From distributor to PRIM manager: how the numbers work
Trail commission versus a PRIM fee on the same book, the running costs of a licence, and the break-even point.
Last updated 5 November 2026
For a mutual fund distributor, PRIM is a change of business model: from commission paid by the fund house on regular plans, to a fee paid by the client on direct plans.
Three numbers decide it
- The book that moves. Only clients with ₹25 lakh or more can come into PRIM, and not all of them will want to.
- The fee gap. On the clients who move, you stop earning trail (they switch to direct plans) and start earning the PRIM fee, capped at 1% a year. Your extra income is the gap between the two.
- Running costs. A Principal Officer, a Compliance Officer, at least one more employee, audit, systems and SEBI fees.
A worked example
Assume ₹100 crore of client assets moves into PRIM, your average trail on it today is 0.8%, and your PRIM fee is 1%.
| Item | Per year |
|---|---|
| Trail you stop earning | ₹80 lakh |
| PRIM fee you start earning | ₹1 crore |
| Extra income from the move | ₹20 lakh |
If running a PRIM business costs ₹30 lakh a year, this book alone does not cover it. You would need either a larger book, a fee nearer the cap with performance fees, or new clients who were not paying you trail before.
That last point is often the real case for PRIM: a regulated, fee-based product to win investors who would not buy through a distributor.
What the example leaves out
- One-time costs: SEBI fees of ₹11 lakh, legal and setup
- ₹2 crore of net worth that must be maintained, partly in liquid assets
- Tax: moving a client from regular to direct plans means redeeming units, which can trigger capital gains for the client
- Clients you continue to serve through distribution, outside PRIM
Try your own numbers in the economics calculator.