In its do’s and don’ts note, SEBI has asked investors to deal only with SEBI registered investment advisers to avail investment advisory services. In fact, the market regulator has urged people to look at the list of SEBI RIAs and research analysts on its website before availing investment advisory services.
Further, SEBI has advised investors to pay advisory fees through banking channels such as NEFT, IMPS or cheque and maintain duly signed receipt with details of payments.
Here are SEBI recommended do’s for investors
- Ask for risk profiling before accepting investing advice
- Ask relevant questions and clear doubts with RIA
- Assess risk-return profile of the investment and understand concerns related to liquidity and safety aspects
- Insist on getting terms and conditions in writing
- Approach SEBI if RIAs offer assured returns
SEBI recommended don’ts
- Avoid falling prey to stock tips
- Do not give money for investment to RIAs
- Beware of stock tips or guaranteed returns
- Avoid getting carrying away by luring advertisements
- Don’t transact on the basis of phone calls or messages
- Don’t take decisions due to repeated efforts of sales person
- And finally don’t rush into making investments that do not match with risk appetite
As on May 2018, the total number of SEBI RIAs was 918. Of them, over half of them are individuals.