Factors to Consider for Starting a Mutual Fund Distribution Business

Factors to Consider for Starting a Mutual Fund Distribution Business

When it comes to doing business, the reasons for choosing a specific industry, service or product are always layered and personal. Driven by the purpose and aspirations of an individual, he or she selects a stream of business that will best suit their needs. Similarly, even in the Mutual Fund Distribution Business, there are some fixed and some variable factors that can sway your decision to pursue a career in it. For the unversed, here’s a list of factors to consider for starting a Mutual Fund Distribution Business.

5 Factors to Consider for Starting a Mutual Fund Distribution Business

  • Interest & Passion

Apart from being keen to be your own boss, you need to understand that being a Mutual Fund Distribution business will require you to stay up to date with the financial world. It will need you to talk to people and educate them about mutual funds and how a systematic investment plan under it can transform their lives. Your interest and passion should align with the idea of helping investors build wealth in the long run. It should make you proud.

  • Scope & Opportunity

The mutual fund industry has been consistently breaking all its records and progressing at an unparalleled rate. However, despite this growth, the gap between the number of investors and the number of distributors is wide. This makes the demand for distributors stand at an all-time high. Of course, the trail commission they earn with each sale adds to the prospect of Mutual Fund Business. As per AMFI, to serve 4,39,08,572 investors, there are only 1,54,051 mutual fund distributors as of February 2024.

  • Skills & Strength

Being a person of numbers can help, but what will eventually lead to success in this kind of business is to build and maintain strong relationships with clients. You must make the clients feel comfortable to share their financial background and aspirations with you so that together you can assess their future financial needs and risk appetite. For a credible start, you will also need to pass an exam by NISM to attain ARN and guide investors in making the right investment decision regarding mutual funds professionally.

  • Market Entry

The National Institute of Securities Markets (NISM) conducts a certification course, which is accomplished by passing the NISM Series V-A Mutual Fund Distributors Certification Examination. Anyone can take this exam irrespective of their occupation, gender or location. After clearing the NISM distributor exam, one must complete the mandatory KYD (Know Your Distributor) process and apply to AMFI for an AMFI Registration Number (ARN) to begin offering mutual funds and initiating investor investments. An individual must be over 18 years old to obtain an ARN.

  • Flexibility & Lifestyle

Being an AMFI-registered mutual fund distributor is a wholesome profession that offers individuals personal and financial satisfaction. As a distributor, the significant impact that you make on your clients’ lives makes this choice of business fulfilling and gratifying. Another plus point of this MFD business is that it offers great flexibility and growth potential to all aspirants, bringing the best work-life balance into the picture. This also allows you to plan and have a lifestyle that you would like.

Now you are cent per cent equipped to decide whether you would like to start a Mutual Fund Distribution Business. Wait no more, and make the right decision today.