"SEBI Registered Investment Adviser" isn't just a credential — it's a framework of obligations the adviser owes you under the SEBI (Investment Advisers) Regulations, 2013. Knowing what those obligations are tells you exactly what you're entitled to expect (and what should make you walk away).
What a registered adviser must do
- Sign a written advisory agreement. Before advice begins, you get a documented agreement setting out the scope of services, the fee, and the terms. No agreement, no advice.
- Profile your risk and assess suitability. Advice must be suitable for your documented risk profile and circumstances — and that assessment must be recorded (see our piece on risk profiling).
- Charge only within SEBI's fee limits, and only to the registered entity's account. Fees are capped — broadly, up to 2.5% of Assets under Advice per annum under the AUA mode, or a fixed fee up to a prescribed ceiling per family — and may never be collected in cash or to a personal account.
- Keep records and submit to compliance audit, hold the required qualifications and NISM certification, and be a member of the supervisory body, BASL.
- Disclose conflicts of interest in writing.
What a registered adviser must NOT do
- Take custody of your money or securities. A genuine IA never holds your funds. You invest through your own accounts; the adviser advises, you execute. No adviser should ask for a power of attorney to trade your account or for your login/OTP.
- Earn commission on what they advise you to buy. For a given client, an entity is either your adviser (paid a fee) or a distributor (paid commission) — not both. This separation is the legal backbone of conflict-free advice (see fee-only vs commission).
- Guarantee or assure returns. No registered adviser can promise returns; the market-risk warning isn't boilerplate, it's the law.
You also get recourse
If something goes wrong, you have a defined escalation path: the adviser's own grievance redressal, then SEBI's SCORES platform, and the Online Dispute Resolution (ODR) mechanism. An unregistered "advisor" or anonymous tipster owes you none of this — no agreement, no suitability duty, no fee cap, no custody rules, no complaints process.
Why this matters when you choose
Put together, the regulations mean a registered adviser must give you documented, suitable, conflict-managed advice — and can't quietly profit from steering you into particular products or take control of your money. That's a fundamentally different relationship from a product seller or a social-media stock tipster.
It's also why verifying registration is worth ten minutes (see our guide to checking a SEBI RIA): the label is only valuable because of the obligations behind it. Make sure the person you're trusting actually carries them.