How to Become a Mutual Fund Agent?

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How to Become a Mutual Fund Agent

Known as the Wizard of Omaha, Warren Buffet once said, “The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” This is an imperative aspect of a career in investment banking. A mutual fund is basically a company that combines financial resources, i.e. money from various investors in securities such as bonds, stocks as well as short-term debts. If you are fascinated by the world of investments and funds, you can explore diverse career prospects in a specialised field of Finance which is referred to as Mutual Fund Distribution. This blog will provide you with a complete guide on how to become a Mutual Fund Agent, how it is different from a Mutual Fund Advisor along with eligibility requirements and commission structure you need to fulfil to pursue a career in this field.

Who is a Mutual Fund Agent?

An individual who facilitates the buying as well as selling of mutual funds through investors and is awarded commissions for bringing in investors for mutual fund schemes is known as a Mutual Fund Agent. The agent is responsible for keeping a track of the performance and functioning of the Mutual Fund industry along with collaborating with the fund research in a timely manner to identify the best options for investments and intermittent risks. They are also responsible for conducting finance and investment analysis and monitor the important developments in the market, industry and the economy in general. This profession requires a high level of knowledge of mutual funds, stocks and markets. There are several training programs that equip students with the essential skills and insight into the process of how to become a Mutual Fund Agent. 

Difference between Mutual Fund Distributor and Mutual Fund Advisor

A Mutual Fund Distributor and a Mutual Fund Advisor are registered and regulated entities and have the key responsibility of helping in different investment decisions including the mutual fund scheme selection. Mutual Fund Distributors are centrally involved in Mutual Fund Products while Mutual Fund Advisors have more products and services to handle. The latter one also possesses a broader perspective of investor’s assets assessment, income, liabilities, expenses and the recommended products. A Mutual Fund Distributor is responsible for analysing the investor’s risk/situation profile and recommending products that suit the investor’s needs.

Eligibility Requirements

There are certain requirements that need to be fulfilled to understand how to become a Mutual Fund Agent. Here is a list of the basic requirements you need to keep in mind to discover this career field:

  • The candidate needs to be 18 years or above.
  • You should have completed your Senior Secondary education, i.e. 12th standard as well as 10th standard with at least 3 years of diploma in any field. 
  • A degree in Finance or Investment banking is generally preferred.

While there are no specialised degree courses for those planning to become a Mutual Fund Agent, you can pursue a degree in Investment Banking, Stock Training or Finance to learn about this field. Here are top courses you need to consider to learn about the essentials of mutual funds and investments:

Course University
MSc Corporate Finance and Investment Banking Burgundy School of Business
Master’s in Financial Economics Cardiff University
Master of Applied Finance University of Western Australia
Bachelor’s in Finance, Investment and Risk
MSc in Banking, Finance and Risk Management
Glasgow Caledonian University
MSc Finance University of Kent
Master’s in International Banking and Finance London Metropolitan University
Masters in Financial Markets Mykolas Romeris University
Master in Stock Market and Financial Markets EAE Business School
MS Finance Lewis University

How do Mutual Fund Agents Get Paid: Commission Structure 

Mutual Fund Agents with a thorough knowledge of debt markets and equity are always in demand in the finance sector. The industry offers various career opportunities in wide-ranging areas such as Marketing, Investments, Product Development, HR, Sales and Compliance across different management levels. A Mutual Fund Agent can also generate revenue sources for themselves through some specific Commission Structures. This way, they can opt for additional earnings by working independently. Here are the major two commission structures commonly practised by Mutual Fund Agents: 

  • Upfront Commission: This is sold to the agents on the successful first sale of plans and is a part of the total expenses. As a Mutual Fund Agent, you will be entitled to this commission after the completion of fresh investment. 
  • Trail Commission: This is considered as the principal mode of earning for Mutual Fund Agents. You are entitled to this commission till the time your client remains an investor in the mutual fund. It is calculated on the basis of percentage of your asset under management. 

Hopefully, this blog has directed you in the right direction regarding the question of how to become a Mutual Fund Agent. If you want to know more about the career prospects in Mutual Funds, get in touch with the experts at Leverage Edu to explore this specialised field as well as the diverse prospects it offers.

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