SEBI data on investors’ complaints shows that investors have lodged 12,175 complaints against RIAs (registered investment advisors). However, most of these complaints have been filed against advisory firms who are primarily into stock tipping and trading business. Many of these advisors do not deal with mutual funds at all.
Most of these companies are based out of Indore and Bhopal.
Digging deeper we see that of the total 1195 RIAs registered with SEBI as on June 2, the complaints were lodged against nearly 25 per cent (293). Epic Research Private Limited (697) and Trifid Research (637) have received the highest number of complaints. Both these firms give equity, forex, commodity and derivatives trading advice.
Firms with highest number of pending complaints are Highbrow Market Research Pvt. Ltd. (Ways2capital) (91) and Neha Gupta Prop. Trade India Research (89). Recently, SEBI put Highbrow Market Research under the scanner for reports of running a profit counter on their website, promising target returns and unfairly selling multiple packages (fees) to clients and advising investments without ensuring client suitability. Overall, the firm is said to have received investment advisory fee to the tune of Rs. 105 crore between FY 12-13 and FY 18-19. SEBI in its order dated May 23 has asked the firm and its employees to abstain from any investment activity. Moreover, its assets cannot be transferred without the permission of the regulator.
Another firm which was scrutinized by SEBI in February 2019, was Zoid Research. It has 575 complaints against it of which, 18 are pending. SEBI received multiple complaints of promised target returns, pressuring clients to pay fees from investors against the firm. Similar to Highbrow Market Research the company assets were held by SEBI and the firm and its employees are barred from participating in the securities market.
Very handful of complaints were lodged against RIAs dealing with mutual funds.
