Build a career in mutual fund distribution

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A quick Google search with the keywords ‘mutual funds careers’ will conjure an exhaustive list of wealth management and mutual fund companies who are on a hiring spree. Until a few years ago, the situation was different – a career in mutual funds distribution sounded like an alien concept in a society obsessed with conventional career options. This was also rooted in the fact that mutual funds as an investment vehicle was viewed with cynicism by retail investors in India and the prevailing sentiments among the majority of investors did not align with the risks of mutual funds.

As an increasing number of Indians have started warming up to the benefits of mutual fund investments in the last few years, the industry has been witnessing sharp growth. According to a report recently published by Mordor Intelligence, a market research firm, the assets under management (AUM) in India’s mutual fund industry has grown four fold in a decade (2010 – 2020) and is expected to increase by another fourfold by 2025.

Despite the changing notions about mutual fund investments, finding a reliable distributor continues to be a challenge for retail investors with women mutual fund distributors being even fewer in number. According to Moneycontrol.com, industry estimates suggest of the total number of mutual fund distributors, only 20 percent are women.

Parvati Iyer, chief investment officer at Femwealth, an online wealth management platform says, “As the number of Women investors is on the rise, there is a requirement for more women distributors. Studies have shown that women investors feel more comfortable with women financial advisors and distributors. Keen on long term relationships with an eye on the future and an ability to think through things and plan ahead, it is no wonder that women make better distributors. With an increase in the number of investments in mutual funds the number of distributors catering to investors is also less. There is a supply and demand gap.”

The first step

It is this spike in interest about mutual funds, especially among younger retail investors that led Sopan Sinha (28, name changed), a mutual fund distributor based in Dhanbad to embrace it as a serious career option. He narrates, “My father is a practicing chartered accountant and financial advisory is an offshoot at the firm he runs. A few years ago, when I was in college, we started noticing that there was a steady stream of clients (many of whom were my friends) who were keen on mutual fund investments and were looking for trusted advice and distributors. My innate interest in these investments came in handy but with time, as more people flocked on to the mutual fund bandwagon, I realised this could be a great career option and that’s when I decided to get my certification.”

Those aspiring to become mutual fund distributors will have to obatin the National Institute of Securities Markets Series-V-A: Mutual Fund Distributors Certification Examination following which they have to be registered with the Association of Mutual Funds in India and obtain a unique AMFI registration number.

Ease ushered by digitisation

Iyer opines that awareness on mutual funds has increased especially with campaigns such as “mutual fund sahi hai” owing to which they are increasingly becoming the vehicle of choice for investors. She says, “This makes the distribution business lucrative as well. Qualifying to become a distributor is very easy too – requires clearing NISM exams and then registering. Onboarding investors had become simple and easier with changes to the KYC procedures that lessens paperwork. Processes have been streamlined and it is easy to get started. Once onboarded, continuing regular investments or SIPs is also hassle-free.”

The popularity of mutual funds has also led to the nurturing of a healthy rapport between distributors and fund houses, Iyer explains. “Distributors remain the primary means for fund houses to acquire customers; therefore fund houses are more than happy to support distributors. Most fund houses also have a rich resource section on their websites to help investors as well as distributors. Since there are a wide variety of funds to cater to every type of need, the selling aspect of distribution is intrinsically facilitated too.”

The digitization of investment platforms has also enhanced the viability of mutual fund distributorship as a career option. “With most processes going online, the barrier to entry in making a career in this field is very low. This makes it a perfect option for housewives or students and they can run the business from the confines of their home itself,” Iyer says.

As a growing number of Indian women take charge of their finances, many express preference for female financial advisers. Vikas Gupta, CEO at Omniscience Capital also corroborated Iyer’s stance that mutual fund distributorship can be a great career option for women. He explains, “Traditional gender roles have made many women adept at budgeting and saving. These skills form the basis of home management. Investing is the next logical step and women aspiring to become mutual fund distributors can build on them. An increase in the number of women mutual fund distributors can play a pivotal role in making other women financially savvy and helping them get rid of their mental block. A trend like this can help in building societal wealth too.”

Key Takeaways

1) If you are interested in pursuing a career as a mutual fund distributor, you can speak to established players in the industry to get first-hand insights into the profession.

2) Keep a track of not just domestic but global trends as well in the world of mutual funds.

3) The digitization of investment platforms has also enhanced the viability of mutual fund distributorship as a career option.

4) Most fund houses also have a rich resource section on their websites to help investors as well as distributors.

5) Traditional gender roles have made many women adept at budgeting and saving. These skills form the basis of home management. Investing is the next logical step and women aspiring to become mutual fund distributors can build on them.