There is a major anomaly between the examinations conducted by the Association of Mutual Funds in India (AMFI) in the metros and in smaller towns and cities. The test administered to financial advisors seeking AMFI certification by the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) is conducted in a professional manner; but in tier-2 and tier-3 towns, it is a different exam—literally.
NSE and BSE conduct the examinations online wherein each examinee gets a different question paper. This leaves no scope for cheating. However, in tier-2 and tier-3 cities, online tests are not available. So brokerage house NJ India Invest and UTI Institute of Capital Markets (UTIICM) conduct a manual written examination every two or three months in a nearby school or college.
Just like a higher secondary school exam, the AMFI question papers are sealed in a pack. Each candidate gets the same paper. Many independent financial advisors (IFAs) say this leaves scope for cheating, particularly because the questions are close-ended and the examinees just need to tick the right answers.
“There is no sanctity to AMFI exams. People in the industry say that if you want to pass the AMFI exam, become a sub-broker of NJ India. There are people who can’t speak English but have passed the AMFI examination easily,” said an IFA. An email query sent to NJ India remained unanswered. AP Kurian, chairman of AMFI, also did not revert to a query by Moneylife.
What’s more, the test syllabus is not updated with the latest developments in the mutual fund industry. “It may well happen that if you give a right answer, it would be marked incorrect because the AMFI book is not updated. AMFI expects candidates to write what is mentioned in the book, even if it is wrong,” said a mutual fund distributor.
“It (the test) needs to be improved drastically to cater to very basic knowledge of financial planning or advisory requirements. It should be made a little bit tougher to limit the number of people who can become financial advisors. But if it is made very tough, it would be difficult to get more advisors. It is conducted efficiently in the metros, but it should go online in tier-2 and tier-3 cities,” argues Rajesh Jha, CEO, Jain Investment.
There are also certain anomalies between the application forms of NSE, BSE and AMFI. While NSE and AMFI do not require candidates to attach proof of residence, the BSE form mentions that it is mandatory. The NSE and AMFI application forms require only a copy of the candidate’s PAN card as proof of identity.
“We do the certification for AMFI. They (AMFI) have never insisted that we should collect residence proof,” said an NSE official. — Ravi Samalad