1. Promotion of mutual funds is done through agents who are recognised by AMFI (Association of Mutual
Funds in India).
2. An upfront commission (called Distribution or Sales Incentive) of 1% max.(depending on fund) is paid to them, denoted by Amfi Registration Number Code (ARN Code), in the purchase month, only for Regular Option (not for Direct Option) funds, which can also be recovered as per the proportionate days if fund units get sold within a year.
3. A trail commission is paid every year on these funds till investment is withdrawn, which is 0.2-1% for equity funds, and 0.1-1% for debt funds.
4. It is not compulsory for a fund house to pay the same commission on all schemes within a category, such as the tax-saving funds have a higher commission structure.
5. Commissions are a part of the Total Expense Ratio (TER) of a mutual fund.
Funds in India).
2. An upfront commission (called Distribution or Sales Incentive) of 1% max.(depending on fund) is paid to them, denoted by Amfi Registration Number Code (ARN Code), in the purchase month, only for Regular Option (not for Direct Option) funds, which can also be recovered as per the proportionate days if fund units get sold within a year.
3. A trail commission is paid every year on these funds till investment is withdrawn, which is 0.2-1% for equity funds, and 0.1-1% for debt funds.
4. It is not compulsory for a fund house to pay the same commission on all schemes within a category, such as the tax-saving funds have a higher commission structure.
5. Commissions are a part of the Total Expense Ratio (TER) of a mutual fund.