From 268 as on June 2015, the number of Investment Adviser (IA) registered with SEBI has gone up to 447 as on July 2016, shows SEBI data.
The rise in the number of RIA registrations can be attributed to SEBI’s vigilance and crackdown on erring entities offering investment advice without registering with the regulator.
Industry experts say the number of RIAs is increasing due to a number of reasons. Apart from preferring to be on the right side of the law, some are self-motivated to register as RIA as they believe it gives them an edge over others.
While the RIA registrations is on the rise, the growth is still minuscule, say advisers. “Former SEBI chief M. Damodaran had said that India needs 1 lakh MF advisers. So there is a long way to go. While the RIA numbers are going up it is still very small,” says Jayant Vidwans, a Mumbai based SEBI RIA.
They say that the application and compliance costs are too high for anyone to register as RIA.
In 2014, SEBI raised the application fee for corporates and LLPs. Now, corporates and limited liability partners have to cough up Rs. 25,000 as application fee and Rs. 5 lakh as registration and renewal fee. Earlier, they had to pay Rs. 5,000 as application fee and Rs. 1 lakh as registration fee. Advisors have to pay the renewal fee every five years to retain their license.
Another Mumbai based RIA believes that the number may not go up further. “There is a fear of the unknown. SEBI can penalize us if it gets a complaint about our services and we don’t know how to go about compliance. I don’t think many distributors will register as there are many complexities involved in becoming RIA.”
The total number of IAs registered with SEBI now stands at 447, up from 268 last year. As on June 2016, 95 RIA applications are pending with SEBI. A majority of them are under process while others applicants have given incomplete information because of which their applications are still pending.
