Registering advisory companies and individual advisors is a procedure followed by SEBI (Security Exchange Board of India) to ensure that investors’ interests are secured. A financial advisor can be an individual or a company. In the registration process, Sebi validates the identity of the advisory firm to know whether the information provided by an advisor is correct or not. SEBI issues a certificate of registration to the financial advisors which declare them valid for a period of five years from the date of its issue.
Investors enjoy numerous advantages when they refer a sebi registered investment advisor.
1. Qualification matters a lot – To be a certified advisor, an investment advisor should be a graduate, it preferable if he has a postgraduate degree or diploma in finance, accountancy or economics. In some cases, the advisor will be required to pass NISM Series-X-A and B exams. This makes sure that the investment advisor is a well educated person. This is extremely beneficial for a trader to get advice from a knowledgeable person because a learned advisor can provide better guidance to the investor regarding right investment.
2. Responsibility toward client – A registered advisor is more loyal toward their client. They provide investment advice to traders after planning risk associated with the particular segment. Complicated financial segments like derivatives should be suggested after examine the client’s knowledge, his experience in trading and capacity of bearing loss. After that, they provide trading tips to the trader just like stock tips, gold and silver tips and forex tips which is totally based on client’s budget and their demand. Every registered investment advisor will require communicating each and everything related to investment advisory services to the client. They are more responsible for their client’s interest.
3. Protection from frauds – Sebi examines the c apital value and infrastructure management of advisors. They check whether they have sufficient resources or not. They audit advisor’s financial transactions on a daily basis in order to know their background and daily activities. This secure investor from financial frauds. It also provides protection from loss of money. SEBI may cancel the certificate of a financial advisor for disagreement.
4. Satisfaction – Selecting a certified investment advisor is secure and also it provides investment satisfaction to the traders when they opt for registered financial experts, they assure that their money is in safe hands. This will arise a feeling of satisfaction among the investors.
5. Effective management of injustice – An advisor will have to settle client’s complaint within time. SEBI varifies that redressal of injustice between the financial advisor and trader by appointing a chancellor for them in order to solve their dispute calmly.
So these are the main advantage of selecting a certified advisor to manage your investment perfectly so that you can make a good income under their guidance.