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  • MF News Even after 10 years India has just 1300 investment advisors

    Even after 10 years India has just 1300 investment advisors

    Of the total 1299 RIAs, 828 RIAs have individual license i.e. they are fee only advisors.
    Nishant Patnaik and Zahra Gour Apr 7, 2023

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    India has close to 1300 SEBI registered investment advisors (RIAs) as on March 2023.

    Of the total 1299 RIAs, 64% of the total RIAs or 828 RIAs have individual license, shows SEBI data. If we remove Indore RIAs, who are into stock tipping business, the number of individual RIAs is close to 700.

    The number looks small if we compare it with 1.33 lakh mutual fund distributors. In fact, the MF industry has added over 20,000 new MFDs between April and February 2023.

    Total RIAs

    Individual

    Corporate

    Ratio of individual RIAs to total RIAs

    1299

    828

    471

    63%

     

     

     

     

    Mumbai RIA Suresh Sadagopan of Ladder7 Wealth Planners attributes this to stringent SEBI norms. He said, “Becoming RIA requires a professional to spend a lot of money on compliance. Another reason could be the necessity of becoming corporate RIA once the number of client crosses 150. Further, requirement of appointing employees with higher educational qualification increases cost of doing business substantially for many.”

    Vishal Dhawan of Plan Ahead Wealth Advisors, Mumbai believes that many people are not sure if clients are willing to pay fees for financial advice. He said,” Many intermediaries believe that they are not in a position to ask for a fee from their client.”

    Bangalore RIA Dilshad Billimoria of Dilzer Consultants feels that cap on fees is a major deterrent. She said, “The idea of capping advisory fees in absolute terms discourages many individuals to become RIAs.”

    Kalpesh Asher of Full Circle Financial Planners & Advisors, Mumbai feels that the regulator and the industry should work towards increasing awareness about RIAs.

    The data further shows that a good number of RIAs are from Mumbai. The commercial capital of India alone contributes 31% to the total RIAs with 405 RIAs including 216 individual RIAs.

    Bangalore and Hyderabad follow Mumbai with total count of 115 and 38, respectively. Please note that we have excluded Indore from this due to mentioned reason.

    City

    No. of Individual RIAs

    No. of corporate RIAs

    Total count

    Mumbai

    216

    189

    405

    Indore

    113

    25

    138

    Bangalore

    56

    59

    115

    Hyderabad

    18

    20

    38

    Delhi

    61

    32

    93

    Other cities

    364

    146

    510

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    3 Comments
    Anurag bhatnagar · 1 year ago `
    Exactly , Every time we have only SEBI issuing something negative for MF dicstributor. Infact , IRDA is much better and have given more helping hand to agents and same is for medical insurance agents.
    SEBI shd understand than Indian market is not developed and client will never agree to make fees. Infact, if CA's find it hard to get fees from client on time , how can SEBI visualise that fees will be paid for distributors.
    Infact , SEBI shd always give upper hand or helping hand to MFD .They should analyse , What % of direct plans are still on going and what % of them has been stopped / liquidated within different time frames.

    If Indian market needs to grow , MFD must be given more support and responsibility.
    Shiv Kalra · 1 year ago `
    Bank ko bolo, apne branch mein MFD rakh ke mutual fund becheneki jagah RIA rakhe, phir dekho RIA 1300 se badke 1.32 lakh ho jayenge. PURRRRRRRRRRRRRRR.
    Bajrangi Chaubey · 1 year ago `
    Har koi apna ghar chalane ke liye kaam karta hai par yaha har baar mf distributor and RIA ke pet pe sebi laat marti hai,wahi adhikari ji har saal apna salay and incentive hike lete hai mutual funds distributor ko hamesh rate cut ka samana karna padata hai.Din b din badhati mahangai ke beech apna income kam hote dekh koi kyon is business me ayega? Sebi ne to jaise mutual fund ko barbad karne ki thaan li hai abhi B30 bhi band kar diya gaya sebi ko lagata hai ki investor itna jagruk ho gaya hai ki kisi distributor ki jarurat hi nahi hai.Sebi to kafi khush hoga ia data par, distributor kam hone so sebi ke adhikari ka salary thode hi kam hoga ki wo isko lekar pareshan ho aur distributor ki sankhya jyada bade is ke liye kaam kare.
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