Context:
Sebi-registered investment advisers (RIAs), who provide fee-based, conflict-free financial advice, have seen their numbers shrink sharply—from 1,350 a few years ago to 962—despite growing investor demand for unbiased guidance.
SEBI-Registered Investment Advisers (RIAs)
A SEBI-registered Investment Adviser (RIA) is a professional or firm registered with the Securities and Exchange Board of India (SEBI) who provides personalised investment advice to clients on securities, financial products, and portfolio management.
Key Features
- Registration Requirement:
- Mandatory for individuals/firms giving investment advice for a fee or remuneration.
- SEBI maintains a publicly available RIA registry.
- Scope of Advice:
- Securities including stocks, bonds, mutual funds, derivatives.
- Portfolio management and financial planning.
- Personalized recommendations based on client’s risk profile, investment horizon, and financial goals.
- Fiduciary Duty:
- RIAs must act in the best interest of clients.
- Must disclose all conflicts of interest and avoid misleading advice.
- Regulatory Oversight:
- Governed by SEBI (Investment Advisers) Regulations, 2013.
- Subject to audits, compliance checks, and penalties for violations.
- Types of RIAs:
- Individual advisers – Certified professionals with relevant qualifications.
- Corporate advisers – Firms providing advisory services, may employ multiple certified professionals.
Current Challenges
| Category | Challenges | Details / Impact |
|---|---|---|
| Regulatory Complexity | Registration & Membership | RIAs must obtain SEBI registration and BASL membership (BSE subsidiary) for supervision. |
| Compliance Burden | Multiple requirements: PMLA/KYC updates, record-keeping, marketing approvals; consume significant time and resources. | |
| Application Delays | Delays in processing applications and renewals leave advisers in limbo, affecting client onboarding. | |
| Operational Burden | Resource Constraints | Individual and mid-sized RIAs often lack funds or manpower to meet compliance needs. |
| Cost & Time | Monthly compliance can cost ₹2.5–3 lakh and require 15–20 hours of work per month. | |
| Impact on Advisers | Licence Surrenders | Some advisers surrender licences due to regulatory uncertainty. |
| Partial Relief | New relaxations (removal of CIBIL reports, proof of address, net worth statements) helpful, but accountability and communication gaps persist. |
