SEBI Registered Investment Adviser Application Process: step by step guide

This is a detailed step by step guide to the SEBI Registered Investment Adviser Application Process under SEBI(Investment Advisers) Regulations 2013.  It will help anyone with the necessary qualifications (see below) to apply for SEBI RIA certification. This post is authored by Swapnil Kendhe a successful SEBI RIA. His website is vivektaru.

One of the first fee-only RIAs Melvin Joseph had earlier explained How to become a Registered Investment Adviser (RIA) in India. The current post is a sequel.

Introduction

SEBI came up with Investment Advisers Regulation in 2013 that segregated commission selling from investment advice. As per this regulation, no person can work as an investment adviser unless he is registered as an investment adviser with SEBI; and a registered adviser cannot receive remuneration or compensation in any form from any person other than the client being advised. This essentially means that an investment adviser must work on a fee-only model of advisory in India.

This regulation was heavily criticized by the adviser community which was mostly working on commission based advisory model till then. Many people thought that fee-only advisory cannot work in India because investors won’t pay for advice upfront to the adviser. But slowly this model began getting talked about over social media and elsewhere and many investors started seeking advice from fee-only advisers. It turned out that investors are willing to pay a fee for an unbiased advice even in India. Some of the early entrants into this model became successful and that started attracting more and more people to it. Today not only advisers but many DIY investors are thinking of leaving their jobs to become SEBI RIA.

Pros and cons of becoming a SEBI Registered Investment Adviser

The fee-only model removes inherent biases of commission-based advice and investors can be better served with this model, but it is tougher to execute compared to the commission-based model. It demands a higher degree of competence on part of an adviser compared to what he/she can get away with in commission-based advice. Not all fee-only advisers attract business either. Online business is skewed towards some established advisers and a few others who have better online visibility. Successful fee-only advisers are earning more than most people think they earn, while many others are struggling to get a steady flow of business.

Selling is an inseparable part of the advisory business, be it commission based or fee-only. Fee-only advice is a product that needs to be sold. You either have to figure out ways to attract online business or you have to sell it offline. Getting included in freefincal list of fee-only advisers doesn’t automatically generate business. If you think that you can become a successful RIA because you have good knowledge of personal finance and investing, you are probably approaching it from the wrong direction. The primary thing that determines the success of an RIA is how well he can sell himself as a fee-only adviser. Expertise comes distant second from a pure revenue point of view. So, think hard before taking the plunge.

If you have made up your mind to become a SEBI RIA, this article can help you with the registration process.

Eligibility for registration as an investment adviser in India

Following minimum qualifications are required to become an investment adviser in India.

  1. A professional qualification or postgraduate degree or postgraduate diploma in finance, accountancy, business management, commerce, economics, capital market, banking, insurance or actuarial science.
    or You should be 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.
  2. A certification on financial planning or fund or asset or portfolio management or investment advisory services from (a) NISM or (b) from any other organization or institution including Financial Planning Standards Board India (FPSB) or any recognized stock exchange in India provided that such certification is accredited by NISM.

In simple words, a postgraduate in finance-related topics or a graduate in any discipline with 5 years’ experience in the financial sector can pass following 2 examinations by National Institute of Securities Markets (NISM) and apply to SEBI for registration as an Investment Adviser.

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

If you are a Certified Financial Planner (CFP), you need not pass these 2 examinations.

(An MBA from any branch with zero relevant experience can become an RIA by passing two NISM exams. Likewise, an insurance agent with 5 years’ experience in insurance selling also qualifies to become an RIA if he has a graduate degree in any discipline.)

Documents required

  1. Proof of Identity
  2. Proof of address
  3. Proof of qualification (Degree certificates, NISM exam certificates or CFP certificate)
  4. Experience Certificate in case of graduates (e.g. Insurance agency license, MF ARN card etc.)
  5. CIBIL Score
  6. Net worth certificate from a Chartered Accountant (Minimum net worth requirement is rupees one lakh for individuals or partnership firm.)
  7. Income Tax Returns for the last 3 years
  8. Various declarations.

Registration process

The registration process is completely online. There are three steps in the registration process.
1. Getting access to the SEBI Intermediary portal by paying the initial registration fee of ₹5000.
2. Filling RIA registration form on SEBI intermediary portal and uploading relevant documents.
3. Paying registration fee of ₹10,000 after the application is approved by SEBI.

Step 1: SEBI Registered Investment Adviser Application Process

Getting access to SEBI Intermediary portfolio
Go to https://siportal.sebi.gov.in/intermediary/index.html
Click on Self-Registration

SEBI Registered Investment Adviser Application Process step 1

Fill in the application details and click on proceed.

Step 2: Payment

Payment can be made by internet banking or debit card. Click on payment mode ‘Online’ and then click on ‘proceed to pay’. It will direct you to the payment gateway.

Step 2 of SEBI Registered Investment Adviser Application Process

After payment is made, you will receive following mail from SEBI

Step 3: Acknowledgement email

step 3 of SEBI Registered Investment Adviser Application ProcessStep 4: Activation link email

It takes a few days to get SEBI Intermediary portal login ID and portal activation link.

step 4 of SEBI Registered Investment Adviser Application Process

Step 5: Submit Application

The application is to be submitted within 14 days of receiving login id and portal activation link mail, failing which self-registration expires and application fee is not refunded.

On login to SEBI intermediary portal, following home page appears.

step 5 of SEBI Registered Investment Adviser Application Process

Click on Investment Adviser and navigate to the registration

This opens Investment Adviser registration form A. There are 7 sections in the application form as mentioned below.

Section 1: General Information

This consist of general information like name, registered office address (residential address can be given in case of individual applicants), correspondence address, address of principal place of business, details of the contact person, details of registration if applicant is registered with SEBI, RBI, IRDA or PFRDA in any capacity e.g. insurance agency license number with its start and end date etc.

In addition to this you have to write about your present and past activities majorly related to investment and personal finance; like MF AMCs you are empanelled with, your MF AUM, insurance companies you are associated with and other relevant activities.

Section 2. Details of applicant

In this section you have to upload self-certified copies of identity proof, address proof, supporting documents in respect of qualification, supporting documents in respect of experience like AMFI registration card, insurance agency license etc., NISM investment adviser exam certificates or CFP certificate, 3 years Income tax return and the copy of net worth certificate from a chartered accountant. Here is a sample of net worth certificate.

Section 2. Details of applicant in the SEBI Registered Investment Adviser Application ProcessSection 3. Business Plan

In this section, you have to upload a pdf copy of your proposed business plan that includes the advisory model you will work on e.g. financial planning, stock advisory etc., pricing of the advisory services, number of clients you are targeting to acquire and tools and resources you will use to execute the business plan. Here is a sample business plan.

sample business plan for SEBI Registered Investment Adviser Application

In addition to the business plan, you also have to mention the type of products or securities on which investment advice is proposed to be rendered. Here is a sample.

type of products or securities on which investment advice is proposed to be rendered

You also have to upload pdf document mentioning the process you will follow for risk profiling of clients and for assessing the suitability of advice. Here is a sample

pdf document mentioning the process you will follow for risk profiling of clients

Section 4. Details of infrastructure

In this section, you have to give details of office space, office equipment, furniture and fixtures, communication facilities and softwares or online tools you will use for undertaking investment advisory services.
In addition to this, you have to upload documentary evidence of the office space. You can prepare a document with pictures of your office space along with an electricity bill or rental agreement in case of a rented office. This is what I had submitted for documentary evidence of office space.

proof of office space for SEBI RIA registration

You also have to upload the declaration of necessary infrastructure to effectively discharge the activities of Investment Adviser. Here is the sample of this declaration.

declaration of necessary infrastructure to effectively discharge the activities of Investment Adviser

You can upload scanned copies of self-signed declaration if you do not have digital signature. Up to 2mb file can be uploaded.

Section 5. Execution services 

This section is relevant for body corporates who propose to offer distribution or execution services to its clients through a subsidy or separate identifiable department or division. Independent applicants have to upload a declaration that they will not carry out any distribution and execution services post-grant of registration of investment adviser by SEBI. Here is a sample of this declaration.

Independent applicants have to upload a declaration that they will not carry out any distribution and execution services post-grant of registration of investment adviser by SEBI

Section 6. Other information/ declarations

In this section you have to upload CIBIL report,  declaration that the applicant is fit and proper persons based on the criteria as specified in Schedule II of the SEBI (Intermediaries) Regulations, 2008 and the declaration that the applicant shall not obtain any consideration by way of remuneration or compensation or any other form whatsoever, from any person other than the client being advised, in respect of the underlying products or securities for which advice is provided to the client. Here are samples of these two declarations.

declaration that the applicant is fit and proper persons based on the criteria as specified in Schedule II of the SEBI (Intermediaries) Regulations, 2008

declaration that the applicant shall not obtain any consideration by way of remuneration or compensation or any other form whatsoever, from any person other than the client being advised

Section 7. Declaration statement

In this section you have to upload pdf copies of declarations that you currently comply with the certification and qualification requirements under section 7 of SEBI (Investment Advisers) Regulation, 2013 and the declaration that you shall ensure that you will comply with the certification and qualification requirements under section 7 of SEBI (Investment Advisers) Regulation, 2013, 2013 at all times. Here are samples of these two declarations.

declarations that you currently comply with the certification and qualification requirements under section 7 of SEBI (Investment Advisers) Regulation, 2013 and the declaration that you shall ensure that you will comply with the certification and qualification requirements under section 7 of SEBI (Investment Advisers) Regulation, 2013, 2013 at all timesYou then have to tick following declaration statements and submit the application.

  1. I/We hereby agree and declare that the information supplied in the application, including the attachment sheets, is complete and true.
    AND I/ we further agree that, I/we shall notify the Securities and Exchange Board of India immediately any change in the information provided in the application.
  2. I/ We further agree that I/ we shall comply with, and be bound by the Securities and Exchange Board of India Act, 1992, and the Securities and Exchange Board of India
    (Investment Advisers) Regulations, 2013, guidelines/instructions as may be issued by the Securities and Exchange Board of India from time to time.
  3. I/ We further agree that as a condition of registration, I/ we shall abide by such operational instructions/directives as may be issued by the Securities and Exchange Board of India from time to time.

Step 6:  Registration Acknowledgement & Submission to SEBI Office

After submitting the application form on SEBI portal, you will receive following mail with a pdf copy of the application form you submitted on the portal.

mail with pdf copy of the application form you submitted on the portal

You have to take a print of the application form attached in the mail, sign it and submit or courier it to SEBI office along with self-attested documents and declarations you uploaded on SEBI portal.

Step 7: Initial approval & Payment

It usually takes 15 to 20 days to get first response from SEBI after the application is submitted on SEBI portal. You are asked to fulfil deficiencies if any in the application. If there are no flaws in the application, the first response from SEBI is to inform you that your registration is approved.

SEBI Registered Investment Adviser Registration Appoval

You have to pay the registration fee of ₹10,000 on SEBI portal after registration is approved. RIA certificate is issued within 2 to 3 working days of paying the registration fee.

Step 8: Final approval and receipt of RIA certificate

final SEBI registration approval

Scanned copy of RIA certificate is mailed to you and a hard copy is couriered to your address immediately after RIA certificate is issued.

Please join me in thanking Swapnil Kendhe for this exhaustive guide detailing the SEBI Registered Investment Adviser Application Process. Here is more information about Swapnil

About the author

Regular readers may be aware that Swapnil’s website is vivektaru and is part of the freefincal list of Fee-only Financial Planners and Fee-only India:  a movement to serve investors and advisors. His successful transition from mutual fund distributor to SEBI RIA has been documented here: Fee-only advisor journey: Swapnil Kendhe’s successful transition into a SEBI RIA This is his guest post at freefincal: Are you a conservative investor? Here is how you can grow your money smartly

 

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