How To Become a Retirement Adviser (Individual) In India?

To become Retirement adviser one must register with PFRDA (Pension Fund Regulatory and Development Authority). PFRDA has made it mandatory to register with them to offer retirement advisory services from June 2016. As per Gazette published “Retirement adviser” means any person being an individual, registered partnership firm, body corporate, or any registered trust or society, which desires to engage in the activity of providing advice on National Pension System or other pension scheme regulated by Authority to prospects/subscribers or other persons or group of persons and is registered as such under these regulations”.

How to get registered as Retirement Adviser?

One must register as retirement adviser and offer retirement advisory services offered by NPS or any other pension scheme regulated by PFRDA after commencement of Pension Fund Regulatory and Development Authority (Retirement Adviser) Regulations, 2016.

An Individual who fulfills the requirement can apply to PFRDA to register in Form A available on the regulators website along with supporting documents and Non -refundable application fee of Rs 500.

NISM is the accredited institute under the regulations. Other than the exempted individuals under the regulations, individuals must pass NISM-Series-XVII: Retirement Adviser Certification Examination to be eligible to register as retirement adviser with PFRDA. CIBIL Score certificate must be attached (CIBIL Score should not be less than 700 and not older than 6 months). Graduation is minimum eligible qualification and the same must be valid at all times.

Registration fee shall be 1000 rupees for individuals and they also need to provide a security deposit of Rs 10000.

Exempted Individuals from NISM Retirement Adviser Certification Exam

(i) an Investment Adviser registered with Securities and Exchange Board of India under its regulations.

(ii) any CERTIFIED FINANCIAL PLANNER (CFP) or ASSOCIATE FINANCIAL PLANNER (AFP)- Retirement Planning
Certification/s, awarded by Financial Planning Standards Board India (FPSB India). AFP is awarded by FPSBI to individuals who passed Retirement Planning & Employee Benefits Module and registered with FPSB India as AFP. FPSB India has established AFP Certification to enable product based advisory and specialized advisory services in a niche segment like retirement advisory, investment planning, insurance advisory etc.,

By Completing CFP one is eligible for exemptions to register as SEBI Registered Investment Adviser (RIA) and also as retirement adviser. Individuals other than Registered Investment Adviser & CFP/AFP need to pass Retirement Adviser Certification exam conducted by NISM. The exam is of 2 hours duration for 100 marks. Each wrong answer carries 25% negative marks and the required pass mark is 60%.

How to renew as retirement adviser?

Certificate of registration as retirement adviser is valid for 3 years. One need to renew atleast 3 months before the validity period. Initial eligibility conditions are applicable for renewal process too. It means if one get registered as Retirement Adviser by passing NISM Certification, at the time of renewal he must have valid NISM retirement adviser certification or be a CFP/ AFP (Retirement Planning and Employee benefits). The renewal fee shall be Rs 1000.

What are the fees that can be charged by Retirement Adviser?

Retirement can charge three type of fee from the subscribers to whom he/she has given retirement advise as per regulations and these fees are
a) On boarding charges of Rs 120 (Rupees One hundred and twenty only).

b) Subsequent transaction charges of minimum 20 rupees per transaction (Maximum of Rs 100 per year).

c) Advisory fee – Details of advisory fee will be notified later.

More operating guidelines, processes to be followed, infrastructure, risk profiling requirements are given in the gazette

source: PFRDA

Retirement advisory services in India are nascent stages. Many people, specially rural people are not aware of the importance and benefits of regulated pension products. It will be the role of retirement advisers to promote, educate and bring these people on board of NPS system.  India will have majority of population in the old age after 20-30 years (India’s advantage at present is it has highest population in the working age).  Due to non – availability of suitable social security schemes for old aged people, pension products will go a long way to help them in the golden age of retired life.  Its where retirement advisers play a pivotal role in educating people about these products and help them to save enough for their old age.  At the same time retirement advisers will be benefited by the way of fee commensurate with the services offered by them.