In this competitive world, being one’s own boss appeals to many. However, only a few know how and from where to start their entrepreneurial journey. That being said, we can always look at the Mutual Fund Distribution business as a rewarding option.
Why and How to Start a Mutual Fund Distribution Business?
Market scope & opportunity:
Over the past two decades, the mutual fund industry in India has seen an unprecedented surge, touching new heights of growth and success. The Assets Under Management (AUM) of the Indian MF Industry have grown from Rs. 8.26 lakh crore as of December 31, 2013, to Rs. 50.78 lakh crore as of December 31, 2023, more than 6-fold increase in 10 years (Source: AMFI).As more and more investors are becoming aware of the simple yet rewarding results of long-term investment in Mutual Funds, the market is expanding at an unparalleled rate. The mutual fund distributor commission is another reason to consider the business.
However, to serve more than 4 Crore investors, there are only some 1.49 lakh mutual fund distributors, creating a huge gap between the demand and supply (Source: AMFI). This has created a golden opportunity for ambitious entrepreneurs to start their own businesses in the mutual fund distribution market and earn handsome trial commissions.
Market entry & criteria:
A mutual fund distributor analyses the investors' financial needs and risk appetite and guides them in making the right investment decisions regarding mutual funds. The investor, be it a seasoned one or a beginner, trusts the distributor with his hard-earned money in the hope of building wealth over time. Understanding the importance of the role of a mutual fund distributor, SEBI has mandated that anyone who aspires to become a mutual fund distributor, including individuals, employees of asset management companies, and employees of other organisations involved in the sale and distribution of mutual funds, must clear a certification exam.
This certification course is conducted by the National Institute of Securities Markets (NISM) and is called the NISM Series V-A Mutual Fund Distributors Certification Examination. Anyone can take this exam irrespective of their occupation, gender or location. It assesses the knowledge and skills of individuals who wish to sell and distribute mutual funds in India. Through this examination, distributors can enhance the quality of their sales and distribution and enter the market with the apt knowledge and practical know-how to serve better.
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 fund advice and initiating investor investments. An individual must be above the age of 18 years to obtain an ARN.
Work ethics & work-life balance:
Being an AMFI-registered mutual fund distributor is a wholesome profession that offers individuals personal and financial satisfaction. It is a noble business as the core offering of the distributor is to help their clients achieve their financial dreams. Distributors’ income grows when the investors’ portfolio grows. Hence, the interests of a distributor are completely aligned with the financial well-being of their clients. When distributors contribute to fulfilling the dreams and financial needs of their clients, they can have the satisfaction that they are not just working to earn, but they are working to spread happiness amongst the masses.
This also adds a great sense of responsibility, ownership and work-life balance to the job satisfaction of the distributors. The significant impact that the distributors make on their clients’ lives makes this choice of business fulfilling and gratifying.
So what are you waiting for? Get in touch today with NJ Wealth and start your journey of becoming a mutual fund distributor online.
