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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Key Regulations

Under the SEBI Investment Advisers Regulations, an individual investment adviser who offers advice on a fee basis can charge fees on which basis, subject to the prescribed limits?

An investment adviser may charge either a fixed fee or a fee based on assets under advice, choosing one mode for a given client, within prescribed ceilings. Profit-linked fees or commissions from product manufacturers are not permitted because they create conflicts of interest.

  1. AEither fixed fee or assets-under-advice (AUA) basis, but not both for the same clientCorrect
  2. BPercentage of profits earned by the client
  3. CBoth a fixed fee and a performance-linked fee simultaneously
  4. DCommission from product manufacturers for the products recommended

Explanation

The regulations permit fees either on a fixed fee basis or on an AUA basis, and the adviser must choose one mode per client. Profit-sharing and commissions from product providers are not allowed for advisers, since they create conflicts of interest.

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