How To Become Registered Investment Advisor?

In India, you have to be registered with SEBI if you want to be an investment advisor. Any person except the investor who is advised is not entitled to accept any fee or remuneration from a registered investment advisor. This means that only a fee recommended for consultation can be paid to an investment advisor in India.

The SEBI Investment Advisers Law, 2013 isolates selling commissions from investment advice. This regulation was initially strongly criticized by the consultancy community in India. Later, however, investors started to seek advice from fee-only advisors. According to the rules, therefore nobody can become an investment advisor without seeking SEBI’s approval.

What Is Meant By a Registered Investment Advisor?

Investment advisors are specialists who provide clients with advice and assistance in areas related to financial matters. Investment advisors provide advice on all monetary topics, such as insurance plans for financial planning or investment strategies. One has to obtain a certificate of registration from SEBI to pursue a career as an investment advisor in India.

The following is a list of the documents that must be submitted along with the request:

  • Address proof

  • Evidence of Identification

  • Qualification proof, including degrees.

  • Certificate provided by CA that declares net assets

  • Income Tax Return for the previous three years

Also read What is a Sub-broker?

How To Become An Investment Advisor?

The step-by-step process for the online registration of investment advisors on the SEBI website is as follows:

  • Visit the SEBI Intermediary Portal – Go to the website online & click on the Self-Registration option.

  • Furnish The Info – Fill in the application’s complete details & click on proceed, which will take you to another payment tab. On SEBI’s portal, login credentials will be created online.

  • Make The Payment – Making the payment is the next move. A choice of internet banking or debit card may be used to make payments. Click on the ‘Online’ payment mode, and then click on the ‘Proceed to pay’ button, which will lead you to the payment gateway.

  • Receipt Of a Confirmation Email From Sebi – Next within 7-10 working days, the applicant will receive a confirmation email from SEBI for the payment of fees along with receipt of login credentials.

  • Login And Fill In The Application – Use the credentials to login to the account & complete the details of the application. It is necessary to connect all the documentation & declarations to an application. In addition, ensure that the application is submitted within 14 days after the login credentials have been issued.

  • Fill Out Form A – Next, you need to log in with credentials to the SEBI portal & click on the Investment Advisor option. In the drop-down menu, select the Navigate to registration option. This opens the registration Form-A, which has different parts that an applicant must file and complete.

  • Sebi Responds – Contact is obtained within one month of the application being filed. In the case of any SEBI question, the answer must be made within the allotted time.

  • Grant Of a Registration Certificate – The receipt of an email from SEBI for the grant of a registration number by post and a registration certificate is received by post at the registered address specified in the application.

You might also like How to become a Financial Advisor?

Conclusion

After receiving a registration certificate from SEBI, applicants will work as investment advisors. The advisor needs to keep updated on the new legislation to continue their career without hurdles. It is advisable to visit the official SEBI website for this reason and to find the latest news about the circulars and updated guidelines. They must also comply with SEBI’s reporting requirements from time to time. The investment advisor shall not deny the terms and conditions, the rules of renewal and the numerous other matters which may preclude the investment advisor from becoming a major potential investment advisor. Always note, those who have your best interests at heart are the best investment advisors. For the same thing, you should reach out to reputable franchises like IIFL in order to stay bullish on your future by becoming a financial advisor.

FAQ

In order to become a certified investment advisor, you need to pass the Investment Advisor Certification Exam of National Institute of Securities Market (NISM). Besides this, you need to have a postgraduate degree or diploma in a field related to finance, commerce, accounts, business, management etc. If you do not have a post-graduate degree or diploma, then you need to be a graduate in any subject or discipline, with 5 years of experience of working in an area related to financial products or services. You can register for the exam at NISM. Once you pass this exam, and have the required degree/ diploma qualification, you can become a certified investment advisor by getting yourself registered with SEBI. You can see the process of getting yourself registered with SEBI as an investment advisor at https://www.sebi.gov.in/sebi_data/attachdocs/1369826090264.pdf

Once you pass the NISM Investment Advisor exam, you can register with SEBI as an investment advisor. You will have to fill Form A. Along with Form A you will have to submit application fee of Rs 5000 through a bank draft. This bank draft should be in favor of The Securities and Exchange Board of India, payable at Mumbai. You can send the application form along with the demand draft at one of the regional or local offices of SEBI. You can get the address of these offices at www.sebi.gov.in. If SEBI approves your application, then you will have to pay a registration fee of Rs 10,000 if you are registering as an individual. If you are registering as a corporation, then you will have to pay registration fee of Rs 100,000. This fee should also be paid through a bank draft drawn in favor of The Securities and Exchange Board of India, payable at Mumbai. Once SEBI receives this registration fee, it will grant you registration as an investment advisor.

The eligibility requirements for becoming an RIA are:

  • A post-graduate degree or diploma in finance or accounts or business management or capital markets or economics etc. OR A graduate in any discipline with 5 years of working experience in any area relating to financial advisory, financial products or services.

  • A pass certificate in NISM Investment Advisors’ certification exam. A pass certificate in NISM’s Portfolio Management exam will also be adequate.

An RIA is authorized to give advice on investments that its clients can make. RIA is a type of financial advisor. A financial advisor advises on other aspects of financial planning such as the amount of savings that a client may need during her retirement years. A financial advisor can also advise the clients on type of risk management products, such as insurance, that are suitable for them. A financial advisor can also give advice on financial products such as mortgage loans etc. As per SEBI Investment Advisors Regulation, 2013 only RIAs can give advice on investments that a client can make.

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