Daybreak Why Sebi-registered advisors are now an endangered species
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Jul 1, 2025 Archisma Ayar, a colleague at The Ken, dives into the complex world of registered investment advisors (RIAs) in India. She highlights the alarming decline of RIAs, with a staggering ratio of one advisor for over 200,000 investors. Ayar discusses SEBI's regulatory impacts, which have hindered advisor numbers while fintech solutions like ET Money emerge to fill the gap. The conversation also touches on the evolving landscape of investor behavior and the challenges faced by retail investors in accessing affordable and effective advisory services.
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Registered Advisors Are Scarce
- The number of registered investment advisors (RIAs) in India has dwindled despite a massive increase in investors.
- There is roughly one advisor for every 200,000 investors, making RIAs an endangered species.
SEBI's Crackdown Backfired
- SEBI increased regulatory scrutiny on investment advisors to crack down on unregistered and unscrupulous actors.
- However, these measures also raised barriers, making it harder for legitimate RIAs to operate.
Increasing Shift to Digital Advice
- Direct mutual fund plans are growing as investors prefer no middlemen and better returns.
- Fintech firms are attempting to fill the advisory gap with automated, licensed, and cost-effective advice.