Investor Charter for Investment Advisers

Most rules in this paper are written for the adviser. Do this, keep that, report the other.

This one is written for the client. It sets out what an investor is entitled to expect from a SEBI-registered investment adviser. It also sets out what the investor is expected to do in return.

It is not a leaflet the adviser may hand out if he feels like it. SEBI tells the adviser where it must appear: on the website, in the office, and in the papers given to a new client.

The charter also carries two plain lists — things an investor should do, and things an investor should never do. Several of the "don'ts" describe the exact ways clients get cheated.

SEBI outlined the current requirements for Investment Advisers by circular dated 2 June 2025 (Ref. No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/80). Section 18.6.18 sets out four obligations:

1. Disclose the charter on their websites and in their offices.
2. Provide it during client on-boarding.
3. Publicly disclose client complaint data every month.
4. Detail the investor's rights and responsibilities, and the grievance redressal mechanisms available for complaints against Investment Advisers.

The complaint disclosure is the dated obligation. An IA must disclose data on complaints received against it, or issues dealt with, and their redressal, on its website and mobile application by the 7th of the succeeding month, in SEBI's specified format. The format includes monthly and annual trends of complaint disposal, and must account for complaints due to impersonation.

The dos, in the charter's own list: deal only with SEBI-registered IAs and verify the registration; pay advisory fees only through banking channels or the Centralised Fee Collection Mechanism; insist on risk profiling before advice; ask questions; assess risk, return, liquidity and safety; obtain written terms and conditions; stay vigilant; approach the authorities for redressal; inform SEBI about assured returns; and know the rights to exit, to seek clarification and to give feedback, and that a clause contravening the regulations does not bind the investor.

The don'ts: fall for stock tips or promises of exorbitant or assured returns; provide funds for investment to the IA; fall prey to luring advertisements or market rumours; decide solely on phone calls, messages or repeated calls; fall for limited-period discounts or incentives; rush into unsuitable investments; or share login credentials for trading, demat or bank accounts with the IA.

Illustrative. Sanchit registers as an individual investment adviser and takes on his first client, Ms Rao, in July.

What the charter requires of him, in order:

In September Ms Rao complains that a recommended scheme lost value. Sanchit resolves it in the same month. His disclosure by 7 October still has to show the complaint received and redressed, with the monthly trend — a resolved complaint is not an undisclosed one.

Now the other side. In November someone using Sanchit's name on a messaging app asks Ms Rao to transfer Rs 2,00,000 to a personal account for "guaranteed 4% monthly returns". Three lines of the charter answer it at once: never provide funds for investment to the IA, never act on promises of assured returns, and verify the registration. Sanchit's own monthly disclosure must separately account for complaints due to impersonation, which is how SEBI sees the pattern across advisers.

Chapter 18 (Key Regulations), section 18.6.18, between the conduct measures of 18.6.17 and the default and penalty provisions of 18.6.19 and 18.6.20. The examinable specifics are the date of the circular (2 June 2025), the three places the charter must appear, the 7th of the succeeding month disclosure deadline, and which items belong to the dos rather than the don'ts.

• This is not the stock broker charter. SEBI issues a separate Investor Charter for stock brokers, with its own circular and its own table of service timelines. The IA charter is the 2 June 2025 one and carries the complaint-disclosure rule, not the contract-note timeline.
• The 7th of the succeeding month is the disclosure date, not a redressal deadline. It is when last month's complaint data goes on the website.
• Fees go through banking channels or CeFCoM — never cash, and never as "funds for investment" handed to the adviser.
• Risk profiling comes before advice, not after the client has bought something.
• A clause in the adviser's own agreement cannot override the regulations. The charter tells the investor not to be bound by a contravening clause.
• Impersonation complaints must be accounted for in the prescribed format. That is an easy detail to drop from a list-based question.