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Friday, August 15, 2008

Career in mutual fund

INDIAN retail investors are considered to be risk averse for various reasons. Mutual funds can, therefore, be regarded as a boon for such investors. The mutual fund industry plays an active role in the capital market and is one of the fastest growing industries. 
  The term mutual fund refers to 'a professionally-managed form of collective investments that pools money from numerous investors and invests it in stocks, bonds, short-term money market instruments and/or other securities'. 
  The following are the various aspects of an Asset Management Company (AMC): 


In a mutual fund, the fund manager or portfolio manager, decides about the investment of the fund's underlying securities (money received from investors for investment), realising capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. 

WHO'S REQUIRED? Here, deep economic analysis is required for effective investment decision-making and therefore professionals from commerce, economics, finance, mathematics and management background are required. Chartered accountants, finance MBAs, financial analysts and economics and statistics postgraduates are in huge demand. The pay packages for such professionals range between Rs 3-6 lakhs per annum. 


Investments, on the recommendation and directions of the fund manager, are required to be carried out through a series of trading transactions for which 'dealers' are required. 
  The National Stock Exchange (NSE) offers the NSE Certification in Financial Markets (NCFM). NCFM is an online testing system and has been specified by the SEBI as a musthave for brokers/dealers in the stock market. The test evaluates the practical knowledge and skills required to operate in the financial markets in a secure and unbiased manner and awards certificates based on relative merits, thus ensuring that the calibre of professionals entering this field is kept high. 
WHO'S REQUIRED? Candidates with knowledge of capital markets, derivatives, equities, stock exchange functioning and so on, along with an NCFM certification are welcomed.The pay packages range between Rs 90 thousand to Rs 1.20 lakhs per annum. 


These are trust companies, banks or similar financial institutions responsible for holding and safeguarding the securities owned within a mutual fund. A mutual fund's custodian may also act as the mutual fund's transfer agent, maintaining records of unit holder's transactions and balances. 
WHO'S REQUIRED? Here, candidates from secretarial, legal background and semi-qualified professionals are required. The pay package ranges between Rs 80 thousand — Rs 1.20 lakhs per annum. 


The AMC launches various schemes through which it invites investors to invest their money. To reach the retail investors and provide them with information about the schemes, extensive marketing is done through various channels of the media. 
Agents, advisors and third-party distributors carry out the distribution/selling of these schemes. 
  SEBI has made it mandatory for any entity/person engaged in marketing and selling of mutual fund products to pass the Association of Mutual Funds in India (AMFI) certification test (advisors module) and obtain a registration number from the same. This certification remains valid for five years from the date of the test. 
WHO'S REQUIRED? Here, graduates having the AMFI certification can work as business d e ve l o p m e n t managers/relationship managers/advisors for the marketing and distribution of the mutual fund schemes. Relationship managers/advisors assist investors in their financial planning by recommending ideal investment portfolios and build customer relations. The pay packages range from Rs 1.5-2 lakhs per annum. 
  NCFM and AMFI certifications can be taken by anybody. There are no restrictions of age or qualifications for anyone to take these tests.These certification tests are automated online examinations. 


The mutual fund industry provides a plethora of job opportunities to individuals willing to make a career in mutual funds. According to ASSOCHAM, 'the MF industry is slated to grow at 30% to Rs 9,50,000 crore by 2010'. 

Sunil Sharma
Dil Se Desi Group

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