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Becoming a Mutal Fund Agent
Mutual Funds have slowly but surely become one of the best investment instruments in the modern age. However, many people are still apprehensive before investing in the long-term investment scheme. As a Mutual Fund Agent/Distributor, you will be in-charge of educating potential investors about the benefits of investing in a mutual fund schemes and how it will be beneficial for them to achieve their long term financial goals.
Mutual Funds are nothing but the money collected from a pool of investors with the same investment and financial goals such as Tax Saving by funds like ELSS, or long term investment as a Retirement Fund. Helping people educate about the benefits of investing in Mutual Funds scheme and earning money through commission can be a great source of part-time income.
How to become a Mutual Fund Agent?
In order to become a Mutual Fund distributor, there is a stautory procedure which a prospective agent has to complete in order to complete their their mutual fund distributor registration . The procedure to become a mutual fund agent consists of the following steps:
Step 1: Pass the NISM Series V-A: Mutual fund distributors certification examination
The test requires no Minimum education qualification. Any individual capable of clearing the NISM Series V-A test can become a mutual fund distributor. The examination for becoming a mutual fund disttributor however, can prove to be a very challenging experience which might require excessive preparation and investing a lot of time , as well.
Preparing for the NISM Series V-A
As per the NISM website, only 60% of the exam takers qualify the exam so taking the examination without preparation migh not be a wie option. people above the age of 50 can directly take the exemption for this examination.they have to attend the one-day NISM training programme called NISM Continuing Professional Education(CPE) previously called AMFI refresher course.
For individuals fee is Rs. 3000+ 18% GST and in demand draft.
Step 2: Register with AMFI through CAMS office
After clearing NISM Series V-A, mutual fund distributor certification exam you will be eligible to be an Agent.
You will then require to fill in Know Your distributor(KYD) details along with biometrics and also fill in AMFI Registration form(ARN). It is a small application form asking for your name, address, qualifications, photographs etc.
After that submit all the documents along with the filled form to any of the CAMS offices and if you are not KYD compliant you have to go to the CAMS office to submit your form and complete biometrics there.
On completion of the process, you will get your ARN card within few days at your registered address.
Step 3:Register with AMC
When you will get AMFI registration number(ARN) you are free to distribute mutual fund services and get the commission. However, there is another small procedure before you can start working.
You need to register with each mutual fund house so that you can receive the commission, application form, marketing material etc.
In these three steps, you can become a mutual fund agent and start earning commissions. The whole procedure will take up to a month and a half including preparation for the exam.
Commision Structure for Mutual Fund Agent
A mutual fund agent can generate a revenue source for themselves via the attractive commision structure in place for mutual fund distributors. A mutual fund agent/ distributor can earn commision as detailed below:
Commission from Clients
One-Time Transaction Charge
|No. of years||Investment||Total Asset Under Managment@12%||Upfront Commission||Trial Commission||Total Commission|
Total earnings of Mutual Fund Agent will be Rs. 1,10,972. From the above table you can see that the Mutual Fund Agent’s earnings are low at the beginning but drastically improved as AUM(Asset Under Management)grows.
Frequently Asked Questions
If you hold any of the following certificates:
- NISM Series V(a):Mutual Fund Distributors Certificate Examination
- NISM Series V (a): Mutual Fund Distributors Continuing Professional Education
- AMFI Mutual Fund (Advisors) Module
- IICM: Refresher Course on Mutual Funds
- CIEL: Refresher Course on Mutual Funds
And the validity of such licenses has not expired, it makes you eligible to attend the NISM CPE Program. In addition to this, if you hold an ARN Card , you are eligible to attend the NISM Course.
ARN stands for AMFI Registration Number. It is a unique code given to identify the intermediaries involved in the facilitation of the sale of mutual funds NAVs (Net Asset Values)
18 years is the minimum age required to apply for an ARN.
KYD stands for Know Your Distributor and it is mandatory procedure authorized by CAMS for the registration of a mutual fund intermediary/ agent/distributor. KYD has to be submitted via the KYD application form. The documents for the KYD include Two self-attested passport-size color photographs, and, self-attested photocopies of proof of identity and proof-of-address have to be submitted with the application form.
CAMS stands for the Computer Age Management Services Pvt. Ltd. It is an organization which has been authorized by the AMFI (Association of Mutual Fund of India) to be a processing agent on their behalf.
If you have completed 50 years of age as on May 31, 2010, you may obtain a NISM Mutual Fund Distributors Certificate by either:
- Passing the ‘NISM – Series – V – A: Mutual Fund Distributors Certificate Examination’ (or)
- Successfully completing the NISM’s CPE Program for Mutual Fund Distributors
After NISM verifies the authenticity of the documents submitted by the participants, your certificate will be sent in electronic format only, to the email id provided in the Registration form. You are expected to receive the certificate in about 30 working days from the date of the CPE Program
The status of your certificate can be tracked by calling NISM Helpdesk at 8080806476 or mailing to email@example.com.