How to become an investment advisor in India?

Anybody could be an Investment Advisor before SEBI introduced the Registered Investment Advisor (RIA) Regulations in 2013. It was solely done to protect the interests of the investors. As per the Regulations, any person who wants to provide advice on financial products like stocks, mutual funds, etc. for a fee will need to register with SEBI under the SEBI (Investment Advisers) Regulations, 2013. Once you become an RIA, you can only receive a fee for your services from the person whom you’ve given advice and not from anyone else.

RIA is the future of investment advisory. If you want to become an Investment Advisor in India, it is best to understand the regulations and eligibility criteria before applying for the same.

Who can apply for registration as an RIA?

An individual or a corporate body or any partnership can apply for registration as an RIA in India. There are some categories of people who are exempt from registration. This includes those who make general comments on financial products in good faith, pension advisers advising on pension products, mutual fund distributors, Chartered Accountants and stock brokers.

What qualifications and certifications are needed?

In terms of qualification requirements, you need to be a post graduate in finance, business management etc., or you should have a professional degree in the related fields from a recognised institution or university or,

a graduate in any discipline with at least five years of experience in activities related to advising about financial products or securities or asset or fund or portfolio management.

There are some certification requirements wherein you need to complete NISM exam for Investment Advisers. The examination has 2 levels – “NISM Series X-A and X-B: Investment Adviser”. Alternatively, there are other certifications also which are accredited by NISM for Investment Advisers.Click hereto know more on that.

What are the capital adequacy requirements?

An individual or partnership firm will need to have a net tangible assets with a value of at least Rs. 1 lakh. A corporate body will need to have a net worth of at least Rs. 25 lakhs.

What is the fee to apply and register?

 

Application Fee (in Rs.)

Registration Fee (in Rs.)

Individual / Partnership

5,000

10,000

Company

25,000

5,00,000

 

Documents needed while registering:

  • Address Proof & Identity Proof
  • Qualification proof including degrees and NISM certifications
  • Experience Certificate, if you are a graduate with relevant experience
  • Certificate of Net Worth issued by a CA
  • CIBIL Score
  • Necessary declarations
  • Income Tax Returns of last three years

Steps involved in the Registration Process:

Step 1: Go to the SEBI Intermediary Portal and click on Self Registration. Complete the application form and proceed.

Step 2: You can make the application payment via internet banking or debit card. Choose the online payment mode and then proceed to pay.

Step 3: SEBI will send an acknowledgement mail after the application fee has been paid. They will inform about the login credentials from SEBI within 7-10 working day.

Step 4: Login into your account and fill in the application details with the list of documents and declarations and submit the form.

Step 5: Please make sure that you fulfil all criteria to get registered with SEBI as an IA. Fill in all the details required in the application otherwise, the application might be put on hold.

Step 6: Receipt of communication from SEBI after 30 days of submission of the application.

Step 7: Receipt of approval by SEBI and payment of registration fees.

Step 8: Receipt of email from SEBI mentioning the registration number followed by certificate of registration via post.

Once you receive the registration certificate, you can officially start practicing as an RIA.

                                                                                                                                                                                                                                   
               - By Saloni Parakh


Posted On: 19 Jul 2019 Home / Investing / How to become an investment advisor in India?