SEBI Registered Stock Advisory Company – Why Hire One?

You may be MBA finance, CA, CFA yet your returns may be below average. A lot of investors confuse investing in stocks to be as easy as reading a financial daily, it is not the case. Investing and portfolio management are full time jobs and a SEBI registered stock advisory company does it for you. 

In the following article, we will try to understand why should you compulsorily hire a SEBI registered stock advisory company.

SEBI Registered Stock Advisory Company Can Help You Build a Financial Plan 

There are over 6,000 listed securities on the Indian stock exchange across various market caps. Stocks can be high growth, high dividend paying etc.

How do you distribute your funds among various stocks is the question? A portfolio should be moderately diversified and should have more concentration of stocks which suits your risk profile.

A SEBI registered stock advisory company will build a financial plan incorporating investment objectives and constraints. Some of the risk constraints that a SEBI registered stock advisory company would consider are following –

  1. Liquidity 
  2. Time horizon 
  3. Tax 
  4. Legal & Regulatory  
  5. Unique circumstances 

Likewise, SEBI registered stock advisory company will employ the following steps to determine the return objective of the investor –

  1. Specifying Measure of Return 
  2. Desired Return 
  3. Required Return 
  4. Specific Return Objectives 

Portfolio Reviews & Rebalancing 

Since portfolio management is a full time activity, stock advisors have in house research wing to read up on businesses, read annual reports, attend quarterly conference calls, talk to distributors and suppliers and keep ears to the ground. 

Further, an investor should understand the Investment philosophy and process of the advisor, is your advisor doing in depth research before recommending stocks.

Do the SEBI registered investment advisor do the industry analysis, competition check, valuation check, study all risk factor to the stock?

For a working professional for whom stock market investing is not a full time job, he ought to have a SEBI registered advisor to review portfolio periodically, generally the frequency for portfolio review and rebalancing will be, once a quarter.

How to Assess Expertise & Knowledge of a SEBI Registered Stock Advisory Company 

SEBI is the governing body for Indian capital markets; it has laid down laws and regulations for the service providers.

A SEBI registered stock advisory company is registered with SEBI (Securities & Exchange Board of India) and assigned SEBI registration number.

Any investor would want the best SEBI registered investment advisor for his or her portfolio and the search of the advisor starts from verifying whether advisor is registered with SEBI. 

Alpha Invesco has registered itself with SEBI and our SEBI registration number is: INA000003106. To verify the authenticity of a SEBI registered stock advisory company, you can go on the website of SEBI and verify the registration of your advisor. 

Further, a SEBI registered stock advisory company has to write the NISM – Series- X-A: Investment Adviser (Level 1) Certification Examination, post which they are eligible for doing business as a SEBI stock advisory company. 

An associated person from the stock advisory company shall be required to pass both the levels (i.e. NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination) to fulfill the requirements under Regulation 7(2) of the SEBI (Investment Advisers) Regulations, 2013.

Examination Objectives:

On successful completion of the examination, the candidate should:

  • Know the basics of investment advisory, steps in the advisory process, making and implementation of financial plan.
  • Understand how to evaluate different products, their suitability and how the recommendation of the same can impact investment risks, returns and strategies in a personal finance environment for investors and prospective investors in the market.
  • Get oriented to the Income tax, Wealth tax and legalities of Estate planning in personal finance, and regulatory aspects underlying advisory.
  • Get acquainted with financial planning as an approach to investing, insurance, retirement planning and an aid for advisers to develop long term relationships with their clients.

Can A SEBI Registered Stock Advisory Company Help you Against Frauds 

In the recent past, corporate India has witnessed so many frauds such as IL&FS, DHFL, PMC Bank, PNB etc. It requires a lot of work to be able to stay away from fictitious businesses and promoters.

Though, no SEBI registered stock advisory company can claim to be invincible to fraudulent companies and promoters but the probability of identifying wrong doings in stocks rises multifold when you subscribe to a SEBI registered stock advisory company.

Further, an investor should do a background check on his stock advisor by meeting him/her and asking for credentials and a track record of previous holdings.

Alignment of Interest

SEBI Registered Investment Advisors or SEBI RIA are advisors which generally charge you fees directly instead of indirect fees for selling anyone’s products. This eventually leads to an unbiased advice as the source of income for the advisor is not dependent on any Asset Management Company. 

Investors would want to continue with an advisor only if they are happy with the returns and hence investment advisors intentions are in-line with the investors, which is to generate better returns.

So one has to decide whether saving on fees is worth jeopardising his investment goals (and in most cases you are anyways paying indirect fees)?

Disclaimers :

The information herein is used as per the available sources of, company’s annual reports & other public database sources. Alpha Invesco is not responsible for any discrepancy in the above mentioned data. Investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents

Future estimates mentioned herein are personal opinions & views of the author. For queries / grievances  – or call our support desk at 022-48931507.

SEBI registration No : INA000003106

Readers are responsible for all outcomes arising of buying / selling of particular scrip / scrips mentioned here in. This report indicates opinion of the author & is not a recommendation to buy or sell securities. Alpha Invesco & its representatives do not have any vested interest in above mentioned securities at the time of this publication, and none of its directors, associates have any positions / financial interest in the securities mentioned above. 

Alpha Invesco, or it’s associates are not paid or compensated at any point of time, or in last 12 months by any way from the companies mentioned in the report.

Alpha Invesco & it’s representatives do not have more than 1% of the company’s total shareholding. Company ownership of the stock : No, Served as a director / employee of the mentioned companies in the report : No. Any material conflict of interest at the time of publishing the report : No.

The views expressed in this post accurately reflect the authors personal views about any and all of the subject securities or issuers; and no part of the compensations, if any was, is or will be, directly or indirectly, related to the specific recommendation or views expressed in the report.

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