MF Distributor

Why Should You Become a Mutual Fund Distributor?

Mutual fund distributor commission is usually marked on every mutual fund investment they make for their clients. With the growing popularity of mutual funds in India, there is potential to earn a good income.

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 and is expected to continue to grow into the next decade.

Despite rapid expansion, the AUM (Assets Under Management) of India’s mutual fund industry is still low compared to other developed countries. For example:

• India’s AUM-to-GDP ratio is 17%, while in the US, it is 120%.
• Other developed markets such as France and the UK stand at 80% and 67%, respectively.

The low penetration of mutual fund investors in India highlights the immense growth potential of this industry.

There is currently just over 1.31 lakh mutual fund distributors in India (as of AMFI 2022), which is approximately one distributor for every 10,000 people. This presents a great opportunity for individuals aspiring to make a career as mutual fund distributors.

Benefits of Becoming a Mutual Fund Distributor

1. Ownership:
   • You are your own boss.
   • There are no monthly business targets.
   • Distributors can work at their convenience, both in terms of time and pace.
   • Flexibility to grow your business according to your passion, skills, and desired scale without limits.

2. Unique Commission-Based Income:

   • The commission earned by a mutual fund distributor is known as "trail commission."
   • Trail commission is unique in nature as it is calculated monthly based on the market value of clients' investments.
   • Distributors continue to earn as long as the investor stays invested.
   • Over time, as the investment value grows, distributors benefit from higher commissions.

3. Well-Regulated Industry:

   • The mutual fund industry is well-regulated by SEBI, ensuring investor protection.
   • Investor interests are handled efficiently, which enhances trust in the system.

4. Better Growth Potential Compared to Other Products:

   • Mutual funds provide better growth potential than other financial products such as insurance, ULIPs, or fixed deposits (FDs).
   • They are beneficial for both investors and distributors, offering higher returns compared to other products available in the market.

How it is far better than insurance or similar products-

Do you know all the money that is invested in banks, insurance or similar products is ultimately comes into equality market via mutual funds and other routes. so bank & other earned hand some return and give you only (4.5)%: Mutual fund is such a business which gives you and investors a win-win situation. It is different from insurance traditional investment products in which agents Oiling and requesting them to give them policy. It is unique product which gives clients/investor a better opportunity to invest in mutual funds From their they can get (12-15)) retum easily So investors / clients approach distributor, apart from Insurance business agents have to look for clients Once distribute reveals benefit of mutual fund investing, clients

• Mutual Fund distributor generally heard about you have
• SIP Investment of 12000 for 15 years

If Mutual Fund Distributor does the following:

• Per Month:
  • Add to new clients per month
  • Lumpsum sales: 1 lakh per client (10 lakh/month)
  • SIP sales: 5000 per client (5400 SIP/month)

Mutual fund business earning growth path: