The Future is Advisory and Not Commission/Brokerage!!

Latest updates by senior Officials of SEBI suggest that it is mandatory for a Financial Planner/Advisor to register as an RIA. Becoming a SEBI RIA means a change in the way an agent/distributor/broker would work and there shall be a total change in the revenue model and business practices.

It is not an easy change, because they all must be aware that commission based selling is no longer acceptable for a SEBI RIA.

Fee only advisory is not the easiest market to flourish unlike distribution business where a “sell & run” model can survive and hence would mean that all persons who act as distributors/brokers/agents must have Post Graduate Degrees in Finance and must also posses technical expertise going forward to remain in the market……else they shall perish!!

Qualification and Certification Requirement

1. Mandatory Qualification

An individual registered as an investment adviser under these regulations and partners and representatives of an investment adviser registered under these regulations offering investment advice shall have the following minimum qualifications, at all times:

  • A professional qualification or post-graduate degree or post graduate diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science from a university or an institution recognized by the central government or any state government or a recognised foreign university or institution or association; or
  • A graduate in any discipline with an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management.
  • 2. Additional Certification

    Apart from obtained mandatory qualification as mentioned above, an individual registered as an investment adviser and partners and representatives of investment advisers registered under these regulations offering investment advice shall have, at all times, a certification on financial planning or fund or asset or portfolio management or investment advisory services:

    • from NISM; or
    • from any other organization or institution or any recognized stock exchange in India provided that such certification is accredited by NISM.