Mutual fund advisor : Importance, Role & Responsiblity

In the present day scenario, it is important to understand what are mutual funds. Also, which investment options are beneficial for future perspective. Taking the assistance of Mutual Fund Advisor in case of mutual fund investments will work more towards building wealth and living a healthy lifestyle. Many mutual fund advisors keep approaching you and recommend you invest in some funds. Are they professional person or company just hire them?. To cross-check hem there is a regulatory body that is SEBI and AMFI.

Investment in the mutual fund offers liquidity, diversification, expert management along with fund managers. But, it too calls for a specific level of awareness from the investor’s part. So, it is necessary to know your investment goals and risk profile that can assist you to pick a fund respectively. This is a situation where a mutual fund advisor can advise you.

Understanding who is Mutual fund advisor?

Mutual fund advisors are certified experts who can recognize the scope and differences of a fund. Their job includes estimating out which fund meets the investor’s interest. Thus, for becoming a mutual fund advisor one must have a valid certification from NISM (National Institute of Securities Market). An advisor has gentle handling power to understand the client’s investment goals and requirements. There are laws in status to assure moral compliance – ‘Fiduciary Duty’. It is the ethical responsibility of the advisor to reveal all details regarding an investment. They must withdraw conflict of interests and identify any compensation they get for suggesting some investments.

Many times people get confused between a MUTUAL FUND ADVISOR and  FUND MANAGER.

It’s essential to note that there is a huge difference between a fund advisor and a fund manager. A fund manager, also recognized as a portfolio manager, is accountable for managing an investment account. He also creates a portfolio, saving the client’s long-term financial goals in mind.

Mutual fund advisors are accountable for advising the right investment plan according to the client’s financial goals. Successful advisors possess superior logical abilities, subject matter expertise, and customer service experiences. This helps clients plan out their financial objectives.

Importance of mutual fund advisors

• A Mutual fund Advisor is a qualified and a trusted expert who recognizes and prioritizes your short, medium and long-term goals.
• He/she is the only person who can differentiate one fund from the another and let you know which is beneficial for you to invest.
• They also evaluate your income, debts and prevailing net worth and then forms a plan that fills your demand in the best way.
• If one is a fresh investor, a mutual fund advisor can assist you to settle the precise asset allocation to suit your lifestyle.
• They are important for investors as the money investor is investing in mutual funds is put at the right place by them The money is safe and secure from getting wasted.

Qualification of Mutual fund Advisors

It is important to understand your mutual fund advisors qualifications. The Association of Mutual Funds in India makes it necessary for individuals joining into service of mutual fund advisory to have an advisors certification. The advisors’ certificate is allotted by the National Institute of Securities Management (NISM). But simply relying on the certification too isn’t enough as one requires to search a little deeper into the philosophy and research method which he/she chooses while guiding clients. Besides, you require to guarantee that the advisor is not an individual who trades investments as “on the side” activity. Remember, working on the advice given by a mutual fund advisor who doesn’t possess the essential knowledge, could spell tragedy for your mutual fund portfolio.
The qualifying exam is ‘NISM Series V-A: Mutual Fund Distributors Certification Examination’. After clearing this exam, AMFI circulates an ARN Number.

Role of mutual fund advisors

• Giving knowledge to the investor

Based on the financial goals, the first responsibility of an advisor is to frame a financial planning chart for the clients. After the formation of the plan to explain and educate the client how to achieve the goals, this includes observing investment options. Hence, you can quickly decide how each can help or hinder the client’s financial goals.

• Examining investment choices

Once the client’s aims and demands are in position, the fund advisor performs an accurate analysis of market conditions. Then they suggest equity mutual funds, debt funds or money market instruments respectively. Advisors also stay up-to-date with the newest financial news and biases to assure they give suitable advice.

• Keeping records

One major aspect of a fund advisor job is to manage the civil financial details of the client. Therefore, he/she keeps the records of services they give – invoices, features of services offered and any other transactions. This documentation is necessary during the audit of the firm by administrative bodies.

• Plan the right investment procedure

After examining the feasible investment plan of the customer, the fund advisor outlines a proper investment procedure. The procedure includes merging various investment options to expand the portfolio to reduce risks and higher returns.

• Helps in setting financial goals 

Looking on to your demand and needs they analysis that which is the perfect mutual fund for you for example if you want long term-investments with the higher risk they will ask you o invest in equity mutual funds. And if you want short-term investments and less amount of risk they ask you to invest in debt funds.

• Estimating risk-taking aptitude

Advisors recommend the right investment plan based on the risk appetite of the investor. For instance, debt funds have less amount of risk. The advisor examines the long term and short term financial goals of debt funds, investment security, age, costs, family status, and prevailing financial responsibilities before devising an investment plan.

• Advising investors diversify their portfolio

Diversification is essential since it acts a major role in reaching the entire risk over a large investment range. A lot of research goes into following the best investment choices over sectors and markets. Accordingly, the mutual fund advisor plays a vital role in optimizing portfolio and reduce risks.

Documents required to become a Mutual Advisor

Here are the following documents:

•  AMFI to the Individual, Senior Citizen, Partnership Firm or Company allotted ARN Number
•  Circulated ARN Certificate by AMFI to a person other than Individual
• Properly filled Empanelment form with a Photograph. In the case of a Company, the photograph is not needed.
• PAN Number
• A Self-Declaration form saying compliance of circulars circulated by AMFI
• If it is a company or firm, the supplementary document is needed which simply states- all their employees are AMFI qualified.
• A Bank Mandate

 Importance of ARN

• An ARN number is necessary as it serves as an identification for a person.
• It means that the individual is a registered mutual fund Advisor
• Appeals or assets enlisted are identifiable
• Used for the estimate of brokerage expediency

Job Description of the mutual fund advisor

•  Applicant must have knowledge and experience in MUTUAL FUND SALES, MUTUAL FUND ADVISORY.
•  The applicant must have Functioning Understanding Regarding MUTUAL FUND.
• An applicant holding a Great SALES Practice in MUTUAL FUND DISTRIBUTOR OR any AMC will be favored.
• Good communication skills and try to adapt to the client’s way of communicating.

Points to think before picking a Mutual Fund Advisor

• Eligibilities and knowledge of the Mutual fund advisor

If one by mistake invests in the wrong mutual fund for long-term returns it can result to be costly as well as waste. So, it recommended taking advice from a qualified advisor.
Before hiring the one, check the advisor’s abilities and experience. The mutual fund advisor should have good knowledge of various asset class such as equity, fixed income, and gold. Advisor and their team must be in a place to interpret and explain how these asset classes would be affected by several domestic and international issues. This requires the scope and differences of a fund as the advisor would require to advise and recognize you on products that will meet your life step demands.

• The prior performance record of Mutual fund advisor

Before hiring the advisors you should as for the past performance record made by the advisors. Asking for a reference when engaging with an advisor is good. There is no precise rating or ranking system for mutual fund advisors in India. Hence in this situation, the best way is to ask for referrals. Use websites reviews to learn the products advised by them in the past. This will tell you all about the advisors.

• Easily available

There are various investors in mutual funds and they have the same issues with advisors that they didn’t reply to calls and messages easily. Therefore, it is of most importance to entrust your money to an available person. The advisor and their team must be able to respond to your doubts in a fair period. Also, must be available by whatever mode of communication you prefer which can be telephone, email & meetings.

• Give comprehensive services

Many of the investors do not want to tell about their finances and investments with strangers. So, they want an advisor who can manage their investments with confidentiality. Choose an advisor who is honest and can give you mutual fund services from all the fund houses. This will let you know how much he is connected with different fund houses.

• The advisor payment modes

A good advisor has to be fully paid. Some may use the distribution model. Others can ask you a fee for their services on the basis of the time they have to spend with you in investing. Also, it depends on the level of advice you require or some other personalized demands.

Conclusion

The prevalence of mutual fund assets between investors is rising to fresh highs. Many Importance new investors are engaging in investments to meet their long-term goals. Since it is difficult for some investors to pursue their investment report. Many of them take the advice of a Mutual Fund Advisor. The investors see for an advisor who can help them to maintain their investment.

To earn the most reliable profits on your money investments and want to know the best mutual fund to invest in 2019 India, Get in touch with the team of specialists at Wealthbucket. Besides, feeling confused in trusting an agent, don’t worry we will solve your query by giving mutual fund agents & mutual fund advisor.

For more details about the various about mutual funds like income funds, equity mutual funds, debt mutual funds, etc. Also, visit our website Wealthbucket. To solve your query just give a ring at +91 9999379929. Also, you can mail us on our email at contact@wealthbucket.in.

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