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Frequently Asked Questions
The mutual fund distribution business in India presents significant opportunities, driven by the industry's rapid growth and increasing investor participation. As of March 2024, the Assets Under Management (AUM) of Indian mutual funds reached a record ₹53.40 lakh crore, marking a substantial increase from ₹39.42 lakh crore in March 2023.
AMFI India This growth is further evidenced by the surge in Systematic Investment Plan (SIP) accounts, which stood at approximately 10.23 crore, with monthly SIP contributions reaching ₹25,320 crore in November 2024. AMFI India
Despite this expansion, mutual fund penetration in India remains relatively low compared to global standards. According to the World Bank, the ratio of mutual fund assets to GDP for India was significantly lower than that of developed markets.
DataBank This indicates a vast untapped market, especially in semi-urban and rural regions, offering distributors the chance to educate potential investors and expand their client base.
The Securities and Exchange Board of India (SEBI) has implemented regulations to enhance transparency and investor protection, fostering greater trust in mutual fund investments. Additionally, the adoption of digital platforms has streamlined the investment process, enabling distributors to reach a broader audience efficiently. These factors, combined with the growing financial literacy among the Indian population, underscore the promising scope and opportunities for mutual fund distributors in the country.
Recent Trends in India's Mutual Fund Industry
ReutersIndia's small, mid-cap funds boost overall flows into equity mutual funds in DecemberToday
ReutersIndia's equity mutual fund inflows come off record highs in November
Mutual Fund Distribution is a rewarding business model due to its trail commission structure. This commission is based on the market value of client investments, ensuring regular income as long as the client’s investments remain active. The payout is typically made monthly, offering financial stability and growth potential.
Key Advantages of Trail Commission
- Market-Linked Income: Your earnings grow as the investment value appreciates over time.
- Long-Term Income: You earn continuously as long as your clients remain invested.
Example of Earnings: Managing ₹8 Crore AUM
If you manage ₹8 Crore of investments with a trail commission of 0.70% annually
- Monthly income = ₹46,667 per month.
As the stock market grows and you add new clients, this income can increase substantially.
Illustration: Trail Income on ₹1 Lakh Over 15 Years
Assume a 13% CAGR (Compounded Annual Growth Rate) over 15 years. Here's how your trail commission would look:
Year AUM Growth (₹) Trail (₹) Cumulative Trail Income
1 113000 660 660
2 127690 745 1405
3 144285 842 2247
5 184251 1075 5276
10 336414 1964 14860
15 614991 3587 31290
Assumed CAGR 13% & Trail considered 0.70%
NFA Fino Value pack Registration Fee
(NFA Fino Subscription Fee - ₹3000 + Exam NISM VA Exam - ₹1500+GST) = ₹4800
ARN Application - ₹3000+GST (To be paid separately to CAMS separately as an individual. ARN Fee for non-individual are different from individual fee.
For Existing ARN Holders
₹2000 as NFA Fino Subscription Fee to be paid
* Taxes if any to be paid extra
In case you fail the exam, you simply need to pay ₹1500+GST to reappear for for the exam again.
No, there is no limit to appear for this exam.
We provide
· Online study material
· Online training
· Self -online learning videos
· Mock tests
· Revisions sessions
Candidate needs to study 1 hour daily for a week to clear the exam.
Exam will have 100 questions of 1 mark each
Passing marks are 50. There is no negative marking.
Yes, there is a refund criterion. Any NFA Fino partner fulfilling any one of 2 below criteria within 3 months of partner enrollment can apply for refund of ₹1000
₹30000 Net SIP or
₹15 Lakh Net Equity Sales