Sebi's New Move: Empowering Investment Advisers with Fee on Second Opinion

The Securities and Exchange Board of India (Sebi) introduced a significant regulatory change on Thursday, allowing Investment Advisers (IAs) to offer a second opinion on clients' assets already under a pre-existing distribution arrangement. This move affords investors more flexibility and simplifies business processes for IAs.

Previously, Investment Advisers were prohibited from charging fees on assets overseen by another distributor. With the new circular, IAs can now impose a fee of up to 2.5% annually of the asset value for rendering a second opinion, subject to full disclosure and annual consent from the client.

This change follows requests from industry bodies who argued that the initial restrictions hindered IAs from providing valuable second-opinion services. The updated policy, which came into immediate effect, represents a responsive shift aimed at enhancing investor options and facilitating a more competitive advisory market.