Suppose I am a sales guy in a Bank and much more eager to reach this month’s target, suddenly I met you and sold you mutual fund products claiming high returns than any other products of this earth. But after few years you found that I am wrong and visited to bank asking me, to your surprise I left the job. What you will do?
The above scenario may happen with anybody who visit banks, corporate distributors or some brokers. Guys sitting over their are staff in guise of sales persons who are eager to sell products and meet their target rather than giving you service for which you came in. So usually you might be target to them. It happened many times that after few years you found the invested product was actually a worst product. But what solution you get from the organization from where you purchased? Their ready made answer is “guy who sold you is already left this organization”. So you don’t have any choice but to satisfy with returns and close the product. Just to avoid such bad practice, SEBI introduced EUIN (Employee Unique Identification Number).
This is the unique number allotted to employee/relationship manager/sales person of all AMFI registered mutual fund advisers. This is the unique alpha numeric code. Below is the example of Reliance Mutual Fund’s Common Application form where you get this EUIN on top of form itself.
As per claims by regulating authorities, this EUIN will actually solve the mis-selling. Because this unique EUIN will follow wherever employee goes. So one can easily track his movements too.
This EUIN will be mandatory for the transactions like Purchases, Switches, Registration of SIP/STP/Trigger STP/Dividend Sweep Plans. But EUIN will not be applicable to the transactions like installments under SIP/STP/SWP/STP Triggers, Dividend re-investments, Bonus units, Redemption, SWP Registration, Zero Balance Folio Creation and installments under dividend sweep plans.
Usually AMFI will track the movement of employee. But each employer need to inform AMFI about exit and entry of employee movement. Now will this move actually solve all the problems relating to mutual fund mis-selling by organizations or banks?
I don’t think so, because still we may find lot of loopholes in this system.
1) Banks or organizations need one more signature of investor just below ARN number of the application form to avoid entering from EUIN. The lines written over their are as below.
“I/We hereby confirm that the EUIN box has been intentionally left blank by me/us as this is an “execution-only” transaction without any interaction or advice by the employee/relationship manager/sales person of the above distributor or notwithstanding the advice of in-appropriateness, if any, provided by the employee/relationship manager/sales person of the distributor and the distributor has not charged any advisory fees on this transaction”.
So by signing over their you investor are willfully investing but not under anyone’s advice. So anything wrong in the investment will be the onus of yours not your bank or organization. Hence while investing through organizations or banks always insist for EUIN. This seems to be the major drawback of this process. As banks may easily takes one more signature and stay away from unnecessary complication in future.
2) Complaining process seems long as you need to complain to AMFI ARN Committee. Which will carry out the investigation on the matter.
3) As of now their is no clear cut information about what if employer miss the information process of employee movement to AMFI.
4) What I found as a penalty is suspension of EUIN, it means employee no longer can sell mutual fund products. Will it be a best solution to investor loss? Who still bear the loss incurred due to wrong advice? As of now no answers.
5) What if a person who is selling mutual funds in bank moved to other departments of banks? Still he will be employee of bank, still enjoys the job, still works as usual but without EUIN doing other type of businesses. So how much risky he is to other product selling? No idea 🙂
6) What if employee changed his job profile entirely? Like instead of selling mutual funds in a bank to selling of insurance products in a same bank?
7) You will not find particular employee’s track record by EUIN. So even though you are following employee but how efficient is his advice may still hidden from you.
So many question but no clarity as of now. Let us see how it unfolds in future.
42 Responses
Hi sir. I am an individual arn holder along with euin number. I was working independently as a mf distributor
But i have joined rbl bank ltd. I want to ask you that how can i continue selling mf for rbl bank?
What happens to my previous AUM and ARN Code
Dear Karan,
Better you discuss this with your employer.
hi sir
if a person is having arn no . is it possible work in both bank employ and own mutual fund distributor
Dear Sampath,
Yes, if your employer allows you to do.
Dear Basavaraj, I started working with a MF distributor and as part of the regulatory requirement, appeared and qualified the NiSM certification. Now, instead of getting the EUIN can I opt for ARN but still work with the current employer, without any benefits of commission. The thought here is to start on my own after a year or two. Pls guide. Thank you.
Dear MF,
Whether you work on your own or under someone, your ARN will get assigned with one EUIN.
Thank you for the reply. Could there be a possibility that I can make earnings by selling MFs individually, besides working for a distributor?
Dear MF,
If your employer allows that you can sell on your own also, then you can do that.
Thank you so much.
Is there any monetary benefits like commission receiving from EUIN ?
Hitesh-No.
Are there any monetary benefit like commission for the EUIN HOLDER?
Hitesh-No.
RESPECTED SIR,
I HAVE NEW in mutual fund distribution agent ( individual) ,i have ARN number , 1)what is the working process of mutual fund of agent,means what step of working,
2)can i use online system for clients money invest in mutual fund if not where can i get invest form.
3)which document required of investor or need
4)
Bhimrao-Please contact the Mutual Fund Companies of whom you want to sell the products. They will guide you.
Please explain how can I de link my eUIn with old organisation without any expertise letter
I have full and final settlement letter but not experience or releivingletter
Old organisation is not co operating to cancel my EUIN
Please suggest
Aanya-Approach AMFI.
Hi,
I need a clarification..
Quest 1: I am a salaried person.. i want to do nism certification individually without knowing it to my company.. is it possible? will they able to identify it somehow(like using PAN details)?.
Quest 2: In order to get linked with CAMS,should i prove them that i have more customer base(no.of clients count)
Quest 3: once i register my ARN(after certification) with CAMS and KARVY, would they provide me mutual funds FORMS or APPLICATIONS
or shall i visit AMCs directly for MF applications?
Quest 4: will AMC set target for us?
Thanks in advance
Prad-1) MY company means in which sector you are working?
2) NO.
3) You can download the forms from CAMS, KARVY or from AMCs.
4) NO.
How to cancel euin from employer within validity period. If employer does not cancel euin, then how individual employee cancel euin without any tension and problems.
Sangram-Use THIS form and apply for cancellation of EUIN with AMFI.
I download this form but I have not Original EUIN Card or it’s xerox copy. The employer do not give me the original or xerox copy. Then how I cancel my EUIN.
Please give me the solution.
Sangram-Approach AMFI.
Hi Sir..!!! I have an EUIN with my previous company, but I did not receive my EUIN or ARN card at that time. Now I moved to new company, How do I change my EUIN for my new company and kindly tell me the procedure to get the duplicate EUIN also.
Shiv-Contact your new employer. I am not an expert in that.
Dear Sir,
Thanks for your valuable time and advices given above .
Sir, i m new to mutual fund and have become MF advisor with distributor as Karvy. Now i have following questions in mind . please help.
1) Currently , karvy is giving me some lesser upfront commission as i have not passed exam of AMFI.
so if i passes the Exam , does it gives me full commission?
2) Also they said that trail commission will be given to you after AUM of 15 lac. I believe that AMFI passed & registered adviser must get trail commission right from first transaction . is it true?
3) Final que, After passing AMFI exam and registration, can i deal with AMC directly? without going through distrubutor karvy? what is pros and cons.
waiting for you valuable advises.
thanks
Rohan-1) I am not sure how Karvy allowing you to sell mutual funds with ARN code. If they are doing so, then it is illegal. Also, regarding commission structure you have to discuss with Karvy. Because it is internal matter of Karvy.
2) Yes, trail commission must be from beginning. They are simply earning from your trail commission.
3) Yes, that is what you have to do to earn more commission.
sir, what is pros and cons with directly dealing with AMC?
Rohan-Higher commission. But dealing and servicing may be tough for you with all 44 mutual fund companies. Instead, I suggest initially go with big brokers like NJ India. Once you created the AUM on your own, then move to direct. I personally do my mutual fund business through NJ.
Sir,
I have given a exam of NISM series-v and get the EUIN no. for the co. holding its seperate ARN.
Now, i’m leaving the job and joining in other co. in another field.
but the co. still wants to use my EUIN for their ARN
Please suggest will there will be any problem for me in future…
Dipa-Yes, EUIN is meant for catching an employee in case of any mis-selling or wrong-doing. At the same time, to track the employee. Hence, if you are no longer into that organization then they don’t have rights to use your EUIN. Warn them not to do such practices.
Hi sir,
Is this EUIN applicable to a ulip plan also
Amar-No EUIN applies only to mutual funds but not to ULIPs.
hi
I have not advised by any employee/banker/broker i regularly read your forum and selected some Mutual funds (as suggested by you) My Self now i want to apply for Mutual Fund( Equity) Direct plan and i don’t want to pay Rs. 150 SO Should i Sign the Signature Columns Below the ARN /EUIN Boxes for saving Rs 150.
Mutual Fund House Offices are not available in My City SO I will Go to CAMS/Karvy Office in My City for Submitting the application OF Rs 1000/- Monthly SIP for 5years they will charge me Rs 150 AS i am a new investor for MF. Please suggest me Should i Sign or not i am confused.
ASHISH
Ashish-EUIN is meant for identifying and tracking the employee or concerned authority who advised you. It no longer related to what you pay Rs.150 of ONE TIME EXPENSES (You can get fair idea about expenses HERE). So if you are opting for DIRECT plans then I don’t think this EUIN and one time transaction costs will apply to you. You just need to mention DIRECT in the column provided to mention agents ARN and also while mentioning the fund name like HDFC Top 200 Fund (G)-Direct. You can directly interact with sales team of respective mutual fund company to invest instead of CAMS/Karvy. I think they will help you. Otherwise start with CAMS/KARVY and immediately you can switch to DIRECT Plans once you get online credentials from respective mutual fund company. How to switch to direct plans is mentioned HERE.
Dear Basu,
I have one more query if I buy in MF from HDFC bank is it considered as regular plan, why if we buy plan from same fund house but from bank they are considering it as regular plan.
Sunil-For your information HDFC Mutual Fund company is different entity than HDFC Bank. So when you are investing through HDFC Bank then HDFC Bank is the middlemen for you. Hence it is not treated as direct plan. It is exactly like LIC-Insurance business with LIC Mutual fund and SBI-Bank, SBI-Life and SBI-Mutual Fund.
Thanks Basu sir.
Why this EUIN is made applicable to IFAs when it is actually mean to employees? All IFAs have been allotted these number by AMFI. No one had applied. As the name only suggests it is EMPLOYEE no. This measure is not sufficient to curb mis selling.
DB Desai-As of now concentration is on banks but not individual IFAs that may be the reason. Because it is a open secret how much mis-selling happening currently and including RBI everyone knows this sad practice. Also individual IFAs can be tracked with their ARN but not employees. Hence this new initiative. Yes…to me it looks as an eyewash.
Thanks for clarifying nitty gritties of EUIN. Have been bombarded with email from Mutual Funds. Once sold a mutual fund I can still approach AMC and get work done but it’s so difficult for insurance.I wish IRDA does it for insurance agents.
bemoneyware-Please 🙂 yes like what I mentioned about tracking system of success of mutual fund staff..their must be same system to track the advisory success of agents or advisers who involves in selling financial products including insurance. Let us see how regulatory bodies think over this.