How to become SEBI registered investment advisor?

Are you passionate about investment? If yes, you can pursue your dream by becoming a SEBI registered investment advisor. There was a time when becoming an investment advisor was much easier due to the lack of proper guidelines by the statutory body. But, things changed considerably when SEBI (Securities & Exchange Board of India) launched RIA guidelines for people vying to become an advisor. The primary motive behind the release of these guidelines is to safeguard the interests of investors and enable an organized platform for people to take investment advisory as a full-fledged career field.

According to the latest Investment Advisers Regulations, 2013, one must need to register himself or herself with SEBI. This registration would help him get compensation from the people who avail his services. This way, there is a clear guideline on who is liable to pay a SEBI registered investment advisor against the services offered.

If you are looking to become a registered investment advisor with SEBI, you must need to possess complete knowledge about the new RIA (Registered Investment Advisor) guidelines, eligibility, qualification etc. You will get to know everything about the same in this post.

What does an Investment Advisor mean?

In simple words, an investment advisor refers to a person actively engaged in providing investment-related advice to a person, a group of people, or companies. This investment advice is usually chargeable and one is liable to pay the prescribed amount to the investment adviser he chooses to work with.

What is Investment Advice?

Investment advice refers to any kind of advice in the form of a tip or suggestion related to the investment you are planning to do. This could be related to the buying or selling of securities and other investment offerings, portfolio management, and other concerned products. This advice can be delivered online or offline or both. In today’s digital age, the online mode of investment advice has become extremely popular among stock investors.

So, now look at the eligibility criteria for investment advisors.

1. Qualification

First and foremost, you must check the eligibility criteria before proceeding with your application for SEBI registered investment advisor. Doing this would save from a lot of hassles further.

A Personal Investment Advisor or Chief Officer of a non-individual advisor or any individual linked with investment advice must have the following minimum qualification, at any point in time:

1. A specialized qualification or post-graduate degree or post-graduate diploma (or at least two years) in finance, accountancy, business management, economics, commerce, stock market, insurance, banking, or actuarial science from a recognized university or an institution acknowledged by the Central Government or any State Government or a well-acknowledged foreign university or institution or group; or
2. A professional qualification by pursuing a Post Graduate Program in the Securities Market (Investment Advisory) from NISM of a duration not less than one year; or
3. A professional qualification by obtaining a CFA Charter from the CFA Institute.
   

2. Experience

A personal investment advisor or a Chief Officer of a non-individual IA should be backed by an experience of minimum five years in chores related to guidance in financial products or securities or fund or asset or portfolio management. However, an individual linked with Investment guidance must have an experience of minimum of two years in things relating to guidance of financial offerings or securities or fund or portfolio handling.

3. Certification

A personal investment advice or a Chief Officer of a non-individual IA should carry a certificate in financial planning or asset or fund or portfolio management or investment advisory from:

1. NISM or, 
2. Other institutes including the Financial Planning Standards Board of India or any recognized stock exchange in India offered such certification is recognized by NISM.

Please note that a new NISM certification is needed to be secured before the expiry of the certification validity to guarantee consistency in compliance with certificate guidelines. This certification is not supposed to be obtained through a CPE program.

4. Net Worth

The net worth-related specifications are as below:

• If there is a non-individual investment adviser – The net worth should not exceed the amount of INR 50 lacs
• In the case of an individual investment adviser – The net worth should be a minimum of INR 5 lacs and that too in the form of tangible assets

Net worth typically refers to the collective worth of paid-up share capital along with free reserves (apart from reserves made out of revaluation) minus the combined value of accrued losses, delayed expenditure not written off, inclusive of the miscellaneous expenses not written off.

The net worth certificate can be obtained through a registered Chartered Accountant and must be affixed to the application form with SEBI.

5. Necessary Infrastructure

Apart from the aforementioned elements, the applicant must ensure that he has an adequate infrastructure in the form of required office space, furniture, equipment, communication gadgets, research ability, and market research software system to ensure the delivery of hassle-free and robust investment advisory services. 

SEBI-registered Investment Advisor – Application and Charges

After you check and ensure the given eligibility criteria for an investment advisor, you can submit your application to SEBI for an investment advisor. Make sure you take the necessary approval from BASL before proceeding with your application. 

Once you get the approval from BASL through email you can proceed with your application with SEBI.

You can log in to the website - https://siportal.sebi.gov.in/intermediary/index.html and finish the primary application process as only then you can move to the next level of your application.

All the information highlighted in Form A is needed to be provided along with all the necessary documents in the form of attachments.

The Conclusion

Once SEBI becomes completely satisfied with your application, the institution will ask you to make the payment for BASL membership in a few days. SEBI once gets internal consent from BASL on receiving fees, is supposed to issue you the SEBI Registered Investment Advisor License. On the other hand, BASL would issue you a certificate of membership.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.