Why You Should Hire a SEBI-Registered Investment Advisor in India

For many years, investors couldn’t access reliable and honest investment advisors in India. Many advisors were salespeople working for commissions. These salespeople were often linked to insurance companies, mutual fund companies, or other financial institutions. Their main job wasn’t to help investors with smart advice, but to sell products that made them the most money.

Because of this, investors often bought expensive and unsuitable products that helped the agents more than the investors themselves. This situation caused a big problem because advisors weren’t truly looking out for their clients’ best interests. One important change was the introduction of direct mutual fund plans.

These plans allowed investors to invest in mutual funds without paying any commissions, which lowered overall costs. But this idea assumed that people already knew enough about finance to make smart decisions by themselves. In 2013, SEBI, or the Securities and Exchange Board of India, realised the need for improvement and introduced new rules known as the Investment Advisor (IA) Regulations.

These rules were crucial for cleaning up the financial advice system in India. The regulations called for clear rules, higher standards, and more accountability in financial advising. Now, investment advisors in India must register with SEBI as Registered Investment Advisors (RIAS) and follow strict guidelines. This includes having specific qualifications, certifications, ongoing education, maintaining proper records, assessing risk levels, and complying with audit processes. A key aspect of the SEBI regulations is their requirement that investment advisors in India follow a fiduciary standard.

This means that SEBI-registered Investment Advisors must, by law, always act in their clients’ best interests. This is very different from the old way, where advisors only needed to offer “suitable” products, which allowed for biased advice. The fiduciary responsibility ensures that advisors put the clients’ needs above their financial gain. Additionally, SEBI RIAS work on a fee-only basis.

They don’t earn commissions from product manufacturers, removing the incentive to push certain products. Instead, they charge a clear, upfront fee to their clients for their advice. This approach fosters a more trustworthy relationship that focuses on the client’s best interest. The advisor is paid by the client and only for the quality and service they provide. This gives clients more power to hold advisors accountable and decide whether to continue the service based on the value received.

Another major difference between SEBI-registered investment advisors in India and traditional agents is the depth of their work with clients. An RIA will deeply analyse a client’s financial situation, future goals, risk tolerance, and investment timeline. They use all this information to create a personalised strategy aligned with the client’s goals. In contrast, traditional agents often just have surface-level interactions focused mainly on selling products.

About the Company

Hubridge is a SEBI-registered financial advisory firm offering comprehensive services in wealth management, investment banking for SMES, and CFO partnerships. Hubridge serves clients across India, the UAE, Europe, the UK, and Australia. Their expertise spans financial planning, equity markets, private equity, and business transformation, providing tailored solutions to individuals and businesses aiming for sustainable growth and value creation.