Why become a Mutual Fund Distributor? Is it a sustainable Career Choice?

Nirav Shah

“I was 23 when I decided to become a mutual fund distributor. Although I was passionate about finance and investing, I was worried because this wasn’t a conventional career choice. Now 10 years later, I have a huge clientele, handsome income and an office of my own, so I don’t regret my choice one bit.”

- Nirav Shah

Unconventional career choices are no longer the backup plan. In today’s time, one is as likely to get the same level of recognition, status and financial upgrade in an unconventional career as in the conventional one.

A decade ago, just like Mr. Nirav Shah, most people were sceptical about a career in the mutual fund industry. However, as people warmed up to the idea of investing in mutual funds, the demand for skilled and experienced people in the industry also increased.

A mutual fund distributor is someone who suggests suitable investment options as per your risk appetite and financial needs. He acts as a guide in your investing journey.

Today, mutual funds are one of the most popular investment options we have. The mutual fund industry has grown 4X in just a decade. It continues to see growing participation from Indian households. The industry still has the potential to grow exponentially as there remains a large percentage of the population that is yet to invest.

To boost the economic growth of India, there is a need to educate people about the importance of investing. Since investing in mutual funds is the best way for a common man to begin his investing journey, the industry does need professionals who can encourage people to invest in mutual funds and help them to make better investment choices.

Here are some of the reasons more people in the future will choose mutual fund distribution as a career.

Trail commission:- A mutual fund distributor earns income in the form of commission.

Trail commission is an interesting concept because it is not like transaction-based commission. A distributor gets trail commission on an ongoing basis as long as the investor stays invested. Plus, he gets the commission on NAV (Net Asset Value) of the investments that his clients make. This means, that if the investments witness gains, his commission will also increase.

Flexibility:- Being a mutual fund distributor is more like a profession rather than a job. It is similar to running your own business. Whereas some distributors get empanelled with AMCs to distribute their products, many more distributors associate with Platforms which equip you services like marketing, technological support, customer care etc. NJ India is one of the leading MF platforms in India with more than 27,000 distributors associated with it.

A digital model:- Traditionally, there was a lot of physical paperwork involved in the distribution of mutual funds. This also created a difficulty for the distributors to handle clients from different cities/states. But with the rapid technological advancement in the past decade, things have changed. Today, clients can provide their KYC details online and the distributors can open up mutual fund accounts for their clients. Platforms like NJ provide technology to distributors to work without any geographical restrictions and provide lot of value added services to clients.

Satisfaction – Money aside, the job satisfaction derived in this profession is immense. You are able to help people financially, resolve their issues, fulfil their dreams. In the complex world of investments, investors are always looking for right advice. Right guidance from MF distributor has a huge financial impact on the investor in the long term. Unlike other professions, the interests of MF distributor are aligned with the financial well being of the investor.

Now that we know why being a mutual fund distributor is a lucrative career, let’s see who can become a mutual fund distributor.

Who can become a mutual fund distributor?

- Any high school graduate, diploma certified or college graduate can become a mutual fund distributor.

- There is only one qualification required to become a mutual fund distributor which is to pass the VA - Mutual Fund Distributors Certification Exam, conducted by NISM (National Institute of Securities Market).

- The minimum age to be a mutual fund distributor is 18 years old.

- Work experience is always appreciated but it is not required to be a mutual fund distributor. Anyone from a fresher to a retired person, from a freelancer to a housewife, can be a mutual fund distributor.

Summing it up

Choosing your career is one of the most crucial decisions of your life. Whether to be a mutual fund distributor or not is really up to you in the end. You can track down some of the reputable distributors in your city, talk to them and then make your decision. Even national distribution companies in your city can guide you about the career growth path in this industry.