Are you looking to become a mutual fund distributor in India? If so, there are certain things you need to know. This blog post will discuss becoming a mutual fund distributor, the commission structure, and how to apply. So keep reading to learn everything you need to become a potential mutual fund distributor in India.
How to become a mutual fund distributor in India
What are Mutual Funds?
Mutual funds are type of investment method that pool money from many investors with the goal of putting it in a diversified stock, bond, and short-term debt portfolio. The benefits of investing in mutual funds include professional management, diversification, and economies of scale. In case, if you invest in a mutual fund in India, you will become a shareholder of the fund. The fund’s holdings (its portfolio) are managed by a professional money manager who strives to grow its value and generate income for shareholders.
When you plan to invest in a mutual fund, you tap into the expertise of a professional money manager who oversees the fund’s investments. This can be especially beneficial if you don’t have the time or knowledge to manage your own investments.
A key benefit of investing in mutual funds is diversification, which is important because it helps protect your portfolio from any security or sector volatility (ups and downs). By spreading your investment rupees across different asset classes and sectors, you can help reduce risk without sacrificing potential returns.
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What is a mutual fund distributor?
A mutual fund distributor is an entity that sells and promotes mutual funds to investors. In India, there are three types of distributors: individual agents, banks, and financial institutions. Individual agents are the most common type of distributor and work on a commission basis. They are typically associated with a particular AMC (Asset Management Company) or MF house. Banks and financial institutions also sell mutual funds but typically do so through a relationship with an AMC.
What is the qualification for mutual fund distributors in India?
If you want to become a mutual fund distributor in India, one must have a bachelor’s degree from a recognized university and have cleared the SEBI (Securities and Exchange Board of India’s) mutual fund distributor exam. The test has two papers – Paper 1 is a general paper on financial markets and products, while Paper 2 is specifically for mutual funds. Once an individual clears the examination and registers with SEBI as a mutual fund distributor, they can earn commissions by selling mutual fund products to investors.
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How to become a mutual fund distributor in India
To become a mutual fund distributor in India, you must be registered with SEBI (the Securities and Exchange Board of India). You will also need to have a net worth of Rs. 50 lakhs and pass an exam conducted by SEBI. Once registered, you can collect commissions from the sale of mutual funds.
How much does a mutual fund agent earn in India?
In India, mutual fund agents can earn a commission of up to 3% of the total investment amount. However, the average commission earned by agents is around 1%. This is because the asset management company (AMC) generally pays the commission to the agent out of their own pockets.
What is the commission of an MF distributor in India?
To succeed in this business, you must build a strong network of clients and maintain good relationships with them. It would help you if you were also proactive in keeping up with industry updates and developments to provide your clients with timely and accurate information.
The commission you earn as an MF distributor will depend on the type of product sold and the amount invested by the client. Usually, a percentage of the total investment made by the client is paid out as a commission to the distributor. For example, if a client invests Rs 1 lakh in a mutual fund scheme through you, your commission would be around Rs 3,000-5,000.
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Who is the best mutual fund distributor in India?
To become a mutual fund distributor in India, it is important to know who the country’s top mutual fund distributors are. Below mentioned are the list of the best top 10 mutual fund distributors in India based on assets under management (AUM):
- HDFC Asset Management Company
- ICICI Prudential Asset Management Company
- SBI Funds Management Pvt. Ltd.
- Birla Sun Life Asset Management Company
- Axis Asset Management Company
- Kotak Mahindra Asset Management Company
- DSP BlackRock Investment Managers Pvt. Ltd.
- Franklin Templeton Asset Management (India) Pvt. Ltd.
- Reliance Capital Asset Management Ltd.
- IDFC Asset Management Company
Which mutual fund distributor is best in India?
There are many mutual fund distributors in India, each with its strengths and weaknesses. The most popular distributors include ICICI Prudential, HDFC Securities, and SBI Funds Management. Each distributor has its process for becoming a mutual fund distributor. However, all require you to have an active broker’s license.
The process generally involves filling out an application and undergoing a background check. Once you become a mutual fund distributor, you will be responsible for selling mutual funds to investors and providing them with guidance on investment choices. Therefore, choosing a reputable and reliable distributor that offers good customer service and support is important.
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Mutual fund distributor list in India
A mutual fund is a professionally managed investment scheme that pools money from several investors and invests it in various securities. These could include stocks, bonds, money market instruments, and other asset classes. The main aim of a mutual fund is to provide its investors with a regular income stream and capital appreciation. Many companies distribute mutual funds in India. Some of the more popular ones are:
- Birla Sun Life Mutual Fund
- HDFC Mutual Fund
- ICICI Prudential Mutual Fund
- SBI Mutual Fund
- Reliance Mutual Fund
- UTI Mutual Fund
- Kotak Mahindra Asset Management Company
Pros and cons of being a mutual fund distributor
Being a mutual fund distributor in India has many pros and cons. Some of the pros include:
- You can earn high commissions: As a mutual fund distributor, you can earn high commissions on the sale of mutual funds.
- You can work flexible hours: Unlike some other jobs, as a mutual fund distributor, you can set your own comfort hours and work around your schedule.
- You can build your own business: As a mutual fund distributor, you can build your own business by recruiting other investors and selling more mutual funds.
Some of the cons of being a mutual fund distributor in India include the following:
- The learning curve of mutual funds can be steep: There is a lot to learn about mutual funds before selling them successfully.
- You need to be licensed: To become a mutual fund distributor in India, you must obtain a license from SEBI (Securities and Exchange Board of India’s).
- You may need to make an initial investment: Some firms require that you make an initial investment to become a distributor.
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Conclusion and Disclaimer
Becoming a mutual fund distributor in India is a great way to earn commission while helping people invest their money. The process is relatively simple, and the potential earnings are very attractive. Becoming a mutual fund distributor could be a great option if you’re looking for a new career opportunity. The actual information may be different from what is mentioned in this article. Your responsibility is to research with caution and proceed further for mutual fund distribution.
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