Our article will help you discover the proper way to become a mutual fund agent in a hassle-free way. We did extensive research and gathered many insights to compile this information. So, if you read it properly, it will surely help you make an informed decision.
What Does a Mutual Fund Agent Do?
Being a mutual fund agent, you must play various roles while interacting with prospects and maintaining a good relationship with them. Because with a healthy relationship with clients, mutual fund agents can help them grow their income and achieve financial independence. Ultimately, it will help you earn more commission and money over time. So, before discussing the steps to becoming a mutual fund advisor or agent, let’s also look at some prime roles of mutual fund agents.
1. Knowing the Client’s Needs
The primary role of a mutual fund agent is to know the client’s needs and goals. Based on their financial goals, agents provide relevant information, news, and ideal investment options. For example, if you have a new client, they want to know about new investment options. In this case, you will ask about their investment budget, goals, and other questions. So, you can suggest some value-for-money investment plans and help your client to increase wealth with little risk. You must know that every client may have different financial needs and goals. Hence, you must create a checklist to understand what your ideal prospect is seeking.
2. Providing Knowledge to Clients
Often, mutual fund agents suggest to their clients the recent financial product available for new investment. Moreover, they guide and help clients to build their investment strategy to keep the investment process on track. Sometimes clients need a detailed overview of the financial terms and knowledge; hence here, you will be required to provide thorough guidance with useful insights. You can help them choose their risk-bearing capacity and risk level based on their budget and portfolio.
3. Computing Risk Appetite of Investors
Most mutual fund agents also help their clients to understand risk appetite. They understand their client’s needs and many other factors affecting the investment and its ROI. Based on data-driven insights, these agents decide the risk appetite of their client investors. While deciding on risk appetite, you can check the marital status, monthly expenses, loan EMIs, and present income. For example, if your client carries a high-risk appetite, you can suggest they consider small-cap equity funds.
4. Comparing Multiple Investment Options
It’s another multi-faced and significant role of a mutual fund agent or advisor. It is because there are many investment options available to invest. However, to choose the most appropriate mutual fund investment option, you must understand the client’s risk appetite, investment goal, and expected ROI. Based on this information, you can easily find some suitable mutual funds within equity and debt funds. Moreover, you can also do a performance check after some intervals to ensure your client gets profitable deals.
5. Keeping Portfolio Diversified
Keeping the portfolio of clients diversified is essential for every mutual fund agent. They keep analyzing their client’s portfolios frequently and make relevant changes to keep them risk-free. As an agent, you must assist your client in keeping their portfolio diversified. You can research the best investment options and asset classes. Moreover, you can also use recent industry updates and strategies that most successful investors use and provide good results in high ROI.
How to Become a Mutual Fund Agent in India?
You have learned the roles and responsibilities of mutual fund agents. Let’s understand how to become a mutual fund agent in India and earn high commissions.
1. Filling Registration Form for NISM Exam
If you wish to become a mutual fund agent in India, you will have to fill out the NISM exam registration form. By filling National Institute of Securities Market (NISM) VA MFD certification program, you can take your first step to become an official advisor. However, filling out the exam form generally demands a nominal Rs 1,500 fee. After filling out your online application form, you can also access the PDF guide that will update you about this examination and its format.
2. Passing NISM Series V-A Exam
The next step is to appear and pass this mutual fund agent exam in India. It’s a computer-based exam where you will have 100 questions carrying one mark each. Moreover, once you complete the test and the result comes up, you can download the e-format certificate instantly. However, you will need to wait for the next 30 days to receive a hard copy. The certificate has three years’ validity, which means you will have to renew it after three years. But if you pass your exam and obtain your certification, it’s easy to renew it from time to time.
3. Registering with AMFI with CAMS Office
After clearing your NISM Series V- MFD certification exam, you are ready to become a distributor or agent. However, before you start working and generating money as a mutual fund agent, it’s required to know your distributor (KYD) and AMFI registration number (ARN). This application form is easy to fill out and submit; it contains basic details such as qualification, photograph, address, and exam details. While submitting this form, you must also pay a Rs 3,000 application fee. You will get your ARN card in a few days if you complete all processes correctly.
4. Getting Registered with AMCs
Now you have an ARN card which makes you eligible to make money as a mutual fund agent or distributor. However, it still needs a last but simple step; you will have to register yourself with all the mutual fund houses and asset management companies. Doing this will get all the resources, forms, and other things that will help you get a commission on each transaction. Generally, MF advisors and agents get a 30%-40% commission. But you can also check out which mutual fund houses pay you the highest commission to choose some of them. It will keep you managed and help you earn a high income as an MF distributor.
Eligibility Criteria to Become a Mutual Fund Agent
- Age Limit: Your minimum age must be at least 18 years old to become an MF agent. Although, you don’t have any maximum age limit for this job profile.
- Education: You must have passed your 12th or 10th with a three-year diploma program. However, if you have completed graduation or post-graduation in economics, the financial market, and investment, it will help you get a good start.
- Skills: You must have a strong understanding of the financial market, mutual fund schemes, and strong communication. In addition, you will also be required to have research skills, valid NISM, and other interpersonal skills needed to communicate effectively with the client.
Making a career as a mutual fund agent or advisor is a reputed career option in the private sector. There are a plethora of job and business opportunities that can help you achieve financial freedom and earn good money. However, before you start figuring out how to get a mutual fund client, it’s essential to know your educational qualification and other basic things. It will help you stay connected with legal compliance and maintain a good relationship with the clients. Thus, we hope you have a good idea of how to become a mutual fund agent or advisor in India.