Mutual Fund Advisor: Everything You Need To Know

Mutual Fund Advisor: Everything You Need To Know

Some individuals try to recommend specific funds by contacting you. Remember! Have you ever think who are they? Yes, there is no doubt that mutual funds are capturing the investment field by their schemes and they have become a popular investment option in a few years. But for investing in mutual funds you need dept knowledge and understanding of it.

Nowadays there are multiple mutual fund advisors available online and offline to assist in making your investment easy. Through investing in mutual fund schemes a mutual fund advisor helps the client to increase/ protect their wealth and reach financial goals.

A mutual fund advisor after assessing investors’ investment horizons, financial goals, risk appetite then only provides financial advice to them. Mutual fund advisors keep their clients updated related to various schemes in the market and various events that may disturb the schemes. 

Here in this post we will in detail guide you about the working of mutual fund advisors. 

“In investing, what is comfortable is rarely profitable.” — Robert Arnott

Also, read| How Mutual Funds Work?

What Are Mutual Fund Advisors?

They assist you in making your investment decisions by understanding your needs and goals. The work of a mutual fund advisor is to figure out which fund matches the investor’s need.

For becoming a mutual fund advisor a person needs to qualify for the Mutual Fund Distributors Certification Examination and have a valid certification from the National Institute of Securities Market (NISM). Don’t worry a mutual fund advisor won’t take advantage of you. There are certain laws to ensure and maintain ethical rules and regulations for that.

The mutual fund advisor has an ethical responsibility to disclose all the details about investments. The amount of compensation a mutual fund advisor is receiving for recommending certain investments they should focus on that, by avoiding various conflicts of interest. 

Roles Of Mutual Fund Advisors

Roles Of Mutual Fund Advisors

These are the various roles and responsibilities of a mutual fund advisors-

1- Understand investor’s need

  • For making the investor reach their financial goals an investor first has to understand their needs.
  • The mutual fund advisor advises an investor only after understanding the purpose of the investor.
  • Like whether the investor wants to invest for retirement, wealth creation, savings for higher education, etc.

2- Educating the investors/client

  • Now in the second step, the advisor after understanding the financial goals prepares a plan for them.
  • The mutual fund advisor then needs to educate the client on “how to achieve those financial goals”.
  • Through exploring the different investment options you can evaluate how each investment can help the client in reaching their financial goals.

3- Evaluating risk-taking capacity of investors

  • Based on the risk-taking capacity of the client an investor suggests the best investment option for them. Like equity funds are riskier than debt funds.
  • Even some investors are not aware of the risk tolerance, they need to be educated by their mutual fund advisors.
  • Mutual fund advisor makes the investment strategy by understanding the short-long term financial goals, age, family, etc.
  • Mutual fund advisors play a vital role in helping clients become aware of their risk appetite.

4- Analyzing investment options

  • After analyzing the client’s goals, requirements, and risk appetite the mutual fund advisor then suggests investment options to them. Like equities, debt funds, etc.
  • MF advisors also keep themselves up to date with news and trends, so that they offer relevant advice to investors.

5- Portfolio Diversification

  • Mutual fund advisors keep their focus on the client’s portfolio diversification.
  • To minimize the risk of investors, the mutual fund advisor optimizes one’s portfolio. It negates risk with one’s investment and stops them experience too much volatility.

6- Recordkeeping

  • A  mutual fund advisor needs to maintain the records of investors like- transaction details, income details, services they provide, etc.
  • This is the last and important step ned to remember.

How To Become A Mutual Fund Advisor?

How To Become A Mutual Fund Advisor?

For becoming a mutual fund advisor you need to follow these simple steps-

1- Register for the NISM exam

  • First, through the Mutual Funds Distributors Certification Exam register for the NISM (National Institute of the Securities Market) exam
  • Log in NISM  website and pay a registration fee of Rs 1500.
  • The candidate after registering for the exam can download the PDF  file for preparation.
  • You can also study through online courses and textbooks.
  • The test then will be conducted at officially verified NISM centers.

2- Pass the NISM exam

  • After passing the NISM exam, you will receive a certificate to be a mutual fund advisor.
  • The result as a hard copy will be available 30 days after the test results.
  • Once the test results become available you can download the e-format of the result.
  • From the date of the exam, the validity of the certificate will last only for 3 years.
  • The CPE Program also has a validity of three years

3- Know your distributor

  • Know Your Distributor process is necessary for an individual who gets certified by passing the exam.
  • To get an AMFI Registration Number (ARN) the candidates need to apply to the Association of Mutual Funds in India (AMFI).
  • You can only start selling or advising mutual funds schemes in India after registering for an (ARN) number.
  • For the ARN application form, the candidate needs to provide their NISM Distribution Certificate, PAN, Adhar Details, etc.
  • Correctly filled forms need to be submitted through CAMS-KRA (KYC Registration Agency).
  • As per the requirements in a CAMS office, candidates need to either online or offline need to submit the form.
  • After all the documents are verified the ARN numbers are assigned to the candidate.
  • Within a day the mutual fund agent card will be delivered to the verified address.

4- Register with AMCs or Distributors

  • After receiving the (ARN) number the mutual fund agent is now a certified mutual fund advisor.
  • Now they can start selling to clients and earnings too.
  • Make sure for selling the funds you need to enter into agreements with AMFI distributors.
  • Distributors pay a commission to the advisor only upon the number of mutual funds schemes they sold.
  • The advisors have the option to enter into agreements or AMC themselves for selling the mutual funds. Instead of selling funds to the distributors.

How To Select A Mutual Fund Advisor

How To Select A Mutual Fund Advisor

  • Overall, the consultant is responsible for any statements or suggestions you make.
  • According to the guidelines of AMFI and SEBI, the MF advisor should follow the code of conduct for intermediaries. This explains what investors can expect from advisors.
  • Understand it with an example- They may ignore the risky nature of a fund and give you false information (verbal does not count). In that case, if they do so you can directly report them to SEBI or AMFI. Even their license could be revoked.
  • When it comes to financial advisors, look for at least 10 years of experience, especially in market volatility, as a matter of experience.
  • Using the ARN number check how the clients in past have rated him.
  • Understanding the outcome of different combinations check whether the advisor can explain asset classes in different funds.
  • Furthermore, if you feel that the MF advisor is trying to make your decision in hurry, he/she is not the one for you.
  • In long-term investments, market volatility doesn’t matter at all.

Difference Between Mutual Fund Advisor And Fund Manager

First, you need to understand that mutual fund advisor and fund manager both are different terms. They both vary from each other and you can not use them vice-versa.

Fund Manager- They handles and maintains the investment account and is also known as portfolio manager. By keeping the client’s long-term financial goal in mind a fund manager builds their portfolio.

Mutual Financial Advisor- By understanding clients’ financial goals MF advisors recommend the right investment plans to them. Therefore, successful consultants have superior analytical abilities, customer service skills, and subject matter expertise.

Helping the clients to set their financial objectives. In terms of commission, fixed fee, or both if you know how much an MF advisor can charge, it would be good for you. But these charges are different from the expense ratio or fee to the fund house. An MF advisor can bring a great difference with his/her experience and expertise.

Why Do Investors Need A Mutual Fund Advisor 

In the increasing market volatility, an investor needs professional help in choosing the right product according to their portfolio. As there are several products available across the asset class, it became difficult for investors to choose the right one. A professional mutual financial advisor can help investors to invest in the products according to their schedule.

MF advisors also help investors do asset allocation and help them in choosing the right product when they have a surplus of funds.

Top 10 Mutual Fund Advisors In India

  1. ICICI Prudential Focused Bluechip Equity Fund.
  2. Aditya Birla Sun Life Small & Midcap Fund.
  3. Tata Equity PE Fund.
  4. HDFC Monthly Income Plan – MTP.
  5. L&T Tax Advantage Fund.
  6. SBI Nifty Index Fund.
  7. Kotak Corporate Bond Fund.
  8. Canara Robeco Gilt PGS.
  9. DSP BlackRock Balanced Fund
  10. Axis Liquid Fund

How To Choose The Best Mutual Fund Advisor

How To Choose The Best Mutual Fund Advisor

These are the following tips you should consider before choosing a mutual fund advisor for you-

1- Check their experience in the field

  • The experience of a mutual fund advisor or manager will let a large number of investors gravitate toward that fund.
  • The mutual fund advisor has a lot to offer who has gone through at least one market downturn rather than one who hasn’t. Because crisis management enables one to handle future crises better.
  • Experienced mutual fund advisors will know very well what to do with different market scenarios.
  • Also, clients look for online mutual fund advisors who have been in this field for at least 10 years.

2- Assess their approach

  • Check the experience of MF advisors by the way they approach your financial planning.
  • An experienced and best mutual fund advisor will opt for a holistic approach to investment planning.
  • MF advisor will carefully carry out the risk appetite of the client and their financial goals.
  • MF advisor also checks the time needed to achieve the financial goals and organize the schemes to distribute clients’ portfolios accordingly.
  • The changing goals of the client are also acknowledged by the MF advisors. So that client’s risk tolerance and portfolio change accordingly.
  • Therefore, risk profiling and reallocating one’s portfolio is a process that must be observed continuously at different stages of life.

3- Ask for referrals

  • While searching MF advisors online you can check and reach out to investors they worked or working with.
  • Taking referrals of investors with similar financial goals from your MF advisor, you can talk with them.
  • Therefore while working with an MF advisor you can learn a lot.

4- Request transparency regarding compensation

  • From the date, direct mutual funds were introduced to India for MF advisors different models of commissions are exist.
  • A fund advisor, from a fund house or for being a distributor who sells the schemes of the house can earn commissions.
  • Therefore rather than the client’s goals, some MF advisor even sells their schemes to clients by keeping their commissions first.
  • That’s why it is advisable to understand the mode of compensation of your MF advisor.


Due to the plethora of roles and responsibilities a mutual fund advisor becomes a reputable and sincere job. MF advisors manage the risk, financial goals and track funds organized for their clients. Yes, no doubt investing in mutual funds and building a portfolio becomes very easy with a mutual fund advisor. It requires a mutual understanding between an MF advisor and an investor.

We have mentioned the steps above through which you can identify and select the best mutual fund advisor for yourself. Just remember to check some key features in your MF advisors like- holistic financial approach,  communication, trust, and proactiveness.

We hope you got all your questions cleared with the post regarding mutual fund advisors. Keep that in your mind before choosing your mutual fund advisor. Wish you a better and safe investment.

FAQ’s Of Mutual Fund Advisor

Benefits of investing in the best mutual funds in India?

The benefits of investing in the best mutual funds in India are mentioned below-

  • You get professional financial experts who search, study, analyze the performance of different schemes and then choose the best that suits the investor.
  • By diversifying the risk they help in the success of an investor’s portfolio.
  • Mutual funds provide an opportunity to invest a little amount like Rs 5000 as compared to others. That’s why people of different income groups can invest in mutual funds.
  • In mutual funds, you can easily encash your money as compared to other forms of saving in the market.
  • Variety of investment options available in mutual funds.

Do I need a mutual fund advisor?

Yes, a mutual fund advisor can help you in asset allocation, invest in products according to your schedule, help you in choosing the right product when you have a surplus of funds.

Which online app is best for mutual funds?

Mentioned below are the 7 best online apps for direct investment in mutual funds-

  1. Groww- Direct Mutual Funds App. Groww app is one of the fastest-growing apps in the Indian mutual fund industry
  2. ETMONEY Mutual Fund App
  3. myCAMS Mutual Fund App
  4. KFinKart- Investor Mutual Funds
  5. Zerodha Coin
  6. Paytm Money Mutual Funds App
  7. KTrack mobile app by Kar

How can I invest in mutual funds without a financial advisor?

Do you want to invest in mutual funds without consulting an MF advisor? These are ways through which you can invest in-

  1. Fee-Only Certified Financial Planner provides you with financial advice.
  2. You can read books about investing and personal finance.
  3. Choose a Low-Cost Brokerage Firm.
  4. Take benefits from Target Date Funds and Index Funds. 
  5. Portfolio diversification can help.
  6. Don’t forget to Rebalance Your Portfolio.
  7. Get Automatic with your Investments

Mutual fund investment websites in India?

According to ranking, these are the top 10 mutual fund investment websites in India-

  1. Economic Times
  2. Value Research Online
  3. Moneycontrol
  4. Invest Guru
  5. My Investment Ideas
  6. Roboadviso
  7. Money Excel
  8. Investica
  9. Free Fincal
  10. Wealth Trust

Which exam is required for a mutual fund advisor?

  • To appear in the mutual fund advisor exam your minimum qualification required is class 12 or class 10 pass with 3 years of diploma.
  • Your age should be 18 above.
  • You need to pass the National Institute of Securities Markets(NISM) V-A certification exam.

Mutual fund advisor income?

The salary of a mutual fund advisor in India is a maximum of about ₹38,583 per month.

Structure of mutual fund advisor commission?

Based on mutual fund companies and products a mutual fund advisor commission range between 0.5% to 1%. 

Nikita Dhyani

Nikita Dhyani is a Content Writer at Ionic Digitech. A passionate content writer and has been using her content writing skills to develop various content related to financial and business-related topics. She has done BAJMC (Bachelors in media and mass communication and journalism) from Graphic Era University. Her specialties include - Content creation, Content development, Media managing, Communications skills.

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