SEBI Cautions Public Against Unregistered Investment Advisors
The Securities and Exchange Board of India on Thursday cautioned investors against exorbitant or assured returns. It requested the public to deal with only registered investment advisors and pay advisory fees through banking channels only.
The move comes in the wake of several instances where investors were lured by false trading tips.
The regulator asked investors to ensure that investment advisers produce valid registration certificate.
It also asked investors to assess the risk-return profile of the investment as well as the liquidity and safety aspects before making investments.
“Pay only advisory fees to your investment adviser,” the regulator noted. “Make payments of advisory fees through banking channels only and maintain duly signed receipts mentioning the details of your payments.”
Besides, it has asked investors not to fall for the promise of exorbitant or assured returns by investment advisors and “do not let greed overcome rational investment decisions and do not get carried away by luring advertisements or market rumours”.
It asked the people to avoid transactions only on the basis of phone calls or messages from any investment advisor or its representatives. The regulator warned the public against dealing with unregistered entities and to not fall for stock tips offered under the pretext of investment advice.
"Be vigilant in your transactions. Insist on getting the terms and conditions in writing duly signed and stamped,” SEBI noted. “Read these terms and conditions carefully, particularly regarding advisory fees, advisory plans, category of recommendations etc. before dealing with any investment adviser."
The regulator has asked investors to approach the appropriate authorities for grievance redressal and also inform it about any investment advisors offering assured or guaranteed returns.