Career Opportunity As Mutual Fund Distributor in India

In the modern era, mutual funds have emerged as one of the most popular investment vehicles for building wealth. The Mutual Fund industry has been witnessing sharp growth in the last few years. According to a report recently published by Mordor Intelligence, a market research firm, the AUM or Assets under Management in India's mutual fund industry has grown fourfold in a decade (2010-2020) and is expected to increase by the same length by 2025.

The addition of new investors over the past few years has dramatically fueled the industry's expansion. Kudos to AMFI for organising mutual fund awareness campaigns like "Mutual Funds Sahi Hai". Also, credit goes to the Mutual Fund Distributors who reach out to new investors and assist them in choosing the appropriate mutual fund schemes as per their needs. Like a navigation app that helps us to reach our destination, a Mutual fund distributor guides investors to achieve their investment objectives. They analyse the financial needs and risk profile of clients and provide suitable guidance on mutual fund investment on an ongoing basis.

Despite rapid expansion, the AUM of the Indian mutual fund industry is still low compared to other developed countries. India's AUM to GDP ratio is 17%, while that of the US, France, and the UK is 140%, 80%, and 67% respectively (AMFI & World Bank, 2021). The low penetration of mutual fund investors in India and the projected growth of the industry highlights the growing need and potential for mutual fund distributors. Despite the immense potential, the number of mutual fund distributors in India is just over 1.31 lakh, i.e for every 10,000 people there is only one mutual fund distributor (AMFI, 2022). Hence, there exists a great opportunity for individuals who aspire to make their career as a Mutual Fund Distributor.

The mutual fund distribution business offers an array of benefits that make it an attractive profession.

1) Ownership - Becoming a mutual fund distributor is more like a profession and can give you the freedom of being your own boss. There are no monthly business targets and distributors can work at their convenience in terms of time and pace. Distributors have the flexibility to grow business as per their passion and calibre and achieve the scale of business that they desire without any limits.

2) Unique commission-based income - The commission that the mutual fund distributors earn is known as trail commission. Trail commission is quite unique in nature and the payout is done on a monthly basis. It is calculated on the market value of the clients' investments and is received as long as the investor stays invested. Over the period of time, as the investment value grows, the distributor also benefits in the form of higher commissions.

3) Satisfaction - Beyond financial benefits, the mutual fund distribution profession offers a great sense of satisfaction. Distributors have the opportunity to make a significant impact on their client's life by providing them with decision-making inputs, handholding during uncertain times, resolving issues, and helping them achieve their financial dreams. In the complex world of investments, investors are always seeking guidance, and the right mutual fund distributor can make a substantial long-term financial impact.

Overall, mutual fund distribution is a rewarding profession offering both personal and financial fulfilment. Distributors can be empanelled with AMCs directly or can get associated with national distributors who are equipped with services like tech support, customer care, and marketing among other services. Anyone over the age of 18 ranging from a college student to a housewife who has cleared the NISM V-A mutual fund distribution examination and has to register with AMFI to start a mutual fund distribution business. According to AMFI, the mutual fund industry in India has the potential to cross an AUM of 100 trillion by the end of this decade providing a wider career choice for the ones who are planning to enter the distribution industry. We hope this article will provide you with clarity on the mutual fund distribution business and motivate you to join this promising industry.

(By Mr. Misbah Baxamusa, CEO,NJ Wealth Financial Products Distributors Network)