Financial sector has seen tremendous growth and opening of huge opportunities ever since the liberalization of the economy since the nineties. The financial sectors of banks, insurance, mutual funds, company deposits etc. offer great self-employment opportunities for those who are self-driven and other youth having a preference for independent working with the flexibility of timings and initiative-based reward environment. Two of the major financial services viz. insurance and mutual funds are having the great potential in today’s market economy. Here we will discuss briefly of these services, particularly for those who don’t like to be stuck in a 10 to 5 job with a fixed salary, small incentives and minimum career advancement. Some of the pre-requisites of making a success in insurance and mutual fund sector are as under.
- Flair for social networking and people skills.
- Perseverance and persuasive skills.
- Positive outlook and never to be discouraged.
- Love for simple calculations and financial data.
- Readiness to keep pace with latest developments.
- Commitment to clients’ interest.
- Honesty and consistency.
So you don’t require any deep knowledge and expertise of subjects like physics, mathematics, history, economics or even commerce. If someone has passed12th, is 18 years of age and clears simple professional test requiring only about a 10-15 days’ preparation in respective fields can work in thus field. Additionally, basic investment like a laptop, visiting cards and mobile phone, is sufficient to make an entry in either of these lucrative areas. Once you do all this, you are already an entrepreneur on the way to financial security and growth.
Let us now have a look at how to enter the insurance sector or the mutual funds sector as an agent or advisor.
There are two broad types of insurance viz. general insurance and life insurance. General insurance refers to insurance of vehicles, house or building, household goods, health insurances, insurence against loss by fire, theft, accident, earthquake, hospitalization etc. These insurances are annual contracts that have to be renewed every year, and if there was no claim in the past year, there might be some discount in premium on renewal of insurance which is called No Claim Bonus. There are four general insurance companies viz. New India Assurance Company Limited (NIA), United India Insurance Company Limited (UIL), Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL) in the public sector and a number of insurance companies in the private sector.
Life insurance financially protects the family or the nominee of the insured against loss of life of the insured. Unlike the general insurance, in case of life insurance, there is a long term contract between an insurer and the insured and premium has to be paid every year with the option to pay half-yearly, quarterly and even on a monthly basis. There are various types of policies depending upon client’s preference; some of which provide life cover with premium norms depending amount of cover and the option of no refund at the end of term. Some payment is made on policy maturity, a part of premium going into investment and remaining going for life cover or money back scheme in which a fixed sum is paid after intervals of a few years. Life Insurance Corporation is the major company in the public sector, besides which there are a number of private companies providing life insurance services.
Insurance today is safe and secure as the sector is regulated by IRDA (Insurance Regulatory Development Authority of India) by taking care of clients’ interests by prescribing regulatory norms and revising them from time to time.
Income to the agents or advisors is by way of commissions, the company pays you for the policies sold, returns are very good, and there is no ceiling. If you take care of the client by advising properly and servicing the policy, the customer will not only remain loyal to you for his insurance needs; he will also bring others to you.
If this interests you, the first step is the choice of company you want to work with. Once you have decided, you can contact its local office, which may interview you and provide the necessary training. Then you have to appear and pass an online test for RDAI IC 38 certification, conducted by agencies authorized by IRDA. There are separate tests for Life, General and Health Insurance. Remember that you can do insurance business as an agent or advisor only for the company you chose, has trained you and sponsored to appear in the test.
4. Mutual Fund Sector
Mutual Fund distributor or dealer works is another sunshine area in the financial services sector today. It is well regulated by the Securities and Exchange Board of India (SEBI), and there is a hundred percent transparency in the functioning of Mutual Funds. Investors put money in Mutual Fund Scheme of their choice, and the financial experts manage the total money, i.e. assets under management (AUM) by investing in equities, fixed return avenues or partly in equities and partly in fixed return avenues in prescribed range of proportions depending on the mandated characteristics of the scheme. There can be an equity fund or hybrid fund or a debt fund or many other types to suit individual needs, preferences, risk appetite, investment horizon or goals.
If you are interested in Mutual Funds distribution as an advisor, you can directly contact AMFI (Association of Mutual Funds in India) and fill-up the form and deposit the prescribed fee. You will receive reading material on mutual funds to prepare for the test. It is an online examination with on the spot result. Once you pass the examination, next step is to approach CAMS (Computer Age Management Services), a SEBI registered agency and apply for ARN Code (AMFI Registration Number), which will be supplied by AMFI. Your ARN Code is your identity as Mutual Fund distributor.
In case of Mutual Funds, once you have ARN Code, you can register yourself with as many Mutual Fund companies as you like as the distributor of their schemes. Have a laptop, phone with internet, Application Forms for Mutual Funds (which you can freely collect), visiting cards and a small office or a desk and you are all set for the launch as a Mutual Fund distributor. Next all depends on your knowledge of schemes, people contacts and ability to provide prompt and efficient services. And income comes to you by way of commission paid to you by the Mutual Fund company.
In case of Mutual Funds, one requires to remain regularly updated in respect of the money market and economy to be able to advise the clients in a better way.
So decide as per your natural preference, skill level and take first steps towards making a great career for yourself.