Mutual Fund Distributor Salary

A mutual fund distributor’s earnings vary according to their associated brokerage platform. They work on a commission model. Upon acquiring a new customer for the brokerage house, mutual fund agents are granted a pre-decided amount as a commission.

The value of this commission primarily depends on various factors, ranging from the amount of investment to the type of fund scheme. The key is to find the right fund house that rewards your efforts.

Given that the earnings fluctuate, the salary of a mutual fund agent depends on their efforts. It is highly scalable, allowing one to amass significant money if they work extra hours.

But how much can a mutual fund distributor earn in a month? Or a year? This blog will answer these questions by assessing the specifics of a mutual fund distributor’s salary.

Salary Structure of a Mutual Fund Distributor

The role of a mutual fund distributor is to act as an intermediary between brokerage platforms and users. However, they cannot directly request a commission from the user. These distributors are paid in commissions by the respective brokerage platforms.

But they do not have a uniform salary structure. How much a mutual fund distributor earns depends on the investment made by the onboarded user, the value of SIP decided by the user, and the type of scheme.

Commission Structure by Type of Scheme

Mutual funds are synonymous with two kinds of schemes – equity and debt. Equity schemes pool a significant value of their total investment in the stock market. Their focus is on the changing market movements to increase the value of initial investments.

Debt schemes invest in fixed-income instruments, namely bonds and corporate debt securities. It is a more passive investment option with lower risk than equity schemes.

Based on the choice of scheme, the mutual fund distributor commission changes as follows:

• If the onboarded user chooses equity schemes, the agent can receive up to 1% of the total investment value.
• If the user opts for debt schemes, the distributor gets 0.5% of the total investment amount.

Commission Structure by City

The Associations of Mutual Funds in India (AMFI) is the country's official regulatory body of mutual funds. This organization has divided the investors into two categories:

• Individuals from the top 30 cities (T-30)
• Individuals belonging to cities other than the top 30 (Other than T-30)

This distinction plays a defining role in impacting the commission structure of a mutual fund agent.

If one secures a user from any of the cities other than the top 30, they gain a higher commission. The aim is to encourage more investments from tier 2 and tier 3 cities, especially considering that only 17% of the total investments have been from other cities in 2023.

Mutual Fund Distributor Salary in India

Individuals looking to enter the business often enquire about how much a mutual fund distributor earns. While the AMFI does not directly release these figures, it provides an estimate with the commission disclosure of each fund house.

According to the latest figures from 2021-22, it is safe to assume that fund houses spend hundreds of lakhs in payments.

But if approximations from AmbitionBox are to be believed, the salary range starts from Rs 1.3 lakh and goes up to Rs 5.3 lakh per annum. However, most mutual fund distributors earn a yearly average of Rs 2.3 lakh.

Is it a Sustainable Career Option?

The path to becoming a mutual fund distributor does not come with any financial roadblocks. You can get started by appearing for the mutual fund certification exam, which costs Rs 1,500. It is a one-time investment to help secure your license and begin practicing as an official mutual fund agent.

Next, you can partner up with a brokerage house or platform of your choice. Most of these establishments also provide you with the tools needed to get started. What’s more, these are free of cost! So, your initial investment does not exceed Rs 1500.

Apart from these, here are some benefits you can enjoy:

• Flexible work hours
• Freedom to multiply your earnings as needed
• Communicating with diverse investors all over the country
• Monetary benefits on every investment made by the user

With low capital investment, this role enables you to amass close to Rs 2 lakh per year, resulting in a profitable venture. Plus, you can always expand the business by hiring more distributors and increasing the capital gains for your firm.

As you gain more experience, you will notice several platforms initiating contact with you, giving you the leverage to bargain for increased commission on each investment.

Gradually, you can gain popularity in the market while earning significantly more than what you started with!

Final Thoughts

The role of a mutual fund distributor comes with several perks. Flexible work hours without the threat of micromanagement are beneficial. However, the commission is the most attractive element.

The nature of this role allows an individual to scale their earnings. Plus, there is no upper limit on how much you can earn. As long as you bring clients to the brokerage firm, you will find a steady stream of salary coming your way.

However, it requires some patience and significant experience in the market. You can ask for higher commissions and better percentages on equity and debt funds as you become more successful.

Once you receive your certification, you can partner with established and reliable brokers like Choice India to receive attractive commissions and improve your earnings!