A financial adviser is a professional who provide investment advice and
financial planning services
to individuals and businesses. Ideally, the financial advisor helps the
client to maintain the desired balance of investment income, capital
gains, and tolerable level of risk by using proper asset allocation.
Financial advisers use investing options to meet the needs of their
clients.
All financial and investment advisors are
regulated by a single regulator, the Securities and Exchange Board of
India (Sebi). The Sebi is likely to regulate them through a private
sector self-financing regulatory organization. Sources said the
government and the Sebi had agreed that the market regulator would
begin the process of registering and regulating investment advisors and
distributors in the securities market. The Sebi has expressed concerns
that unregulated advisors may have some hidden schema behind giving
certain advice, which could be harmful to the investors' interest. The
sources also said that advisors might have to give an undertaking to
the regulator that they would follow fair practices in other advisory
functions not regulated by the Sebi, when they registered with the Sebi.
There should be a single regulator for investment and financial advice
for effective regulation. But a consensus is hitherto to emerge among
all the regulators concerned. The ideal view is that the Sebi should
regulate all types of financial and investment advisors.
|