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Mutual Fund Agent

Working as a Mutual Fund agent for selling Equity and Debt instruments also have scope for generating good amount of commission. Since the percentage of commission has been decreased the volume of transactions should be higher.

 

 

 

Earning of a Mutual Fund Agent

There are 3 components of commissions earned by Mutual Funds Agents

1) Commission from Client
This is the commission which customer pays to the agents for their service. It generally ranges from .5% 2% . It should depend on the quality of advice your agent provides . This is the commission you will pay to agent every time you do the investment . After the abolision of entry loads, client has to compensate the agents directly.

2) Upfront Commission
Upfront commission is the commission paid by AMC (mutual funds company) to agent in the first year. The commission varies from one AMC to another and varies across different categories of mutual funds. Equity Mutual funds generally give higher upfront commissions,whereas debt funds give lower commissions.

3) Trail Commission
This commission is mostly hidden from general public. This is most important part of commissions and main earning of mutual funds agents in long run. Trail commission is the commission paid to agents by AMC in subsequent years. The most important point you should know is that trail commission is percentage of total AUM (total worth of customer).
 

AMFI Registration

To work as Mutual Fund agent the person should be registered with AMFI. The details are:

AMFI introduced the process to register the intermediaries who have passed the certification test as AMFI Registered Mutual Fund Advisors (ARMFA), thus laying the foundation for an organized industry and allotting a unique code-AMFI Registration Number (ARN) alongwith an identity card. SEBI recognizing the importance of this initiative taken by AMFI had made Registration with AMFI after passing AMFI Certification Test compulsory for intermediaries.

SEBI has clarified that after obtaining certification as per changed mandate, the requirement of registration with AMFI in terms of its circular dated November 28, 2002 would continue.

As such, all AMFI/ NISM Certified Intermediaries engaged in marketing and selling of Mutual Fund schemes are required to be registered with AMFI after passing AMFI/ NISM Certification Test. The Mutual Funds will not be able to deal with intermediaries who are not registered with AMFI and obtained ARN.

 

 

 

EMPLOYEES OF CORPORATE (NON-INDIVIDUAL) ARMFA In terms above mentioned notification and SEBI circular, employees of Corporate (non-individual) ARN holders who are engaged in marketing of Mutual Funds Products, are also required to pass test and register with AMFI, under ARN of the corporate. AMFI Registration Number (ARN) : SALIENT FEATURES The AMFI Registration Number (ARN) has been introduced as the unique code, which identifies the intermediary as ARMFA.  

ARN is a unique number allotted to:
 

  1. Individual agents, brokers, and other intermediaries engaged in selling Mutual Funds, having passed the AMFI/NISM Certification Test and agreeing to abide by the code of conduct.

  2. Corporates engaged in the business of selling Mutual Funds, which apply to AMFI and agree to abide by the code of conduct.

A photo identity card indicating the validity period of ARN, would be issued to persons applying for allotment of ARN, after passing the AMFI/ NISM test.
 

 

 

  1. Individual intermediaries would have a card with their unique ARN and his/ her name and photo.

  2. Employees of corporates would have a card with the ARN of their employer and his/ her name and photo.

Corporates would be issued Certificate of Registration indicating validity period of ARN. The application for registration of corporate bodies should compulsorily be accompanied by the application for registration of corporate employee.

Passing certificate issued by National Institute of Securities Market (NISM) in respect of 'NISM - Series V-A : Mutual Fund Distribution Examination' has validity period of three years. Accordingly, ARN issued against such certificates as well as renewed ARN on or after June 1, 2010 shall have validity period of three years. In case of corporate entities validity period for Certificate of Registration issued is 3 years.

No distributor shall hold more than one ARN card/ Certificate of Registration

After obtaining ARN, the intermediaries should approach the AMCs for empanelment and they can canvass Mutual Fund business of the respective AMCs only after empanelling with them.

Registered intermediaries can be de-registered as the ultimate censure, for the following reasons:
 

 

  1. Violation of the code of conduct.

  2. Being indicted for serious offences by a regulatory authority.

  3. Complaints of gross negligence upheld by a consumer court.

AMFI Guidelines & Norms for Intermediaries ("AGNI") In order to promote best practices and ethical standards in the business of sale of Mutual Fund schemes, AMFI has formulated broad guidelines and norms including a code of conduct for the intermediaries, which will be applicable to ARMFA. AMFI believes that a sincere endeavor to adhere to the guidelines and the code would help promote best and healthy practices in the area of sales and marketing which would ultimately benefit all concerned - the investor, the intermediary and the industry as a whole.
 

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