I want to know what are the responsibilities of a Mutual Fund Distributor? 1. Can we advise the scheme name to our investors? 2. Is it mandatory to risk profile my investors? 3. Can we suggest Financial Planning for our investors? 4. Can we charge a fee? 5. Can a Distributor sell life insurance, general insurance, deposits etc. What are his duties/responsibilities and liabilities in relation to the points mentioned above.
1. Kindly refer to point no. 3
2. Risks and returns are generally interrelated; higher the risk, higher the returns. A Distributor should run the exercise of risk profiling for his investors to suggest the best possible and most appropriate schemes. Funds with a relatively better risk-revert ratio should be considered. For better return-risk profiling, the Distributor should ideally suggest diversified investment schemes to his clients. This will enable a balance in profile of his/her investors. You may review our website for similar tools that we offer. Leverage on our Asset Allocator to assess the risk profile of your clients by clicking on: https://www.quantumamc.com/asset-allocator/
3. When a Distributor represents to offer advice while distributing a product, it will be subject to the principle of ‘appropriateness’ of products to that customer category. Appropriateness is defined by SEBI as selling only that product categorization that is identified as best suited for investors within a defined upper ceiling of risk appetite. Request you to refer the Point B (iii) of SEBI Circular Cir/ IMD/ DF/13/ 2011 dated August 22, 2011 attached for your reference.
4. Distributors holding ARNs cannot charge fees from their clients as AMCs pay the commission as per the investments of their client’s on basis of the brokerage rates of the respective schemes. In case of SEBI investment advisors (RIA), the fees are charged from their clients; the AMC does not pay any commission to the RIA.
5. If the Distributor has fulfilled the respective regulatory requirements, then he/she can sell life insurance, general insurance, deposits etc. apart from his distribution business.
Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Please visit - www.QuantumMF.com to read Scheme Specific Risk Factors.
Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the scheme's objective will be
achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves
investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual
Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act,
1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager:
Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.