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How to make your clients say yes to mutual funds? A comprehensive guide 

Most people, particularly those just starting in the investing world, have a lack of idea what a mutual fund is or how it works, even though they can be a great asset for your clients’ portfolios.

Knowing the ins and outs of mutual funds and how they might assist your clients in reaching their investing objectives is a crucial part of your job as a financial advisor.

This article solves your query on “How can I sell mutual funds online to my clients?” and offers specific factors to remember when selling mutual funds to your clients. Let’s get started!

Things to consider before selling mutual funds to your clients

  • Take a broad look at your client’s goals

You need to have a complete picture of your client’s short-term and long-term objectives before you can recommend a mutual fund to them. You can better recommend a suitable fund if you have a general idea of your client’s goals.

For example, liquid funds are great for short-term goals like building up an emergency fund or planning a vacation.

  • Understand their risk tolerance

If you want to sell an appropriate fund, understanding this aspect is crucial. How much risk your customer is willing to take is called their risk appetite. It differs from person to person. Equity funds are a good option for clients who are comfortable with volatility and have a high-risk appetite.

Debt funds, on the other hand, could be perfect for someone with a low-risk tolerance. Aggressive hybrid funds, which invest in stocks and bonds, might be a good choice for moderate risk-takers.

  • Investment duration

Here, “investment duration” means how long your customer is ready to stay committed. Another way to say this is that it’s the financial time frame. You may recommend equity funds to clients with a lengthy investment horizon (typically more than five years) since these funds only provide returns when invested for the long term.

How to sell mutual funds to your clients?

You may win over clients who are hesitant about mutual funds by providing them with the following benefits.

Investing in funds for expected earnings

Capital gains and dividends are the two primary sources of income from mutual funds. Even though the fund is required to distribute its net profit to shareholders annually, the actual frequency of payouts varies substantially across funds.

If your client values long-term wealth creation above short-term gains, then directing their investment capital towards growth stocks and a buy-and-hold strategy might be a good idea.

If making profits quickly is their primary goal, you should discuss equity funds that might offer the ideal opportunity in that case.  

Gaining access to high-value assets

When your clients invest in mutual funds, their money goes into a diversified portfolio of equities, bonds, and other securities that would be prohibitively costly for them to buy individually. 

You can help your customers reap the rewards of growing assets and dividends without requiring them to pay out a great deal of funds to own a sizable portion of the company separately.

Better diversification

It would be best for your clients to invest in a lot of diverse securities from various sectors to make the most diversified portfolios.

Mutual funds allow investors to automatically diversify their holdings across different industries or even within a specific sector. To further diversify their portfolios and offer your clients the best of both worlds, mutual funds let them choose between stable growth assets and high-risk, high-reward securities.

Diversifying investments abroad

Diversifying your holdings across a wide range of asset classes is possible with mutual funds. For example, direct investment can be challenging in many global markets, particularly emerging ones. 

It is helpful to have an experienced fund manager by your side when dealing with such situations. 

Management expertise

The previous point brings us to this one. Experienced managers supervise mutual funds and ensure that investors get a return on their investment. Even though it’s still your responsibility to advise clients on asset allocation, recommending mutual funds is like bringing on an experienced captain, a.k.a., the fund manager, to lead their investment team. 

You advise clients on which mutual funds would be most suitable for their financial situation, and the fund manager sees to it that your recommendations are carried out.


Mindful investing in mutual funds can help your client build a large corpus that can be used for different life goals while offering the necessary diversification. However, clients should also know that investing in mutual funds is not without risk.

Additionally, as an advisor, you must assist them in acquiring a fund that is consistent over the long term and compatible with their life objectives.


What is the role of a mutual fund advisor?

A mutual fund advisor is a person who provides financial advice and guidance to investors regarding their mutual fund investments. A mutual fund advisor helps you choose the right mutual fund schemes, monitor their performance, and make changes as per your changing needs. 

Do I need an advisor for a mutual fund?

Investing in mutual funds can be complex, especially for beginners. A mutual fund advisor can help you simplify the tasks and make informed decisions. Therefore, it is advisable to consult a mutual fund advisor before investing in mutual funds.

How do I convince my client to SIP? 

You can convince your client to subscribe to SIP by highlighting the following benefits:
Through SIP, you may avoid timing the market.
You may benefit from the power of compounding.
Achieve long-term financial goals with a small amount of investment.

What is the difference between a mutual fund advisor and a distributor? 

A mutual fund advisor is a person who provides financial advice and guidance to investors regarding their mutual fund investments. They charge a fee for their services. A mutual fund distributor sells mutual fund schemes to investors and earns a commission from the fund house.

Can a mutual fund distributor give advice?

A mutual fund distributor can give advice, but it may not be unbiased or personalised.They may not consider your financial goals, risk profile, or portfolio diversification. Therefore, you should be careful while taking advice from a mutual fund distributor and instead seek advice from a mutual fund advisor.

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