Market regulator Securities and Exchange Board of India (SEBI) is working on a series of measures, including standardised light touch penalty structure for investment advisors, digital guidance platform and a common advertisement code, to strengthen the ecosystem for registered investment advisers as investor base expands rapidly.
Speaking at an event of Association of Registered Investment Advisers (ARIA), Aspire 2026, SEBI Chairman Tuhin Kanta Pandey said the regulator is working on a standardised light-touch penalty structure for investment advisers, which would encourage compliance while ensuring fairness and transparency in enforcement. “A standardized light-touch penalty structure for IAs is being worked out. This should promote compliance while ensuring transparency and fairness,” he said.
Also, SEBI is developing a digital platform called SEBI SETU that will provide end-to-end regulatory guidance to investment advisers, from registration to ongoing compliance. The initiative is aimed at making regulatory processes simpler and more accessible for market participants.
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Pandey also said that, regulator is preparing a common advertisement code for all market intermediaries, which is expected to reduce operational challenges and bring greater consistency in how financial services are promoted.
The regulator is also developing a simplified certification module through the National Institute of Securities Markets (NISM) for individuals associated with investment advice who perform non-core roles such as sales functions.
Pandey said SEBI will continue outreach efforts to encourage more qualified professionals to enter the registered advisory space, and urged industry bodies such as ARIA to complement these efforts by strengthening professionalism and knowledge sharing.
“SEBI will continue outreach to encourage more qualified professionals to enter the registered advisory space. ARIA must complement that effort,” Pandey said.
Currently, there are around 1,000 registered investment advisers (IAs) in the country, including 470 individuals and 530 non-individual entities. While the number of registered IAs has declined in recent years, there has been a shift towards non-individual entities, indicating a move towards a more institutionalised ecosystem.
Pandey expressed concern that the number of registered investment advisers has declined since 2021. He said that as the domestic investor base expands rapidly, the market will need more regulated advisers.
He cautioned that if the supply of qualified and registered advisers does not keep pace with demand, the gap could be filled by unregulated voices such as finfluencers, “who present opinion as expertise and speculation as strategy,” he said.
Review of regulatory overlap
As part of the broader regulatory review, SEBI has set up a working group to examine the existing framework governing mutual fund distributors and investment advisers, and to harmonise any overlaps between the two segments.
The move comes amid the evolving structure of advisory ecosystem, where different types of intermediaries often provide overlapping services to investors.
Promoting the culture of Responsible Investing
SEBI Chairman Tuhin Kanta Pandey urged investment advisers to uphold their fiduciary duty by providing unbiased, investor-focused advice. He asked them to promote responsible investing, educate clients about risks, and spread awareness against fraud and cyber threats. Advisers must maintain strong governance and transparency, while industry body Association of Registered Investment Advisers should strengthen professionalism and knowledge sharing. He said, “we expect advisers to help build a culture of Responsible Investing. India needs better-informed investors. Many investors still enter the market with limited understanding of risk. Many are influenced by peers, social media, and the lure of quick gains. Your role is to not only advise. It is also to shape investor behaviour”.
Technology and trust key to future
Pandey said the future relevance of investment advisers will depend on their ability to adapt to rapid technological change while maintaining investor trust.
“Technology will continue to improve. Investor expectations will continue to rise. Markets will become more data-rich, more dynamic and more demanding,” he said.
According to him, advisers who combine technology with trust, knowledge with judgment, and efficiency with empathy will remain highly relevant in the evolving financial landscape.
He also urged advisers to embrace new technologies but cautioned against over-reliance on automation. “In a world full of information, judgment becomes more valuable. In a world full of noise, trust becomes more valuable,” he said.
Growing importance of financial advice
The SEBI chief said capital markets are expanding rapidly in terms of scale, depth and investor participation. Strong advisory services can help investors move from impulsive trading to disciplined long-term investing and participate in India’s growth story with greater confidence, Pandey said.
He added that the regulator will continue to promote ease of doing business for intermediaries while maintaining a strong focus on investor protection, accountability and trust in the securities market.
Also read: Govt eases public shareholding norms to facilitate mega IPOs
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