18 responsibilities of an MFD - are you doing justice to these?Soumyajit Ghosh, Wealthapp Distributors, Kolkata

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Soumyajit takes us through 18 different responsibilities that every MFD must discharge – some one time, some ongoing – but each one important in its own way. A great beginners guide for any new MFD and a wonderful refresher for experienced MFDs too – to ensure that you are indeed paying adequate attention to all 18.

1) Deciding structure of your entity: proprietorship vs LLP vs Pvt Ltd Co

2) Ensuring registration of your entity under all regulations and laws

3) Deciding product range beyond MFs (insurance, equity, bonds, FDs) and mode of intermediation (direct/sub-broker)

4) Selection of the right Mutual Funds and schemes

5) Selecting an ideal Fund accounting and wealth management software.

6) Websites and Apps for IOS and Android

7) Designing the logo and colour schemes. Visiting cards and Visibility. Trademarks if needed

8) Creating a marketing frame work including social media

9) Client management framework including regular statements, reviews.

10 ) Brokerage negotiation and management ( mostly changes every quarter )

11) Financial Planning Process

12) Transaction Management- BSE Star/ NSE , CAMS, Fund house platforms

13) Accounts and Audit

 

14) Creating an operation process and team

15) Sales team and sales support system.

16) Office maintenance and adhere to regulatory guidelines on shop n establishment

17) Complaints and compliance Management.

18) AUM and brokerage recon.


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Comments Posted
santosh shah ARN NO :ARN 114166 PUNE , 01 Jul 2024

I have question regarding name of website or app , I have my ARN as an Individual Santosh Suresh Shah . i would like to create my web site and App from Investwell , Can i use domain like - santoshshahmfd so its relevant rather than just santoshsureshshah . so it will be like www. santoshshahmfd.com and app may be SSMFD . can you please help on this ?

Arvind Kumar ARN NO :48904 MOHALI, 03 May 2024

Being a part of the mutual fund industry, as per my understanding we are supposed to recommend mutual funds especially equity - to investors for long-term, target-based, or goal-based investing. Everybody including AMCs, financial experts, and regulators teaches us to do business in favor of investors. Churning or switching without any reason is against best practices. But surprisingly if you follow best practices, low churning, and being an MFD you will be looser. When we go thru the data, we get the least brokerage on long-term investors. In the same scheme, brokerage difference between 10-15-year-old investment and a new investor’s investment is more than three to four times. Even on running SIPs for the last 10-15 years brokerage part is very low as compared to new SIPs registered in the same scheme. While expenses charged to the scheme are the same for the particular period not different for different periods of investments. In such a scenario a MFD is bound to churn the portfolio of an investor. Moreover, AMFI brokerage data clearly show that MFDs with high churning ratios are getting higher average rates while MFDS having low churning ratios are getting lower average brokerage It is recommended that some necessary reforms should be there to make a uniform brokerage structure to avoid unnecessary churning only for the increase in brokerage. Brokerage for the particular period for the particular scheme should be the same irrespective of old or new investment, even MFDs promoting long-term investing, taking care of an investor’s behavior, and creating wealth for the last 10-15 years should be incentivized instead of penalized.

Sachin Deshpande ARN NO :Capital Up Thane, 26 Mar 2024

Very well put and appreciate the efforts to share this larger audience.

Sam Koshy ARN NO :5727 KOLLAM, 25 Mar 2024

Nicely put. Regarding Point 11, Is it under the ambit of MF Distribution?

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