If you want to become a distributor of mutual fund products but registration fees is something which is bothering you, there is good news. Now you can become a distributor without shelling any buck out of your pocket.
Yes, it's true. Industry body Association of Mutual Funds in India (Amfi) has waived off registration fees for all the distributors who would be registering for the first time.
In a drive to boost up number of distributors and increasing mutual fund sales, Amfi has made registration fees zero from 1 February till 30 June this year. The association hopes that by this move it will be able to add up around one lakh additional distributors in the industry taking it to 1.5 lakh from the current 50,000 active distributors.
There will be no registration fees for new distributors in the categories of Individuals (including senior citizen) and new cadre of distributors. In November last year, Amfi had slashed the registration fees to Rs 3,000 for three years per distributor from Rs 5,000 which now stands free.
V Ramesh, deputy chief executive officer of Amfi, told Business Standard, "We hope that by waiving off the registration fees for distributors we will be able to add around 1 lakh new distributors. The measure is a part of the re-energising of the entire mutual fund sector."
We need to increase sales, Ramesh adds, but if there are no distributors especially in the smaller towns and cities, increasing sales is not possible.
During mid of last year, when Prime Minister Manmohan Singh talked about re-energising the mutual fund sector, within months of that the capital markets regulator or Securities and Exchange Board of India (Sebi) came out with its detailed plan in September which included retired government employee and postal agents too in the distribution space.
"Waiving off the fees is the culmination of all these actions from the government as well as the Sebi," explained Ramesh.
Pooling in the high savings among Indian households to equities has been major challenge for the mutual fund players. Despite having world's one of the highest saving rates (30% plus), the surplus money could not find way into mutual funds. As a result of it, the penetration of mutual fund products in India remains abysmally low at less than 3% of country's population.
Though, time and again industry's executives have acknowledged the fact that there is huge potential in the smaller towns and cities of the country, nevertheless by and large it remains untapped. Now, with Sebi allowing fund houses to charge extra bucks if they manage to pull in funds from beyond top 15 cities of the country, fund houses are in process how to use the opportunity well.
During CY2012, industry's assets stood at Rs 7.86 lakh crore, up 15% against Rs 6.81 crore in the a year-ago period. Thanks to surge in stock markets and money flowing into income and gilt funds, sector managed a double-digit growth in its assets under management.
