The journey of personal finance can be challenging, but having the right guidance can make all the difference.
In India, Registered Investment Advisors (RIA) can help you make informed financial decisions and achieve your goals. We discussed RIAs and compared them with Mutual Fund Distributors (MFD) here.
But how do you find the right RIA for your specific needs?
In this post, let’s explore the process of finding an RIA in India and the steps to select the best Registered Investment Advisor (RIA) for you.
Estimated read time: 3 minutes and 49 seconds
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Buckle up. Here we go!
Who are Registered Investment Advisors (RIA)?
For starters, RIAs are individuals registered with SEBI as financial advisors.
These RIAs have a professional qualification with an experience of at least five years in the subject related to the advice being offered.
They also follow strict compliance guidelines on document management, continuous education, and fee models.
As per SEBI Investment Advisor Regulations (Amendment 2020), Registered Advisors can opt for only two fee models. One is a fixed fee, and the other is an AUM/AUA-based variable fee.
How to find a Registered Investment Advisor (RIA) in India?
As on June 27, 2023, In India, we have 1,324 RIAs only. That’s way too low for a country with such a vast population. This creates a lot of problems when finding an RIA and selecting the right one for you.
Initially, you can start by looking at the list of RIAs shared by SEBI here and check this fee-only advisors list here.
Or you can seek recommendations from trusted sources, such as friends, family, or colleagues who have had positive experiences with RIAs. Their firsthand recommendations can provide valuable insights.
Additionally, leverage online resources like personal finance blogs, forums, and social media groups dedicated to finance-related discussions.
Steps to select the best Registered Investment Advisor (RIA) for you
Step 1 – Why are you looking for a Registered Investment Advisor?
Before looking for an RIA, you need to be clear on why you are looking for a registered investment advisor.
Why do this?
Because even though RIAs specialize in comprehensive financial planning, through experience, some may focus on specific areas like retirement planning, tax optimization, or investment management.
Therefore, you should be clear on what service you require of an RIA. This will help you select the best RIA suitable for your needs.
Step 2 – Shortlisting registered investment advisors
Either from the recommendations you receive from your trusted sources or from the SEBI list, shortlist some 4-5 advisors.
Experience and expertise are key factors to consider when selecting an RIA. Look for advisors with a solid track record and a deep understanding of the markets.
Client reviews and testimonials can provide valuable insights into an RIA’s service quality and client satisfaction. You can do this by looking at their websites. Or searching for them on online forums and social media groups dedicated to finance-related discussions.
Consider your financial goals and select an RIA who can effectively cater to your specific needs. If you like to meet them in person, you can shortlist them by location.
Step 3 – Reach out to RIA for an intro call or meet
Here’s the thing. Most RIAs offer a free introductory call or in-person meeting. Reach out to the RIAs you have shortlisted.
During the meeting, share your expectations, requirements and concerns. Clear any queries you have. Try to understand their range of services. If your requirements match their services, then you can go deeper.
Step 4 – Understand their financial planning process & fee model
Before engaging with an RIA, discuss and understand their financial planning process and how they approach client interactions. Clarify the frequency and mode of communication, availability for queries and concerns, and their preferred method of keeping you updated on your financial progress.
RIAs typically charge a fee based on a percentage of the assets under their management or offer a fee-for-service model. Request a breakdown of their fees, including any additional charges, and ensure you are comfortable with the cost of their services.
Remember, cost is important, but it should not be the sole determining factor.
Step 5 – Select the right Registered Investment Advisor for you
At this point, you understand your requirements and the RIA’s services. You understand their expertise, their financial planning process and their fee model.
You can also ask the advisor for references from their existing clients. Reach out to these clients to gather firsthand feedback about their experiences. While individual reviews should not be the sole basis for decision-making, they can help you paint a picture of the advisor’s strengths and weaknesses.
Based on this information, you can select the RIA you feel is best for you. Remember, selecting the best RIA for you is a personalized process. It’s necessary to choose an advisor who understands your unique needs and can guide you through the complexities of personal finance.
If you are not satisfied, you can restart the entire process again and shortlist a new set of advisors.
All these steps may feel daunting to you for now. But finding the right Registered Investment Advisor (RIA) for you is a vital step toward achieving your financial goals.
The right advisor who is responsive, accessible, and willing to educate you about financial matters can significantly contribute to your financial journey.
We hope this post has provided you with valuable insights.
Remember to share these insights with your buddies.
Still Curious?
If you are like us, who likes to analyse a little more or check out content in different formats, well you are in luck. Below you can find some suitable content we found.
Subramoney – Selecting an Adviser – MFD, or RIA – the process that works
Forbes – How To Choose A Financial Advisor
Note: We don’t have any affiliation with them. We are sharing links only for educational purposes. The opinions expressed by them belong solely to them and do not reflect the views of Vrid.