New SEBI norms bar investment advisors from distributing products to the same client

The Securities and Exchange Board of India (SEBI) has introduced new norms by which distributors of financial products will no longer be able to act as investment advisors to the same clients.

Firms that advise clients on buying, selling stocks or mutual funds will need to segregate their services from distribution of those products following changes to the law. SEBI has also introduced enhanced eligibility criteria for registration as an investment advisor, including for net-worth qualification and experience.

Moreover, distributors such as bank relationship managers will not be allowed to call themselves “financial advisors” or “wealth managers” unless they are registered with SEBI as advisors.