Who is a SEBI Registered Financial Advisor? Everything You Should Know 

Money decisions can shape your future. Just like choosing the right teacher shapes your education or the right doctor protects your health, picking the right financial advisor can put you on the path to your goals faster.  

But with a deluge of advice online and elsewhere, how do you discern who to trust? Here comes the role of a SEBI-registered financial advisor. 

Understanding who they are, how they operate, and why their role is important can help you make better financial decisions.

Who are SEBI-Registered Financial Advisors?  

A SEBI-registered financial advisor (SEBI RIA) is an individual or firm registered with SEBI to offer personalised investment advice on securities for a fee, acting as a fiduciary (client interests first).

1. What They Do

The primary role of a SEBI financial advisor is to provide investment advice to clients for a fee. The advice should be given in the client’s best interest and after understanding his/her risk profile and financial goals. 

A SEBI-certified financial advisor’s primary responsibility is to offer fiduciary and unbiased investment advice to its clients. They cannot sell financial products or earn commissions; their compensation comes solely from you, the client.

The registered financial advisor must also disclose all fees and potential conflicts to the client upfront.

A SEBI RIA is different from a mutual fund distributor. A mutual fund distributor can only sell mutual funds and provide product-specific guidance. They cannot provide broad investment advice. They earn commissions from mutual fund houses. 

2. Qualifications and Licenses Required 

Earlier, to become a SEBI RIA, a postgraduate degree in finance, minimum experience, and a certain net worth were mandatory.  

But since 2024, the eligibility has been relaxed.  

Now, to become an RIA, 

• A graduate degree is required 
• Must clear NISM-Series-X-A (Level 1) and NISM-Series-X-B (Level 2)
• Alternatively, professionals like CA/CFA/CFP can also register

Note: Anyone offering investment advice on securities must register with SEBI. Unregistered individuals cannot legally give such advice.

3. Regulatory Framework 

RIAs must:

• Register with SEBI 
• Act in the client’s best interest 
• Follow a fee-only model (no commission from product sales) 
• Disclose conflicts of interest
• Follow strict compliance and reporting standards

They must also sign a written agreement with each client that outlines the scope of services, fees, responsibilities, confidentiality clauses, and grievance redressal mechanisms. This adds a layer of legal protection and clarity for the investor.

Also note that the RIA must clearly tell you what types of investments they will give advice on. Before taking any action related to your investments, the advisor must get your clear permission first. Importantly, they cannot ask for power of attorney or any legal right to act on your behalf, you stay in full control of your money and investment decisions.

4. Fee Structure  

SEBI has specifically defined how much fee RIAs can collect. SEBI RIAs can collect fees either in one of the two modes – as per client’s total AUA (assets under advice) or a fixed fee.

In the first mode, they can charge as a percentage of a client’s AUA, up to 2.5% per annum per client. In the second mode, they can charge a fixed fee, and it should not be more than ₹1.25 lakh per annum per client.

Benefits of SEBI RIA

1. A SEBI RIA will offer professional and unbiased advice. This is because they are compensated through fees, not commissions, and so they have no incentive to push specific financial products.
2. They are regulated by SEBI, offering more transparency and credibility. 
3. With the rise of usage of social media, many fin-influencers promote get-rich-quick schemes and questionable money tips online. Many lack the proper qualifications or oversight to provide sound financial guidance. Mindlessly following their advice can lead to risky investments. So, it is vital to seek advice only from authorised professionals like SEBI RIAs, who have a legal fiduciary duty to act in your best financial interest.

Do’s and Don’ts While Dealing with Investment Advisors 

Do’s 

• Always deal with SEBI-registered investment advisors. 
• Check whether your advisor is registered with SEBI. You can verify the SEBI-registered advisor list by checking the SEBI website. 
• Know how the financial advisor is compensated. SEBI-registered financial advisors will charge a fee only for advice. 
• Before engaging with any financial advisor, insist on a client agreement. This document outlines the scope of services, fees, responsibilities, and grievance redressal mechanisms.
• Choose a financial advisor with a strong track record in investment planning. Look at client reviews, years of experience, and areas of specialisation. 

Don’ts 

• Do not deal with unregistered financial advisors. 
• Never make financial decisions based only on oral commitments.
• Be wary of financial advisors promising guaranteed or unusually high returns. Investing always carries risk, as no one can consistently predict the market.

Conclusion 

Let’s face it—money decisions aren’t easy. There’s a lot of noise out there, and it’s hard to know who to listen to. That’s where a SEBI RIA makes all the difference.

These SEBI-registered financial advisors don’t just give advice. They’re legally bound to put you first. They’re regulated and transparent about how they work and what they charge. 

Don’t settle for random tips or flashy promises. Take the time to verify credentials, understand how your financial advisor is compensated, and ask the right questions.

The right financial advisor won’t just help you invest better—they’ll help you think better about money.

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