Financial Education
Financial Adviser vs Mutual Fund Distributor: Who Does What?
By Vikas GuptaPublished Updated
Quick answer
In India, SEBI-registered investment advisers (RIAs) charge you a fee for advice, while AMFI-registered Mutual Fund Distributors earn commission from fund houses and help you invest and stay on track. Check their registration, ask how they are paid, and choose the service you actually need.
“Financial advisor” is used loosely, but in India there are legal distinctions. Knowing them helps you ask better questions. We should be clear about our own position too: Vikas Gupta is a Mutual Fund Distributor.
Who does what?
| Investment adviser (RIA) | Mutual Fund Distributor (MFD) | |
|---|---|---|
| Regulated through | SEBI registration | AMFI registration (ARN), under SEBI rules |
| Paid by | You, as a fee | Fund house, as commission on regular plans |
| Usual products | Direct plans, wider financial advice | Regular plans of mutual funds |
| Typical service | A formal financial plan and advice | Fund selection help, transactions and ongoing support |
| Your cost | Visible fee | Built into the expense ratio |
SEBI amended its Investment Adviser Regulations in July 2020, restricting distributors from describing themselves as independent advisers or wealth advisers unless registered as such. Names should reflect what the person is registered to do.
What can a good professional do for me?
- Behaviour: help you stay invested in a fall, and hold back in a mania. This is often the most valuable part.
- Clarity: turn vague goals into a simple plan with monthly numbers.
- Saving time: handle KYC, paperwork, nominations and family accounts.
- Reviews: check your progress regularly and adjust as life changes.
Do I need one at all?
Maybe not. If you are comfortable learning the basics, use the calculators and these guides, and stick to a plan on your own, you can do this yourself with direct plans. If you would otherwise delay, or tend to panic, help can more than pay for itself.
What questions should I ask?
- What is your registration number, and can I verify it?
- How exactly are you paid, and how much does it cost me?
- Will you review my portfolio, and how often?
- What will you do when markets fall 30%?
Be cautious of anyone guaranteeing returns or asking for money in a personal account. Want to talk it through? Book a call with Vikas.
Frequently asked questions
Is a mutual fund distributor the same as a financial advisor?
No. A distributor is registered with AMFI and earns commission for distributing funds. An investment adviser is registered with SEBI and charges a fee for advice. The rules restrict distributors from calling themselves independent advisers.
How much does a financial adviser cost in India?
SEBI-registered advisers charge a fixed fee or a percentage of assets, within SEBI’s limits. Distributors are paid through commission included in a regular plan’s expense ratio, so you pay indirectly.
Keep reading
Mutual fund investments are subject to market risks, read all scheme related documents carefully. Mutual fund distribution by Korlipara Vikas Gupta, AMFI-registered Mutual Fund Distributor, ARN-178652. Distributors earn commission from fund houses on regular plans. Content and calculators on this site are for education, not personalised investment advice. Illustrations use assumed returns, which are not guaranteed.