In India, investor education lags in almost every respect. Stock advisory services mainly provide investment ideas, including finding the right assets for the investors, stock suggestions, and other investing tips. Many investors hugely rely upon these services to find their way into the share market in our country. So it is a very nice idea to become a stock advisor and provide stock advisory services. Read through this entire article to know how you can start your stock market advisory services.
Brokerage firm
Let us begin by understanding what a brokerage firm is. A brokerage firm is a company that offers stock advisory services. It usually facilitates buying and selling of security for the investors or traders. However, most stock brokerage firms also act as stock advisory firms. They provide all kinds of advisory services, from intraday trading to long-term investment in the share market. Here, an interested and eligible candidate can register as a financial or investment advisor. The market regulator, the Securities and Exchange Board of India (SEBI), provides a complete procedure to become a registered investment advisor (RIA). Following the guidelines, one can easily become an investment advisor and start offering stock market advisory services.
Eligibility to become an investment advisor
Before applying for a licence, one must know the requirements for becoming an investment advisor.
Educational requirements
1. A person must be a postgraduate in finance accounts, business management, commerce, insurance, economics, or capital market.
2. An individual may also possess a graduate degree from any stream or subject to start offering stock advisory services. However, they must have experience of at least five years in advisory services dealing in different classes, portfolio management services etc.
Certificates to possess
To provide stock advisory services, you must have any of the certificates mentioned below.
1. A certification of NISM, Series X-A of Level 1
2. A certification of NISM, Series X-A: Level 2
3. A Certificate of Financial Planner from the Financial Planning Standards Board India (FPSB).
Regulatory obligations
1. If an applicant is an institution such as a bank or a non-banking financial company (NBFC), it should have the permission of the Reserve Bank of India (RBI). The RBI must provide the due clearance to the firm to act as an investment advisor.
2. If the concerned applicant is an individual, they must receive the registration certificate from the Securities and Exchange Board of India (SEBI).
3. The SEBI also permits insurance agents to become registered investment advisors. However, they must have at least five years of experience with all the relevant degrees from the disciplines listed earlier.
Financial requirements
To become a registered investment advisor, it is also necessary to fulfil specific financial requirements. Here are the following guidelines laid down by the SEBI.
1. A person's total assets or funds would be a minimum of rupees 2 lakhs.
2. The minimum requirement for a financial institution such as a bank, NBFC or any other corporate body stands at 25 lakhs.
Process of registering with the SEBI
The following are the steps to register with SEBI and become a recognised investment advisor. After obtaining the licence from SEBI, you can start offering stock market advisory services.
1. First, access SEBI's intermediary portal and go to the self-registration page.
2. Find the application form and fill in all the necessary details.
3. Next step is to deposit the required fee as mandatory by the SEBI. Choose your payment method and complete your payment. You can make the payment through internet banking or use a debit or credit card to pay the due amount.
4. Wait for the confirmation receipt from the SEBI after making the payment. You will receive it within seven days, along with the login ID and password.
5. Now, complete your application for RIA. Login to your account using the ID and password you received. Upload all the documents and fill up form A. Here you will need to submit your personal information, the business strategy infrastructure you possess and the declaration per the 2008 schedule-II of SEBI intermediaries regulation.
Conclusion
So you can follow the procedure provided by the SEBI to become an investment advisor and start offering advisory services. You can become an individual advisor or register with any good financial firm such as IIFL securities their stock trading app is easy to use and consist lots of features. It has an independent advisor anywhere, anytime program, which assists individuals in becoming investment advisors. With it, you can create your own set of services. Just visit their online portal and sign up to become an RIA. Start offering your services and realise your dreams as you see them.