Every investor eventually hits the same wall: the Systematic Investment Plan (SIP) is running, the goals are vague, and the questions pile up: how much to save, where to put it, and when to change course as life evolves. Most Indians turn to two kinds of professionals for this, often without knowing there’s a difference.
One sells a mutual fund and, in the process, tells you which one to buy and why. The other charges a fee to sit on your side of the table and plan the whole picture; the fund is just one piece of it. India has plenty of the first. It has very few of the second.
That scarcity is the real story, and two Mumbai-based professionals who left the mutual fund industry around the same time show why it persists, even though both want the same thing for the investor.
Nikhil Kamat, 46, spent two decades on the sales side at DSP Mutual Fund. He turned down the head-of-sales role and a crore-plus income to strike out on his own. In July 2026, he and a colleague of 17 years at DSP set up a mutual fund distribution business, Whyte Services LLP. Kamat’s target is deliberately unglamorous: the retail investor—as he says, even someone like a chauffeur investing modest sums, too small a ticket for most advisers to bother with. “Registered Investment Advisers (RIAs) often serve those who don’t need much advice,” he says, meaning the wealthy who can afford a fee. His job, as he sees it, is to guide the rest.
Himanshu Pandya, 47, took the opposite route. A product specialist, he lost his job at Franklin Templeton India Asset Management in 2020 after the Securities and Exchange Board of India (Sebi, the capital markets regulator) barred the fund house from launching new schemes until it repaid investors trapped in its six frozen debt funds. Pandya didn’t waste time. He got his Sebi licence and started HP Private Wealth in November 2022 as a fee-only RIA, charging clients for advice rather than earning commission on what they buy. “For me it is skin in the game,” he says. “If I don’t have my own money in a product, I am not going to recommend it to my client.”
Two men, one industry, the same instinct to help investors make better decisions with their money. Yet they built different businesses to do it. That split isn’t just a career choice; it sits at the heart of why India has crores of mutual fund investors and only a few hundred licensed advisers to guide them.
Pandya’s business rests on the premise that fee-only advice is categorically different from anything a commission-paid seller can offer. Kamat counters that a good MFD’s real job is goal-based investment and hand holding. The dispute is over ‘advice,’ and who gets to offer it.
Regulation 4(d) of the Sebi (Investment Advisers) Regulations, 2013, exempts a mutual fund distributor from RIA registration for advice that is incidental to distribution. The entire dispute is about how far ‘incidental’ stretches.
The Association of Mutual Funds in India’s (Amfi) FAQs for distributors bar them from offering financial planning or holistic advice, saying only Sebi-registered RIAs may offer either. But it permits MFDs to advise on goal-based SIPs or lump-sum investments for goals, such as a child’s education or buying a house, as long as the advice remains confined to mutual fund schemes.
RIAs argue that Amfi’s line opens the door for MFDs to do what RIAs are meant to, with far less compliance.
The moment a distributor discusses a client’s retirement corpus or education fund by name, RIAs argue, it’s financial planning, whatever product wrapper it arrives in. Vivek Rege, Founder and CEO, VR Wealth Advisers, calls it diagnosis, not dispensing. “Asking questions like ‘after how many days do you need this money’ and ‘what for’ is diagnosis, not dispensing. It’s a pharmacist standing in a corner with a stethoscope,” says Rege. When those boundaries blur, he argues, the investor ends up misled about what relationship they’re actually in, advisory dressed up as distribution. Same activity, same risk, ought to mean same regulation, a principle he says is fundamental to how securities markets are meant to work.
“Nobody has a clue as to what ‘incidental advice’ really means,” says N. Raghu Kumar, 41, a Bengaluru-based RIA who started his practice in 2025, after five years as an MFD. “Let Sebi allow MFDs with required qualifications like CFP, NISM X-A or NISM X-B (exams) to do financial planning; I will surrender my RIA licence tomorrow,” he says, adding that qualification and intent matter more than the licence.
To be fair, Amfi’s FAQs aren’t silent on guardrails: it bars MFDs from calling themselves ‘financial planners’ in ads and requires mandatory risk profiling, though the interpretation of incidental advice remains a grey zone. Yet in December 2025, ARIA (the Association of Registered Investment Advisers) flagged MFDs that it said had crossed the line, after scanning websites where a client couldn’t tell an adviser from a distributor. Srikanth Bhagavat, managing director of Hexagon Capital Advisors, says his own scan of MFD websites in Bengaluru found six in 10 presenting themselves as advisers. These concerns, along with ARIA’s engagement with Sebi, led the regulator to form a working group of RIAs, MFDs, AMCs, and Amfi to re-examine the role of MFDs. The group is still deliberating. Amfi had not responded to a detailed set of questions from ET Wealth, including one on incidental advice, at the time of going to press. Kamat believes that the goal-based investment genuinely belongs to distributors within this boundary and that Amfi audits MFDs.
As per Sebi’s website, 1,039 RIAs held a valid licence as on 26 August 2026, a live count. Sebi has designated BSE as the supervisory body overseeing RIA registrations and filings; as of March-end 2026, BSE recorded 977 RIAs on its rolls, 450 individuals, and the rest corporate. Of the 73 net new RIAs added that year, just 12 were individuals, while 61 were non-individuals.
BSE does not publicly disclose RIA surrender or cancellation data, and declined to share it when asked; the figures here are BSE’s reported gross numbers, not verifiable as net of exits.
Compare that with the mutual fund distributor community, many times larger: 3.41 lakh MFDs as of 31 March 2026, up from 3.01 lakh a year earlier, as per Amfi. That’s a little inflated for comparison, since it counts ARN (Amfi Registration Number) holders— the distribution entities—as well as EUIN (Employee Unique Identification Number) holders, the relationship managers at banks and large distributors who actually interact with and advise clients.
RIAs have a rough equivalent, uncaptured in the 977 headline count: BSE separately reports 738 Persons Associated with Investment Advice (PAIA), who work inside RIA firms and deal directly with clients. That count includes only firms that filed compliance reports that year, so the actual number is likely higher. Unlike EUIN holders, a PAIA has no individual Sebi registration number, so there’s no independent way to verify who’s actually advising.
If the 2013 rules opened the door to the RIA profession, the 2020 amendment slammed a good part of it shut. In July 2020, SEBI notified the Investment Advisers (Amendment) Regulations, tightening nearly every entry and operating requirement, effective 30 September of the same year. For many individual advisers we spoke to, that date marks a clear before-and-after.
The net worth bar was raised fivefold for individual advisers to Rs.5 lakh and doubled for non-individual entities to Rs.50 lakh. Qualification norms grew stiffer too: a postgraduate degree plus five years’ experience, up from the modest 2013 bar. Sebi grandfathered (exempted) advisers already over 50; everyone else had to meet the higher bar.
Perhaps the rule RIAs complain about most is Regulation 22, mandating strict client-level segregation between advisory and distribution: an adviser’s group or family could no longer offer both to the same client. Individual advisers also hit a 150-client ceiling, beyond which they had to corporatise and absorb the higher compliance burden.
Fees were capped for the first time, too: 2.5% of AUA (assets under advice) per annum, or a flat Rs.1.25 lakh per client per annum, whichever the adviser chose.
Taken together, these changes did what they were meant to: weed out casual or under-capitalised players. But they also triggered what several advisers called a surrender wave—years when individual RIAs handing back their licences outnumbered new registrations.
A Mumbai-based MFD who surrendered his RIA licence in 2024 recalls those years as claustrophobic, thanks to Sebi’s fee caps. “Our fee ceiling was fixed by regulation, but our costs weren’t,” he says. Success became a trap: crossing the 150-client threshold meant compulsory corporate registration, and with it, annual audits and years of record-keeping. (Sebi has since raised this threshold to 300 clients, or Rs.3 crore in annual fees collected, whichever comes first, under a 2025 amendment.)
Pandya, who stayed and adapted, sums up what’s left of the fight: “The only risk in my business today is compliance, nothing else.” RIAs now face the latest salvo too: a compulsory disability-accessibility audit of their mostly static websites, at Rs.30,000-Rs.50,000 a year, a cost ET Wealth couldn’t verify.
What that actually costs in practice is easiest to see in one adviser’s own numbers. Aryan Singhal, 28, Delhi NCR-based and a Chartered Financial Analyst, spent his early career on the research side of a mutual fund before quitting in late 2024 to start his own RIA practice, choosing that route over MFD because he wanted full-fledged financial planning, not just fund recommendations. Coming from a wealthy family shaped the choice too: becoming an RIA meant he could manage his own family’s wealth while building a client base from scratch, a head start most first-year advisers don’t have.
Setting up shop cost him relatively little—between Rs.30,000 and Rs.55,000 as a one-time fee, plus a lien-marked deposit of Rs.1 lakh. The real expense begins after the licence comes through: compliance, office space, and a website cost, roughly Rs.4.2-4.8 lakh a year, before client acquisition costs. Layer on surprises like the website accessibility mandate, and it climbs further. It’s a business with a low bar to entry and a much higher, rising bar to sustain.
That cost structure is also why RIAs chase investors with big bucks, leaving smaller ones out. By Singhal’s arithmetic, the actual running costs— compliance, office, website—come to about Rs.5 lakh a year, which at the industry’s average fee of 0.75% needs roughly Rs.6-7 crore in AUA just to break even. But that ignores what he gave up: a secure salaried income of about Rs.15 lakh a year. Counting that in, the real number is closer to Rs.20 lakh, and closer to Rs.26-27 crore in AUA before the business genuinely pays him what his old job did. At an average holding of Rs.25 lakh, the kind of investor an MFD would happily take, an RIA would need over 100 such clients to cover costs, a tall order for a one-person practice.
Then there’s the challenge of recovering fees: getting clients to cut a cheque when it’s due. Sajjan Kumar, a Bengaluru-based RIA, says India isn’t yet used to paying fees directly. By his own estimate, a MFD client with a Rs.4-5 crore portfolio quietly pays 0.75-1%, roughly Rs.3-5 lakh a year, for work he reckons an RIA with 5-7 years’ experience could do for about Rs.25,000. “But the RIA client sees this fee going out from his bank account,” he says. His verdict: “To run our home as an individual RIA on just a fee basis is very difficult in India.” After seven years as a purely fee-based adviser, he plans to add an MFD arm and is eyeing a corporate licence, a PMS, and a Category III AIF (Alternative Investment Fund) in the near future.
Vikrant Gupta, Partner at Delhi-based Apricus Wealth Investment Managers, returned from Australia around five years ago to build his practice. “Barriers to entry have reduced, barriers to scale have not,” he says. “RIA as a profession is very hands-on, from understanding a client’s requirements to actual portfolio execution. When invoicing and fee collection aren’t seamless, it gets difficult to run a business.” He believes the regulator needs to allow a mechanism that lets RIAs deduct fees from the client’s corpus, more in line with how an MFD is effectively paid, if the profession is to flourish at scale.
Pandya sees the same fee gap and draws the opposite conclusion. “The most fundamental aspect of any commerce, any advice, any trade, is that the buyer knows what he pays, and the seller explicitly clarifies what the charge is,” he says. “Anything else, to my mind, is some form of deceit.” His target isn’t distribution itself, but a fee structure he sees as deliberately hazy, with MFDs reluctant to quote a rupee figure and collect it directly, instead allowing the charge to
