Indian retail investors are considered to be risk averse due to many reasons. Mutual Funds can therefore be regarded as a boon for such investors. Mutual Fund industry is playing an active role in the capital market today and is one of the fastest growing industries.
What’s a Mutual Fund?
Wikipedia says, “a mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.”
Structural Framework of a Mutual Fund:
This article aims to highlight the various job opportunities in each of the departments in an Asset Management company of a Mutual Fund.
Asset Management Company (AMC):
1. Fund Management
In a mutual fund, the Fund Manager, who is also known as the portfolio manager, decides about the investment of the fund’s underlying securities (money received from investors for investment), realizing 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, MBA Finance, Financial Analysts, Economics Masters, Statistics Masters are in huge demand. The pay package for such professionals ranges between Rs. 3 lacs – Rs. 6 lacs p.a. approx.
Investments on the recommendation & directions of the Fund Manager are actually required to be done through series of trading transactions; for which ‘Dealers’ are required.
National Stock Exchange (NSE) has a facility for testing and certification by launching NSE’s Certification in Financial Markets (NCFM). NCFM is an online testing system, a revolutionary concept in administration of examinations and the only one of its kind today in the country. It tests 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 persons entering this field is kept high in the best interests of a mature and vibrant market.
It has been specified by SEBI that all brokers/dealers in the stock market have to mandatorily obtain the NCFM certification.
The various Certification Modules are: Derivatives Market (Dealers) Module, Capital Market (Dealers) Module, Debt Market (Basic) Module, Surveillance in Stock Exchanges Module, NSDL – Depository Operations Module, Commodities Market Module, Corporate Governance Module, Compliance Officers (Brokers) Module, Compliance Officers (Corporates) Module, Information Security Auditors Module (Part-1 & Part- 2).
The certification remains valid for 5 years from the date of the test for all modules except Derivatives Market (Dealers) Module, Commodities Market Module and Information Security Auditors Module.
Who’s required? Candidates having knowledge of Capital Markets, Derivatives, Equities, Stock Exchange functioning, etc. are required along with certifications in one or more above mentioned Modules. The pay package ranges between Rs. 90 thousand to Rs. 1.20 lacs p.a. approx.
The Registrar & Custodian is a trust company, bank or similar financial institution 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 lacs p.a. approx.
The AMC launches various schemes through which it invites investors to put their money. To reach the retail investors and provide them with the information about the schemes, extensive marketing is done through various channels of the media.
The distribution / selling of these schemes are done through Agents, Advisors, Third-party Distributors.
SEBI has made mandatory for any entity / person engaged in marketing and selling of mutual fund products to pass AMFI certification test (Advisors Module) and obtain registration number from AMFI. This certification remains valid for 5 years from the date of the test.
The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in all areas with a view to protecting and promoting the interests of mutual funds and their unit holders.
Who’s required? Here, graduates having the AMFI certification can work as Business Development 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 them ideal investment portfolio and build a customer relation. The pay package ranges from Rs. 1.5 lacs to Rs. 2 lacs approx.
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 conducted on computer. One does not need any prior knowledge of computers to be able to take the test.
Mutual Fund industry provides huge job opportunities and has tremendous scope for making a career in mutual funds. ASSOCHAM says ‘MF industry is slated to grow at 30% to Rs. 9.50 lakh crore by 2010’.