Empower

BEGINNERS

Mutual Fund Distribution

Income Potential
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Areas Covered

• Type of Brokerage Incomes

• Understanding Power of Trail
• Comparison of mutual fund business
earning with the insurance business earnings.

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Mutual Fund Future

• Mutual Fund have growth possibilities

with long-term prospects.
• Mutual Funds are good products.
• There is money in mutual funds in the
long term for distributors.

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Types of Brokerages

• UPFRONT
– A fixed (%) one time
– On investment amount.

• TRAIL
– A fixed (%) ongoing basis.
– Rates are annual
– Payable monthly
– Paid on average assets

Subject to 14% + Education Cess (Deducted by AMC)

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How the Upfront Commission

• It varies fund to fund.

• It is declared every month by prudent.
• It is available on your partner desk.

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 Trail

• It keeps paying month after month for sales done once.

• Trail commissions works24 hours a day.
• In bad days, trail comes very handy.
• Fund grows on its own and so you
get higher trail.

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What is Average Asset?

Day Units Price Mkt value

1 10000 10.000 100000
2 10000 10.010 100100
3 10000 10.020 100200
4 10000 10.040 100400
5 10000 10.050 100500
6 10000 10.045 100450
7 10000 10.055 100550
Average Asset 100314.3

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Per SIP Earning

700000
624299
600000 SIP Amt –
5000
500000
UF –
400000 0.50%
300000 278945 Trail –
0.70%
200000

100000 114064 Asset Growth

– 15%
0
15 years 20 Years 25 Years

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 Business Potential
MF Vs Other Products.

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 Commission: MF vs. FD

Investment of Rs 1 lac

AAA rated FDs MF Debt Fund

Period 3 years Period (Flexible) 3 years

Commission 1% UF 1st Year 0.70% Trail

Commission Amt 1000/ Total 1st Year Commission 700/-

Avg. Yearly Income 333 Trail for next 2 years @0.7% 1400/-
Average. Yearly %
0.33% Total Commission 2100/-
income
Average Yearly 700/-

2 Times More Income Avg. Yearly % Income 0.70%

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 Commission: MF vs. MIS

Investment of Rs 1 lac

Monthly Income Scheme (MIS) MF Debt/MIP Fund

Period 6 years Period (Flexible) 6 years

Commission 0.5% UF 1st Year 0.70%

Commission Amt 500 Total 1st Year Commission 700/-

Avg. Yearly Income 83 Trail for next 5 years @5% 3500/-

Average. Yearly % income 0.08% Total Commission 4200/-

Average Yearly 700

Avg. Yearly % Income 0.70%

7 Times more Income in MF

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Commission: MF Vs Life Insurance T-15

ASSUMPTION:
Investment growth 15%

Life Insurance Commission:

1st year – 35%
2nd Year – 7.5%
4th Year onwards – 5%

Mutual Funds
T-15 : Trail – 0.70% - T15
B-15 : 1.25 UF and 0.70% Trail

Investment Growth – 15%

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 Commission: MF Vs Life Insurance T-15
INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning
Year End Total Income Diff
Premium Rs. Income Rs. Investment AUM Trail Income
1 100000 35000 100000 107500 376 376 -34624
2 100000 7500 100000 231125 1211 1211 -6289
3 100000 7500 100000 373294 2142 2142 -2858
4 100000 5000 100000 536788 3212 3212 -1788
5 100000 5000 100000 724806 4442 4442 -558
6 100000 5000 100000 941027 5857 5857 857
7 100000 5000 100000 1189681 7484 7484 2484
8 100000 5000 100000 1475633 9355 9355 4355
9 100000 5000 100000 1804478 11507 11507 6507
10 100000 5000 100000 2182650 13981 13981 8981
11 100000 5000 100000 2617547 16827 16827 11827
12 100000 5000 100000 3117679 20100 20100 15100
13 100000 5000 100000 3692831 23863 23863 18863
14 100000 5000 100000 4354256 28191 28191 23191
15 100000 5000 100000 5114894 33168 33168 28168
16 100000 5000 100000 5989628 38892 38892 33892
17 100000 5000 100000 6995573 45474 45474 40474
18 100000 5000 100000 8152408 53044 53044 48044
19 100000 5000 100000 9482770 61749 61749 56749
20 100000 5000 100000 11012685 71760 71760 66760
21 100000 5000 100000 12772088 83273 83273 78273
22 100000 5000 100000 14795401 96512 96512 91512
23 100000 5000 100000 17122211 111738 111738 106738
24 100000 5000 100000 19798043 129247 129247 124247
25 100000 5000 100000 22875249 149383 149383 144383
TOTAL 2500000 160000 2500000 1022788 1022788
6.49 times more earning. www.prudentcorporate.com
 Commission: MF Vs Life Insurance B-15

INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning

Year End Diff
Premium Rs. Income Rs. Investment AUM Up-front Income Trail Income Total Income
1 100000 35000 100000 107500 1250 376 1626 -33374
2 100000 7500 100000 231125 1250 1211 2461 -5039
3 100000 7500 100000 373294 1250 2142 3392 -1608
4 100000 5000 100000 536788 1250 3212 4462 -538
5 100000 5000 100000 724806 1250 4442 5692 692
6 100000 5000 100000 941027 1250 5857 7107 2107
7 100000 5000 100000 1189681 1250 7484 8734 3734
8 100000 5000 100000 1475633 1250 9355 10605 5605
9 100000 5000 100000 1804478 1250 11507 12757 7757
10 100000 5000 100000 2182650 1250 13981 15231 10231
11 100000 5000 100000 2617547 1250 16827 18077 13077
12 100000 5000 100000 3117679 1250 20100 21350 16350
13 100000 5000 100000 3692831 1250 23863 25113 20113
14 100000 5000 100000 4354256 1250 28191 29441 24441
15 100000 5000 100000 5114894 1250 33168 34418 29418
16 100000 5000 100000 5989628 1250 38892 40142 35142
17 100000 5000 100000 6995573 1250 45474 46724 41724
18 100000 5000 100000 8152408 1250 53044 54294 49294
19 100000 5000 100000 9482770 1250 61749 62999 57999
20 100000 5000 100000 11012685 1250 71760 73010 68010
21 100000 5000 100000 12772088 1250 83273 84523 79523
22 100000 5000 100000 14795401 1250 96512 97762 92762
23 100000 5000 100000 17122211 1250 111738 112988 107988
24 100000 5000 100000 19798043 1250 129247 130497 125497
25 100000 5000 100000 22875249 1250 149383 150633 145633
TOTAL 2500000 160000 2500000 31250 1022788 1054038 896538

6.79 times more earning.

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 Effort Vs Effort
Insurance Vs MF

Have a
GOOD BALANCE

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 5 times – T15: MF Vs Insurance
INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning
Year End Diff
Premium Rs. Income Rs. Investment AUM Trail Income Total Income
1 100000 35000 500000 537500 1881 1881 -33119
2 100000 7500 500000 1155625 6057 6057 -1443
3 100000 7500 500000 1866469 10709 10709 5709
4 100000 5000 500000 2683939 16058 16058 11058
5 100000 5000 500000 3624030 22209 22209 17209
6 100000 5000 500000 4705134 29283 29283 24283
7 100000 5000 500000 5948405 37419 37419 32419
8 100000 5000 500000 7378165 46774 46774 41774
9 100000 5000 500000 9022390 57533 57533 52533
10 100000 5000 500000 10913249 69906 69906 64906
11 100000 5000 500000 13087736 84135 84135 79135
12 100000 5000 500000 15588396 100498 100498 95498
13 100000 5000 500000 18464156 119315 119315 114315
14 100000 5000 500000 21771279 140955 140955 135955
15 100000 5000 500000 25574471 165841 165841 160841
16 100000 5000 500000 29948141 194460 194460 189460
17 100000 5000 500000 34977863 227372 227372 222372
18 100000 5000 500000 40762042 265221 265221 260221
19 100000 5000 500000 47413848 308747 308747 303747
20 100000 5000 500000 55063426 358802 358802 353802
21 100000 5000 500000 63860440 416365 416365 411365
22 100000 5000 500000 73977005 482562 482562 477562
23 100000 5000 500000 85611056 558689 558689 553689
24 100000 5000 500000 98990215 646236 646236 641236
25 100000 5000 500000 114376247 746914 746914 741914
TOTAL 2500000 160000 12500000 5113942 5113942 4956442
32.46 times more earning. www.prudentcorporate.com
 5 times – B15: MF Vs Insurance

INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning

Year End Diff
Premium Rs. Income Rs. Investment AUM Up-front Income Trail Income Total Inco
1 100000 35000 500000 537500 6250 1881 8131 -26869
2 100000 7500 500000 1155625 6250 6057 12307 4807
3 100000 7500 500000 1866469 6250 10709 16959 11959
4 100000 5000 500000 2683939 6250 16058 22308 17308
5 100000 5000 500000 3624030 6250 22209 28459 23459
6 100000 5000 500000 4705134 6250 29283 35533 30533
7 100000 5000 500000 5948405 6250 37419 43669 38669
8 100000 5000 500000 7378165 6250 46774 53024 48024
9 100000 5000 500000 9022390 6250 57533 63783 58783
10 100000 5000 500000 10913249 6250 69906 76156 71156
11 100000 5000 500000 13087736 6250 84135 90385 85385
12 100000 5000 500000 15588396 6250 100498 106748 101748
13 100000 5000 500000 18464156 6250 119315 125565 120565
14 100000 5000 500000 21771279 6250 140955 147205 142205
15 100000 5000 500000 25574471 6250 165841 172091 167091
16 100000 5000 500000 29948141 6250 194460 200710 195710
17 100000 5000 500000 34977863 6250 227372 233622 228622
18 100000 5000 500000 40762042 6250 265221 271471 266471
19 100000 5000 500000 47413848 6250 308747 314997 309997
20 100000 5000 500000 55063426 6250 358802 365052 360052
21 100000 5000 500000 63860440 6250 416365 422615 417615
22 100000 5000 500000 73977005 6250 482562 488812 483812
23 100000 5000 500000 85611056 6250 558689 564939 559939
24 100000 5000 500000 98990215 6250 646236 652486 647486
25 100000 5000 500000 114376247 6250 746914 753164 748164
TOTAL 2500000 160000 12500000 156250 5113942 5270192 5112692
33.46 times more earning. www.prudentcorporate.com
Capital Withdrawn – T15
INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning
Year End Diff
Premium Rs. Income Rs. Investment AUM Trail Income Total Income
1 100000 35000 500000 537500 1881 1881 -33119
2 100000 7500 500000 1155625 6057 6057 -1443
3 100000 7500 500000 1866469 10709 10709 5709
4 100000 5000 2146439 14045 14045 9045
5 100000 5000 2468405 16152 16152 11152
6 100000 5000 2838666 18575 18575 13575
7 100000 5000 3264466 21361 21361 16361
8 100000 5000 3754135 24565 24565 19565
9 100000 5000 4317256 28250 28250 23250
10 100000 5000 4964844 32487 32487 27487
11 100000 5000 5709571 37360 37360 32360
12 100000 5000 -1500000 4953506 36927 36927 31927
13 100000 5000 5696532 37275 37275 32275
14 100000 5000 6551012 42866 42866 37866
15 100000 5000 7533664 49296 49296 44296
16 100000 5000 8663713 56691 56691 51691
17 100000 5000 9963270 65194 65194 60194
18 100000 5000 11457761 74974 74974 69974
19 100000 5000 13176425 86220 86220 81220
20 100000 5000 15152889 99153 99153 94153
21 100000 5000 17425822 114025 114025 109025
22 100000 5000 20039695 131129 131129 126129
23 100000 5000 23045649 150799 150799 145799
24 100000 5000 26502497 173419 173419 168419
25 100000 5000 30477871 199431 199431 194431
TOTAL 2500000 160000 0 1528842 1528842 1371342
9.70 times more earning. www.prudentcorporate.com
 Invested only once – T15
INSURANCE - 1 Sale MUTUAL FUNDS - 1 Planning
Year End Diff
Premium Rs. Income Rs. Investment AUM Trail Income Total Income
1 100000 35000 500000 537500 1881 1881 -33119
2 100000 7500 618125 4045 4045 -3455
3 100000 7500 710844 4651 4651 -349
4 100000 5000 817470 5349 5349 349
5 100000 5000 940091 6151 6151 1151
6 100000 5000 1081104 7074 7074 2074
7 100000 5000 1243270 8135 8135 3135
8 100000 5000 1429761 9356 9356 4356
9 100000 5000 1644225 10759 10759 5759
10 100000 5000 1890859 12373 12373 7373
11 100000 5000 2174487 14229 14229 9229
12 100000 5000 2500660 16363 16363 11363
13 100000 5000 2875759 18817 18817 13817
14 100000 5000 3307123 21640 21640 16640
15 100000 5000 3803192 24886 24886 19886
16 100000 5000 4373671 28619 28619 23619
17 100000 5000 5029721 32912 32912 27912
18 100000 5000 5784179 37849 37849 32849
19 100000 5000 6651806 43526 43526 38526
20 100000 5000 7649577 50055 50055 45055
21 100000 5000 8797014 57563 57563 52563
22 100000 5000 10116566 66198 66198 61198
23 100000 5000 11634051 76127 76127 71127
24 100000 5000 13379158 87546 87546 82546
25 100000 5000 15386032 100678 100678 95678
TOTAL 2500000 160000 500000 746783 746783 589283

4.75 times more earning. www.prudentcorporate.com

• Insurance Business can’t be compared to Mutual
Fund as it provides the Risk Coverage.
– Sell Insurance to all clients.
– Don’t oversell them.
– Sell & Focus on mutual fund.

Trail commission can secure your financial future.

Over a period of time you need a product that can give you the
increasing cash flow.

Your ability to run for business will diminish with the age.

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Thank You

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