aspects of an investment to their clients in an ethical and moral manner.

What are the roles of a mutual fund agent?

Customers can work with mutual fund agents to pick and construct a portfolio of mutual fund investment options that fit their financial goals.

This involves the MF agent/advisor’s initiative to monitor a variety of mutual fund investment schemes with varied investment objectives, as well as maintaining current on major financial market developments that may have an impact on these investment schemes' performance.

Providing accurate information to the client/customer

• The first task of an agent is to create a financial strategy chart for customers focused on their financial objectives. 
  
  

• Following the creation of the strategy, the customer is instructed to clarify and train themselves on how to reach their objectives, which entails looking at investment choices. 
  
  

• As a result, you can swiftly determine how each can assist or obstruct the client's financial objectives.

Considering different investment options

• After the client's objectives and desires have been established, the fund agent conducts a thorough review of market circumstances.
  
  Then they recommend either stock mutual funds, debt funds, or money market products.
  
  
• Mutual fund agents/advisors must keep up with the latest financial trends in the market and views in order to provide appropriate recommendations.

Maintain documents

• One of the most important aspects of a fund advisor's job is to handle the client's civil financial facts.
  
  
• As a result, he or she maintains a record of the services they provide, including invoicing, service features, and any other dealings.
  
  This paperwork is required when the firm is audited by regulatory entities.

Plan a foolproof investment strategy

• The fund advisor creates a good investing strategy after assessing the customer's viable investment plan.
  
  
• The technique entails combining several investment possibilities in order to broaden the portfolio and minimise potential losses while increasing rewards.

Aids to formulate the financial objectives

• Mutual Fund agents analyze which mutual fund is best for you based on your demands and requirements.
  
  
• For instance, if you desire long-term investments with a greater risk, they will advise you to invest in equities mutual funds.
  
  
• They also recommend investing in debt funds if you seek short-term investments with little risk.

Evaluating the risk-taking capability

Mutual Fund agents provide the best investing strategies focused on the investor's risk tolerance.

Debt funds, for example, carry a lower risk. Before creating an investment strategy, the advisor considers the debt funds' long and short-term financial goals, investment security, age, costs, family status, and current financial commitments.

Encouraging investors to diversify their holdings

Since it helps to spread the risk and awareness across a wide range of investments. Following the greatest investment options across sectors and markets necessitates extensive investigation.

As a result, the mutual fund advisor is critical in improving portfolios and lowering risks.

How to get a tag of a mutual fund agent?

Mutual fund agents/advisors have extensive investment knowledge in both selecting and assembling a portfolio of mutual fund schemes that also are aligned with investors' long-term financial goals.

This involves the MF advisor going the extra mile to monitor a wide range of mutual fund schemes with varied investment goals, as well as remaining up to date on major financial market events that may affect the performance of these schemes.

How to become a mutual fund agent ?

To become a qualified mutual Fund agent, the candidate’s age should be at least 18 years.
 
The candidate should have at least passed the intermediate exam, such candidates should have passed the 10th exam and they should have 3 years of diploma, to become a mutual fund agent.

Then a mutual fund investment advisor must first obtain certification from the NISM (National Institute of Securities Markets). To become eligible for a Mutual Fund Agent, kindly follow these simple steps:

Step 1. Registration for the NISM exam

Candidates seeking to become mutual fund agents should first take the Mutual Funds Distributors Certification Exam that is offered by the National Institute of Securities Market (NISM) of India.

This can be completed by visiting NISM's official website and paying a registration cost of 1500.

The test will take place at NISM centers that have been authorised. After completion of the application, the candidate will get a PDF document that will aid in their exam preparation.

You can also practise using hard copy manuals or online course materials.

Step 2. Pass the  NISM Exam

The aspiring mutual fund agent will be approved as a mutual fund agent if they clear the NISM exam.

This certification will be available in physical form for around thirty days once their exam reports are released, but it will be available in e-format as soon as the exam reports are obtained.

The certification is for three years from the date of the examination. The CPE Course has a three-year expiration term, as well.

Step 3. Determine your dealer/distributor

After completing the examination and being authorised, the candidate must go through the Know Your Dealer procedure.

This will happen when they apply for an AMFI Registration Number (ARN) from the Association of Mutual Funds in India (AMFI), which is required to start trading or counselling on mutual funds in India.

The candidate will be asked to submit their PAN card, NISM Distribution certificate number, Id information, and other criteria on the ARN prescribed file.

According to the conditions, all completed forms must be physically or electronically sent to CAMS-KRA (KYC Registration Agency).

The candidate (now a mutual fund agent) will be given an ARN number and their id card will be sent to the address mentioned on their application within a few days when the documentation is correctly verified.

Step 4. Establish a long term relationship with AMCs or Dealers

After receiving their ARN number, the mutual fund agent is now a full-fledged Mutual Fund agent.

They are now able to begin selling to clients and earning commissions. The next step is to contact AMFI dealers to discuss the sale of these funds.

A commission is provided to dealers depending on the number of mutual fund schemes sold by the agent.

Instead of going via dealers, the agent can sell mutual funds straight from fund houses or asset management firms (AMCs).

Major Renowned Mutual Fund Training Institutes

The first step in the way to becoming a mutual fund advisor/agent is to find a reputed training institute to get the important guidelines and training of a perfect mutual agent/advisor.

Here are some of the major mutual fund training institutes are as follows:

• NIFM Institute
  
  
• Nirman Institute of Financial Awareness(NIFA)
  
  
• IFM Trading Academy
  
  
• Bombay Stock Exchange(BSE)
  
  
• NISM - Mutual Fund Module

Registration With a Distributor/Asset Management Company

After receiving their ARN number, the mutual fund agent has become a full-fledged MF advisor.

They are now able to begin delivering to clients and earning commissions. The very next step is to contact AMFI distributors to discuss the sale of these funds.

A commission is provided to distributors based on the number of mutual fund schemes sold by the advisor.

Instead of going through distributors, the mutual fund agent/advisor can sell mutual fund schemes directly from fund houses or asset management firms (AMCs) to the client.

Skills Required for a Mutual Fund Advisor or Agent 

These are some of the most important major skills that you have to know to become a successful mutual agent:

• Requirement of a Client: Mutual fund advisors must work hard to understand their clients' goals as well as the deadlines for accomplishing them.
  
  Their advice will be based on the client's objectives, whether those objectives are to save for retirement, develop wealth, plan for higher education, or something else entirely.
  
  
• Investment Diversification: The majority of mutual fund investment advisors emphasise portfolio diversification as a goal for their clients.
  
  Extreme fluctuation and risk in one's investments are reduced when one has a diverse portfolio. The advisor attempts to reduce risk by optimising one's portfolio.
  
  
• Risk Management: Some investors are well informed of their risk level and will inform their advisors as soon as possible.
  
  Others may not be informed, and as a result, their mutual fund advisor should be consulted.
  
  To construct a long-term financial portfolio, then one must choose how much risk they are willing to take on with their assets.
  
  As a result, mutual fund advisors are crucial in guiding clients in establishing their risk tolerance.
  
  
• Awareness: A mutual funds advisor's next job is to inform their clients well about current financial products on the market, specifically those that are particularly fit to their objectives.
  
  In some circumstances, advisors may be obliged to delve deeper and educate investors about investment limits.

What is the average salary or commission for a mutual fund agent?

The income of an agent is influenced by their amount of work experience. With 1 or 2 years of work experience, an agent can make around 40,000 and 70,000 rupees per year.

When you have several years of work experience and have performed in the field for a while. Your monthly earnings could climb from Rs 1,50,000 to Rs 1,90,000 if you have greater knowledge about mutual fund securities.

As a result, it is now a terrific choice with the chance to generate lakhs of rupees. However, mutual fund agents' commissions differ from client to client and mutual fund company to mutual fund company.

Mutual fund firms charge varying commissions for different programs. An upfront commission is another name for it.

For high ELSS (Equity Linked Savings Scheme) funds, it ranges from 1.0 percent to 4.5 percent, and for equity schemes, it ranges from 0.5 percent to 2 percent.

It ranges from 0.2 percent to 0.8 percent for low-debt funds. Then there's the trial commission, which can range from 0.5 percent to 1 percent of the total revenue.

They're all based on mutual fund companies and their offerings. There is also a one-time transaction fee. Existing investors will receive a predetermined amount of 100 rupees. It costs 150 rupees for new investors.

Let's take a look at the client's commission, for example. Assume a person makes a 2,00,000 rupee investment. In addition, the agent charges a 2% commission. As a result, 2,00,000*2/100 Equals 4,000. Every month, the agent receives 4,000 from a client.

What are the benefits of becoming a mutual fund agent?

By becoming a mutual fund agent, any person can create another savior of his earnings, because at present common people are also willing to invest in mutual funds, so there are opportunities to earn in this, so mutual fund agents. can earn to fulfill his/her dreams.

Once a becomes a customer, the mother keeps investing for a certain period of time, thus the agent can also earn passive income.

• By becoming a mutual fund agent, one can independently earn money by working full-time or part-time. This work is a little different from the job, as no matter how much work in the job, a certain amount of salary is received.
  
  Whereas in this the better work the person will be able to do, the better he will be able to earn his income which will help the individual to get inner satisfaction.
  
  
• If a mutual fund agent is needed, he can start his own business on a large scale and can play an important role in providing employment to people.

What is the future scope for a mutual fund agent?

A Mutual Fund Agent with a strong understanding of the debt and equity markets is in the growing market. The mutual fund sector provides a vast and varied selection of professional opportunities for people from all walks of life.

Sales, marketing, product development, investments, human resources, risk, and compliance are just a few. The advent of overseas companies has increased the number of jobs available in this industry.

However, the mutual fund business in India is presently worth roughly Rs 38 lakh crore in assets under management (AUM). With a growth rate of 22% throughout the last five years, it is the world's leading financial industry.

Only 3.25 crore Indians, out of a total population of 135 crores, are now participating in mutual funds. That's less than 2% of our total population.

This indicates that the industry has a lot of potential. 8-10 lakh new investors enter the mutual fund industry every month.

While the increased number of MF investors, there is also a big journey to go, as follows:

• Our mutual fund market continues to lag the developed world - India's AUM to GDP ratio is 12 percent, whereas the global average is 63 percent.

• Low competition: There are just 1.26 lakh mutual fund distributors compared to a total of 20 lakh+ insurance consultants.

• AUM potential of almost 100 lakh crore is predicted over the coming decade.

Conclusion

Because of the variety of functions that mutual funds advisers play, being one is recognized employment. They monitor risk in portfolios, assess their clients' financial objectives, and attentively track funds they can select for them.

The path to becoming a mutual fund investment advisor is straightforward and well-defined. If someone wants to work as a mutual fund distributor or seller in India then it is necessary that they have a NISM certification and an ARN number.

After becoming a mutual fund agent, a person needs to work hard to sell mutual funds.

There is a need to sell the product so that it can earn maximum Yes, but after this, if the entrepreneur wants, he can do this work part-time and even if he wants full time but earning will happen only when the mutual fund agent will be able to get the best mutual fund.

Frequently Asked Questions (FAQs)

Q1. Who can become a mutual fund advisor/agent?

Ans. Anyone who is interested and clears the required criteria can become a mutual fund agent.

Q2. What is the difference between a mutual fund advisor and a mutual fund agent?

Ans. No difference, between mutual fund advisors and mutual fund agents, both are the same. 

Q3. What are the earnings of a mutual fund agent?

Ans. Earning of a mutual fund agent depends on the organisation and his/her years of experience. For all the information related to how to become mutual fund agent, read the above article completely.