What preparation did you do to register with SEBI as RIA?
All we had to do was to submit the papers as required by SEBI. For example, they had asked for a business plan. So we wrote exactly what we had planned to do to take our business forward keeping in mind the regulatory requirements of SEBI. We also attached all the supporting forms and formats which we said we would be using in the business plan.
Is the process of registering complex? If yes, what difficulties did you face?
Not really. The only complaint I had was that it took a lot of time (4 months) from the date of submission to the date of granting of certificate.
What ambiguities/roadblocks did you come across in SEBIs Investment Adviser Regulations?
There are no road blocks but to many of us it is a complete change in the way we advise. Also, the way we maintain documentation changes. I am assuming that all those who seek RIA registration are concerned for their clients and intend to do the right thing by them, but now that intent has to be clearly seen on paper which means a lot of extra work. There is some level of ambiguity in the manner in which this record keeping is sought but I expect with the passage of time, SEBI will keep coming with clarifications and some sort of system will appear.
What are the benefits of registering with SEBI as RIA?
If you are genuinely working with the client interest at heart, then this is one way of actually demonstrating that intent. Secondly, on becoming an RIA, you will adhere to all the compliance requirements which automatically makes your processes disciplined and your work becomes professional.
What are your views on the cost of compliance with SEBI’s RIA rules?
Definitely, there will be a significant cost to it but it has to be simply added in your budget.
Is it feasible to sustain an RIA model only by charging fee?
This question haunts a lot of IFAs because they may have faced resistance or reluctance of fee payment from their clients. Obviously prospects have to be educated on the benefits of availing the services of RIAs and the need to pay professional fees. But the important point to remember is that these people need advice for sure (and this need is going to be increasingly felt), and today they are not willing to pay fees because they feel they have alternatives in the form of other intermediaries who will advise them free of cost. When everyone starts charging then they will have to choose someone not on basis of fees but on the basis of competence. So I feel it is only a matter of time for people to start accepting the fee model.
What would be your advice to IFAs who are considering registering with SEBI as RIA?
Just go for it. There is no alternative if you want to grow.
