How To Become An Investment Adviser?

After introduction of  SECURITIES AND EXCHANGE BOARD OF INDIA (INVESTMENT ADVISERS) REGULATIONS, 2013, no one in India can not act as investment advisor unless registered with SEBI under these regulations.  If any person is acting as IA (Investment Advisor) by the time of notification of these regulations, they must get registered under these provisions with in 6 months.

Who are not required to register as Investment Advisor with SEBI

  1.  Anyone offering a general comment on economy, financial or securities markets without specifying particular products for investment.
  2. Investment advice given in widely available public mediums like news papers without any considerations
  3. IRDA registered insurance agents or brokers solely offering insurance products.
  4. PFRDA registered pension advisors who are offering investment advice on pension products
  5. AMFI registered mutual fund distributors who receive fees from investors under SEBI (Mutual Funds) 1996 regulations.
  6. Stock Brokers, Sub-brokers, Portfolio Managers and Merchant Bankers registered under respective Regulations, who provide any investment advice to their clients solely incidental to their primary activity. etc.,

Investment Advisers Registration Requirements

Registration requirements for investment advisers under SEBI Investment Advisers Regulations are applicable at the time of registration and also applicable at all the times of continuation.

  1.  A professional qualification or post-graduate degree or post graduate diploma.
  2. A graduate in any discipline with an experience of at least five years in activities relating to advice in financial products or securities or fund or asset or portfolio management.
  3. A certification on financial planning or fund or asset or portfolio management or investment advisory services from NISM or any other organization or institution including fpsbindia or others provided they are accredited by NISM.

The certification of registration as investment adviser is valid for 5 years from the date of issue and must be renewed to continue as investment adviser before expiry of the license.  Usually such renewal of investment adviser license must be made before 3 months of expiry of the license.

Individuals or partners need to pay a fee of 5000 rupees as application fee and 10000 rupees as registration fee.  Application fee for body corporate is  5000 rupees and registration fee is 1 lakh rupees.

Exemptions to register as investment adviser

NISM has accredited the following certifications for Investment Advisers under Regulation 7(2) of Securities and Exchange Board of India (Investment Advisers) Regulations, 2013.  Persons with these qualifications can apply to SEBI for registration without any further exams.

  1.  Certified Financial Planner (CFP) offered by Financial Planning Standards Board India (FPSB India)
  2. Chartered Wealth Manager (CWM) offered by American Academy of Financial Management India Pvt. Ltd.

and other certification that may be accredited by NISM in due course.

How to be an investment adviser?

Along with the two ways mentioned above, NISM conducts examinations to get eligibility to register as investment adviser.  Two examinations form NISM need to be passed if this path is chosen to register as investment adviser.

The exams offered by NISM for eligibility to register as investment adviser in India are

  1. NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and
  2. NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination.

These exams are of two hours duration and conducted by NISM all over India.

For complete details about investment adviser regulations of SEBI please read the gazette notification in this regard.