The Securities and Exchange Board of India (Sebi) recently put out a draft proposal to segregate the role of an agent and an advisor, as there have have been numerous complaints about misselling of products by the so-called advisors. This happens mainly because the person we call our investment advisor is typically an agent or a distributor of mutual funds or insurance products or both. Since such 'agent-advisors' don't mostly get any fee for advice, they have to earn their living from the companies whose products they sell. Naturally, this could bias their recommendations.

As per SEBI draft proposal - The new advisor will be very different in terms of qualifications as well as record-keeping. The individual who wishes to get registered as an investment advisor should acquire a professional qualification from a recognised institute (for example, chartered accountancy from ICAI, MBA in finance or a similar qualification from a recognised university) or should have at least 10 years of relevant experience or a certification from NISM or such other organisation approved by Sebi for the purpose. Besides, the entities would need to maintain a minimum net worth that would be separate from the net worth required for other activities.

Source- economictimes.com

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