Quick summary
Everything you need to know about hiring a financial advisor in India. The difference between SEBI-registered RIAs and commission-based advisors, how to verify credentials, and what to expect from a first engagement.
The two types of financial advisors in India
In India, there are two fundamentally different categories of people who call themselves financial advisors. Understanding the difference is the most important thing you can do before hiring anyone.
A SEBI-Registered Investment Adviser (RIA) is a professional regulated by the Securities and Exchange Board of India under the SEBI (Investment Advisers) Regulations, 2013. An RIA is a fiduciary. Legally required to act in your best interest. They charge fees directly to clients and cannot receive commissions from financial products. This is the fee-only model.
A mutual fund distributor or insurance agent is not an RIA. They are paid commissions by fund houses or insurance companies when you invest through them. Their income is tied to the products they sell you. This creates an inherent conflict of interest. They are incentivised to recommend products with higher commissions, not necessarily products best suited to your goals.
- SEBI RIA: Fiduciary duty, fee-only, no commissions. Registered at sebi.gov.in.
- Mutual fund distributor (ARN holder): AMFI-registered, commission-based, not a fiduciary.
- Insurance advisor (IRDAI agent): Commission-based on insurance products sold.
- Wealth managers at banks: Typically commission-based or salary + product-linked incentives.
- Certified Financial Planners (CFP): A qualification, not a regulatory category. A CFP may be either a fee-only RIA or commission-based. Check separately.
How to verify a SEBI-registered RIA
Before engaging any financial advisor, verify their registration directly on the SEBI website. Do not rely on certificates displayed in their office or on their website. These can be outdated or fabricated.
Go to sebi.gov.in → Intermediaries/Market Infrastructure Institutions → Registered Intermediaries → Investment Advisers. Search by name or registration number. A valid SEBI RIA will have a registration number in the format INA000XXXXXX. Confirm the registration is active, not suspended or cancelled.
- Verify at sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=13
- Check registration number format: INA000XXXXXX (individual) or INA000XXXXXX (non-individual)
- Confirm status is 'Active'. Not expired, cancelled, or suspended
- Ask for their SEBI registration certificate and cross-check the registration number
- Individual RIAs must have a postgraduate degree in finance-related fields or professional certifications (CA, CFA, CFP, CS) as a qualification requirement
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Get quotes from financial advisors near youWhat a financial advisor actually does for you
A good SEBI RIA provides comprehensive financial planning, not just investment advice. The scope of a proper financial planning engagement covers your goals, your current financial position, your risk profile, tax planning, insurance review, retirement projection, and an investment strategy. All aligned.
In a first meeting (discovery session), the advisor should ask about your income, expenses, assets, liabilities, financial goals (timeline and amount), risk tolerance, and existing insurance and investment portfolio. If a financial advisor in the first meeting jumps straight to recommending products without first understanding your full financial picture, that is a warning sign.
- Financial plan preparation: Income, expenses, goals, insurance review, tax projection, retirement corpus calculation
- Investment portfolio design: Asset allocation, fund selection, rebalancing schedule
- Tax planning: Coordination with your CA on optimal investment structures, ELSS, NPS, and other tax-saving instruments
- Insurance review: Identifying gaps in life, health, and disability coverage
- Annual review and rebalancing: Keeping the plan aligned with changing goals and market conditions
- Goal-based planning: Education corpus, home purchase, business investment, retirement
What financial advisors charge in India
SEBI RIAs in India charge fees in one of three ways: a flat annual fee for a financial plan and ongoing advisory, an assets-under-advisory (AUA) percentage fee, or a per-session or per-plan fee. SEBI caps fees for individual investors at ₹1.25 lakh per year (as of 2024 regulations).
- Flat annual fee (financial plan + reviews): ₹15,000–₹75,000 per year
- AUA-based fee: 1–2.5% of assets under advisory per year
- One-time financial plan fee: ₹10,000–₹40,000
- Hourly consultation fee: ₹2,000–₹8,000 per hour
- SEBI fee cap: ₹1,25,000 per annum per client (individual/HUF)
- Commission-based advisors: 0% direct cost to you; 0.3–1.5% embedded in product (comes from your returns)
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