Graduates To Be Allowed To Become Registered Investment Advisors? What We Know

Do you know now even a graduate can become a research analyst in the stock market? Recently, the Securities and Exchange Board of India (SEBI) issued a consultation paper on August 6, proposing this. Till now, a postgraduate was required for this. In the recent paper issued by SEBI, it has been said that there is a need to increase the number of registered investment advisors in the country. Currently, there are 961 registered investment advisors in the country. SEBI believes that due to their low number, people get lured by fake advisors.

SEBI can change the rules to increase the number of registered investment advisors. So, now it can give licenses to be investment advisors to those who are only graduates. Till now, only postgraduates are considered for this. Apart from this, 5 years of work experience is also considered. SEBI is preparing to remove this condition as well. Experts say that if the regulator implements this proposal, then it will increase people’s interest in the profession of investment advisor.

Currently, a research analyst must have a certificate in financial planning. To renew this certificate, one has to take an exam every year. It is believed that SEBI can also eliminate the requirement of taking an exam again and again. Research analysts can get a certificate from recognized institutes like the National Institute of Securities Markets or Certified Financial Planner.

Reports suggest SEBI can also change the rules for charging fees from customers. It is believed that it will be made easier. Currently, a research analyst can charge Rs 1.25 lakh annually as a fee from a single family. He can get it as a fixed fee or as a fixed value of the total asset.

SEBI has also permitted individuals and partnership firms to seek registration for providing services as both RIAs and RAs, subject to compliance with rules and regulations. The paper proposed to demarcate the scope of investment advice of an RIA to a specific product belonging to an asset class falling within the regulatory purview of SEBI or other financial regulators.

SEBI has also proposed that RIAs and RAs using artificial intelligence tools for servicing clients will be required to disclose the extent of use of these tools to their clients. Additionally, the responsibility for data security and compliance with regulations would lie solely with RIAs and RAs.