Sebi cautions public against unregistered investment advisors

In a move aimed at protecting investors against unscrupulous entities which promise exorbitant returns, Sebi wants the public to deal with registered investment advisors, a list of which is available on its website. When compensating these advisors, it wants investors to pay advisory fees through banking channels and maintain receipts of the same.

Since every investment product has a specific role to play in an investor’s portfolio, the regulator wants investors to ask for risk profiling before accepting investment advice. “Investors must understand the risk on the investment and the liquidity and safety before making any investment,” says the regulator.

The public should read terms and conditions carefully, particularly regarding advisory fees, advisory plans, category of recommendations etc. before dealing with any investment adviser. The public should not fall for the promise of indicative or assured returns by the investment advisers.


Investors should not get into any investment decision because of repeated messages and calls from advisors. Neither should they fall prey to limited period discounts or other incentives and gifts. Investors should avoid doing transactions only on the basis of phone calls or messages from any investment advisor.

The regulator has asked the public not to deal with unregistered entities and do not fall for stock tips offered under the pretext of investment advice.