Difference between Fiduciary Standards and Suitability Standards ?
Introduction
SEBI Registered Investment advisers (RIA) are always duty bound by a
fiduciary standard that always places clients’ interests ahead of their own. As SEBI RIA, whatever we think and do, it’s driven by sole intent to add value in your Portfolio. SEBI RIA can not accept commission for the financial product they advice.
Mutual Fund Distributors, Brokers and dealers work on a suitability standard, which means that transactions and products must be suitable for clients’ needs. They are not bound to keep your interests ahead of their own. They are free to accept as much commissions if the client buys that financial product from them. We feel, that in this arrangement, a clear conflict of interest arises and client’s financial well being is compromised.
- "Risk comes from not knowing what you're doing" - Warren Buffett
Key Benefits Of This Service
1. Fiduciaries - SEBI RIA’s have to always work as client’s fiduciaries.
2. Compliant - SEBI RIA’s are subject to stringent compliances and annual audits.
3. Highly Educated Advisors - SEBI RIA’s are subject to much higher Educational Qualifications with a Minimum Master’s degree along with having cleared NISM Investment Advisory Exams Level 1 and Level 2
4. Highly experienced - SEBI RIAs must have at least have 5 years of relevant Work Experience, before they are granted registration as an Investment Advisor by SEBI.
5. Alignment of interests - Since your advisor does not accept commissions for the recommended financial product, you rest in peace that your interests are truly aligned.