Here is everything you need to know about SEBI Registered Investment Adviser or SEBI RIA.
Who is a SEBI Registered Investment Adviser or SEBI RIA?
In this world which is continuously evolving and changing, the wants of humans also increases. This is reflected in their desires to have higher Financial Returns. An individual is said to be registered investment adviser (RIA), when he advice’s and manages the assets of wealthier sections of societies be it cash rich investors or a billionaire entrepreneur, RIA is basically a critical participant in the financial market. To become an RIA, an individual must enlist with the Securities and Exchange Board of India (SEBI) and any states in which he desires to function.
How does one become a or SEBI Registered Investment Adviser?
Not every Indian in India can legally offer investment advice as per SEBI. One has to first become registered as an investment adviser (RIA) with SEBI. Post getting themselves registered they have to act as a fiduciary. The SEBI RIA has to have multiple education and experience qualifications related to financial markets. Also the high fiduciary standard means they have to put client interest before anything else. This is unlike product salesmen, broker-dealers etc. who get paid on a commission basis and hence focus on the products which earn them the highest commission. In contrast, SEBI RIA’s or SEBI Registered Investment Advisers are expected to suggest commission free products.
How is an SEBI RIA different from other financial advisers?
A SEBI RIA or Registered Investment Adviser is a person who is legally registered through the proper channels and has been approved by the regulatory body that will oversee it. In our country, it is usually the Securities and Exchange Board of India (SEBI) under which the RIA operates.
What are the advantages and disadvantages of consulting an RIA?
Transparency exists and a customer is well aware of how much he is being charged for and how much he is getting in return. Many SEBI registered investment advisers (RIAs) try to maintain a pattern of their fees as a percentage of assets under management (AUM), which synchronises with their financial interests with the client, as a proportion that will increase as their clients’ funds grow over time. A fixed charge based structure can likewise frequently assist customers with an extra tax advantage, as anything that they pay out of pocket can be recorded as a miscellaneous cost on the income tax returns.
What are the average fees they charge?
A fee-only Adviser is someone who charges a monetary charge for assisting in creating financial plan and advisory and is not entitled to any kind of additional incentive from mutual fund houses, insurers or other financial product sellers. Typically they charge a combination of fixed fees and performance fees, averaging about 0.5% to 2% of the assets under management or assets under advisory.
Is the RIA concept unique to India?
No, the RIA concept was originally introduced in US financial markets. Few other developed financial markets also have the role of RIA or Registered Investment Adviser, who is regulated by the financial markets regulator specific to the country.
How does an Indian RIA differ from USA based RIA?
Regulations on RIAs are very strict in India as compared to USA because of the following factors:
a) to bring in accountability in the advisory they provide to their customers;
b) Trying to ensure that no other financial selling takes place in the name of Financial advisory.
c) They are expected to adhere to the highest fiduciary standards.
So where can I find a SEBI RIA for consultation?
FinVizer.com is a leading resource for SEBI RIA’s in India. You can find some of the leading SEBI RIA’s on our website. You can get all the details like their experience, education qualifications, assets under management and other relevant KPI’s. You can also schedule a FREE trial video consultation, to see if the adviser is able to match your needs and expectations.