InvestorQ : What is the difference between the sub-brokership and Mutual fund distributor?
Archita Jajjoo made post

What is the difference between the sub-brokership and Mutual fund distributor?

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5 months ago
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Mutual fund distributor is an individual or an entity that facilitates the buying and selling of units of mutual funds by investors. A mutual fund distributor earns upfront/trail commission for fetching investors for the mutual fund houses. A mutual fund distributor helps the investors to be aware of various schemes of Mutual fund houses. He also guides the investors to carry out their investment transactions relating to switching, redemption, etc. and to guide them periodically on the basis of the performance of their investments.

Mutual fund distributors are also called brokers in certain cases as they as an intermediary between the investors and the mutual fund companies and charge brokerage for providing their services.

Sub- Broker, on the other hand, is an agent that acts between a large broking service company and the investors or traders. They are generally, the business associates of brokers who are registered with stock exchanges such as NSE or BSE. While brokers receive brokerage from the broking service companies, sub-brokers receive a part of it in the form of commission for the services provided. A sub-broker trades only through brokers and passes on the investor’s order of buying or selling to the broker, who in turn conducts the execution. So, technically, a sub-broker is a link between the investors and large broking firms.
While sub-broker is used in entirety for an agent working specially for persons dealing with investors looking to invest in the stock markets, mutual fund distributor is used for an agent who directs the investors looking for portfolio investing and not trading in stocks.

So, we cannot establish any relationship between the two, except the fact that the primary nature of services provided by both the service providers is the same.
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