Steps for Becoming a Professional Mutual Funds Distributor
Mutual funds serve as the best form of investment for investors who do not wish to indulge in stock market analysis and selection of particular stocks. Helping with the selection of the best mutual fund, dedicated mutual fund distributors and managers serve as intermediaries between investors and mutual fund companies.
Working on commission, they help investors select and invest in the right mutual fund and therefore earn commission from mutual fund companies. Being a lucrative career, individuals can become a mutual fund distributed by fulfilling the eligibility criteria and completing the NISM certification exam. Following step by step on how to become mutual fund distributor can help individuals immensely looking for a career in finance:
- Knowledge about the mutual fund business
Individuals who wish to become professional mutual fund distributors must keep themselves updated about the mutual fund business. They must adhere to various rules and regulations concerned with the Securities and Exchange Board of India and possess the necessary abilities and communication skills. They must possess strong financial knowledge to identify the best mutual fund that fits within the risk tolerance of their clients.
- Eligibility criteria
Dedicated eligibility criteria must be fulfilled as well to become a mutual fund distributor. The criterion is as follows.
- Age: An individual must be at least 18 years old in order to qualify as a mutual fund distributor.
- Minimum education: No minimum qualification is required in order to appear for the National Institute of securities markets mutual fund distributor exam. However, knowledge about finance, economics, and the overall mutual fund business can help individuals immensely.
- Certification: Clearing the NISM certification exam is essential for becoming a registered mutual fund distributor.
- Possession of NISM certification
Individuals must appear and clear the dedicated NISM mutual fund distributor exam in order to pursue the business as a professional. Individuals must visit the official website of the National Institute of Securities Market, fill out the online application, pay the necessary fee, and appear for the dedicated examination. Individuals get a passing certificate after clearing the examination that is valid for three years. Individuals must then appear for the continuing professional education or CPE program every three years in order to renew their certification.
- Association of Mutual Funds in India registration
Individuals must then register themselves with the Association of Mutual Funds in India then issue a dedicated registration number to the authorized mutual fund distributors. An online application has to be filed to secure a registration number from AMFI.
- Obtaining knowledge and information update
Individuals must keep themselves updated with the new rules and regulations related to the mutual funds business. Apart from renewing their registration number, the mutual fund distributors must comply with all the requirements and follow the various regulatory changes made by the Association of Mutual Funds in India.
An individual must therefore clear the mutual fund distributor exam to get authorization for dealing in mutual funds. Proper approval and registration are imperative to pursue mutual fund distribution as a full-fledged career.