How to select an Hourly-Fee Financial Planner
Read the RIA’s website and articles to shortlist three that will speak to you
The Securities and Exchange Board of India (Sebi) believes there is a conflict of interest involved in distribution (i.e., earning a commission from selling) of any financial product such as mutual funds (MFs). For example, an MF distributor may find it extremely difficult to resist selling an MF that pays 10 times the annual commission (e.g. 1% per annum), compared with another MF’s annual commission (e.g. 0.1% p.a.). Hence, Sebi created a category called Sebi-registered investment advisers (RIA) in 2013. RIAs charge clients a fee and, ideally, they should not earn any commission. So, and on average, an RIA should have lesser conflicts of interest than an MF distributor. You or your spouse are likely to engage with an RIA at some point in your lifetimes. Hence, it is important to understand some nuances about RIAs.