Who is a Mutual Fund Advisor & How to Become One

Mutual fund advisors are qualified professionals who help investors to make the right decision for investing in mutual funds. They provide tailor-made strategies to their clients, as per their risk appetite, financial goals, investment horizon, etc. 

The process of becoming a mutual fund investment advisor is straightforward. As per the rules of the Association of Mutual Funds in India (AMFI) guidelines. To become an MF advisor or an agent, one needs to clear some certifications such as the NISM series VA Mutual Fund Distributors Certification, and get an ARN number. 

After passing the examination has to obtain an ARN (AMFI Registration Number) by approaching AMFI through CAMS-KRA. Once the exam got cleared, you will get the AMFI number and card at your registered address within a few days. 

Who is a Mutual Fund Advisor?

The source of earnings of mutual fund advisors is in the form of a commission. They take it from the fund house or distributors on selling each mutual fund scheme. In actuality, mutual fund advisors sell their expertise to clients. 

They analyze the market and make a portfolio of different mutual fund schemes aligning with their customer's financial goals. They keep themselves updated with the market updates and help their clients to buy or sell the funds accordingly. Mutual fund advisors follow qualitative and quantitative frameworks to choose the best-performing investment funds. 

After the investment, the advisor also guides the investors to make updates to their portfolio such as adding, increasing, and redeeming the SIPs. They do this when MF advisors identify any challenge or potential opportunity in the market.

How to Become a Mutual Fund Advisor?

To become a mutual fund advisor, follow the below steps:

Step 1: Registering for the NISM Exam

Login into the NISM portal and apply for the NISM Series VA Mutual Fund Distributors Certification. Pay the fees of Rs. 1500 and the mutual fund advisor exam will be conducted at the National Institute of Securities Market.

Once the registration gets complete, the applicant can download a PDF to prepare for the exam, also you can purchase a hard copy of the study books from the books store or e-commerce websites.

Step 2: Mutual Fund Advisor Examination

The candidate can give the exam from their home online mode, after completing the exam the result will appear on the screen. The applicant can download the result in the e-format of the certification from the NISM website. And, the hard copy of the certificate will be delivered to the mentioned address within 30 days. The validity of the mutual fund advisor certificate and CPE program is 3 years from the date of passing.

Step 3: Obtaining the ARN

Once the candidate clears the exam, they have to undergo the mandatory Know Your Distributor (KYD) process. And apply for obtaining an AMFI Registration Number (ARN) before selling or advising the clients about mutual fund plans.

Provide the details such as PAN number, NISM Distribution Certificate Number, and other details in the application. The form must be submitted through CAMS-KRA offline or online through Cams Online mode as per the requirements.

After the approval of an application, the ARN number will be provided to the applicant. Also, their card will be delivered to the registered address within a few days. The fee to get the ARN number is Rs. 3000 does not include GST.

Step 4: Register with Distributor or AMC

After receiving the ARN number, you can start selling mutual funds and earn a commission. Now you have to sign an agreement with an AMFI distributor to sell MF. 

To sell the mutual funds as a distributor, the MF advisor can directly enter into an agreement with AMC or a fund house. It is always better to connect with the distributor as it avoids hassle of the registration and documentation.

Educational Qualification and Age Limit

There are no such requirements set by NISM, regarding the minimum qualification of a Mutual Fund Advisor. But the minimum qualification to appear for the examination is class 10th, class 12th, or a Diploma of 3 years. 

However, if the candidate has a degree in finance, economics, or investment, then it will be helpful for the advisor to make a good start in the industry. Along with this, the minimum age should be 18 years or above. There is no limit on the maximum age.

Conclusion

If you are looking to start a Mutual Fund business, you can start by following the above steps. But remember, a mutual fund advisor is a reputable job because customers show trust in you for their financial goals. You manage the portfolio, do risk management, track the funds and their growth, and then suggest to the clients. Apply with NISM and get the mutual fund advisor certificate to start your mutual fund business.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.