What preparation did you do to register with SEBI as RIA?
There was not much preparation needed. I met all the SEBI requirements in terms of experience and qualification. As an individual RIA, the total net worth required was Rs.1 lakh and I was eligible to register as RIA.
Is the process of registering complex? If yes, what difficulties did you face?
The process of registration is simple for individual advisors. I did not face any difficulties as a co-ordinator from SEBI helped us with the registration process. I got the registration certificate within 25 days of applying.
What ambiguities/roadblocks did you come across in SEBIs Investment Adviser Regulations?
There are many grey areas. For instance, we have to get the compliance audit done either from a CA or CS. SEBI does not has any specific format for this audit. So every time we have to work on a different format. Hence, I would request SEBI come up with a common format for audit.
What are the benefits of registering with SEBI as RIA?
People start recognising you as a trusted adviser. Just like doctors and lawyers are given a license, RIA registration enhances your credibility as an adviser.
What are your views on the cost of compliance with SEBI RIA rules?
I got the RIA registration certificate in 2014. The compliance cost is justifiable as it includes annual audits which is done by SEBI.
Is it feasible to sustain an RIA model only by charging fee?
In my case, some clients are reluctant to pay fees. So yes, it is certainly not feasible for an RIA to sustain only on fees. Hence, I have a distribution entity as well.
What would be your advice to IFAs who are considering registering with SEBI as RIA?
I guess no one will label you as ‘bad’ if you are a distributor.
I have been conducting training programs for CFPs and I advise them to adopt the RIA model otherwise the CFP qualification would not have any worth.
Alternatively, different models can come up. For instance, distributors can tie-up with a few RIAs who can take care of advisory service.
