Mutual fund distributor software is the software an Indian mutual fund distributor uses to sell funds, track each client's holdings and check the commission it earns from the fund companies. A mutual fund distributor is a person or firm that sells mutual funds to investors. It is registered with AMFI, the association of India's mutual fund companies, and earns a commission from the fund company, not a fee from the client.
There are lakhs of such distributors in India, from single agents in small towns to large firms. Most of their clients invest through a SIP, a systematic investment plan, which invests a fixed amount every month.
Consider a distributor in Indore with 800 clients and ₹60 crore invested. The clients hold funds from fifteen different fund companies. Every night, the software imports the day's transactions and fund prices from the registrars, the firms that keep each fund's investor records for the fund company. It then updates every client's holdings. Each morning, the distributor sees whose SIP failed because of low bank balance, whose fixed deposit is maturing and who has not invested for a year.
The software also does three other jobs. It lets clients start a SIP or buy a fund online, through the exchanges' mutual fund platforms. It produces a capital gains report for each client's tax return. And it checks the commission statements from each fund company against the clients' holdings, so that the distributor is paid correctly.
In India, a distributor sells the "regular plan" of a fund, which includes the commission. An investor who buys the "direct plan" pays no commission but gets no distributor's help. A distributor may explain products, but under SEBI rules it may not charge a fee for advice. The page on investment advice regulation explains the difference.
The funds themselves are run on each fund company's investment management system. Some funds are index funds and ETFs, which simply follow a market index. Larger firms may send the same client data to a wealth management platform for their senior advisers. All of these are part of wealth management.