A SEBI-registered investment adviser may charge an individual client either a fixed fee of up to ₹1,51,000 a year per family or up to 2.5% a year of the assets advised on, plus GST if the adviser is registered for it, and may not earn commission on the products advised. Within those caps the advisory fee is whatever adviser and client agree in writing.
How do the two fee modes work?
SEBI calls them investment advisers; most people say SEBI RIA. Under SEBI's rules of January 2025, restated in February 2026, an adviser charges in one of two modes:
- Assets under advice (AUA) mode: at most 2.5% a year of the value advised on.
- Fixed fee mode: at most ₹1,51,000 a year (raised from ₹1,25,000 in January 2025).
Both limits are per family of client: you, plus a dependent spouse, children and parents, count as one client. The mode can change at any time, but a year's fee may not exceed the higher of the two limits. The limits exclude statutory charges, so GST at 18% comes on top from an adviser registered for GST, which is required once turnover passes ₹20 lakh a year in most states. BSE, which supervises advisers for SEBI, revises the fixed-fee limit once every three years using the Cost Inflation Index, after consulting SEBI.
The limits protect individual and HUF clients only. An accredited investor, a status for people with very high income or net worth, and any company client negotiate fees freely. The limits also cover only advice on securities SEBI regulates, such as shares, bonds and mutual funds; advice on insurance or property is outside them.
No advice or fee may come before you sign an agreement carrying SEBI's mandatory terms, and the fee goes by cheque, bank transfer or UPI to the adviser's account, never in cash.
Is Hemant's ₹40,000 on ₹50 lakh within the rules?
Hemant earns ₹45 lakh CTC and holds ₹50,00,000 in mutual funds and shares. An adviser quotes ₹40,000 a year.
- Fee as a share of the portfolio: ₹40,000 ÷ ₹50,00,000 = 0.8%.
- AUA cap: 2.5% of ₹50,00,000 = ₹1,25,000.
- Fixed-fee cap: ₹1,51,000.
- With 18% GST, if charged: ₹40,000 + ₹7,200 = ₹47,200, about 0.94%.
The quote sits well inside both caps. Any fixed deposits he holds fall outside the assets under advice and cannot raise the AUA cap.
He may pay the year upfront: SEBI allows up to one year's fee in advance if the client agrees. If he leaves after four months, eight months are unexpired: ₹26,667. The adviser may keep a breakage fee of at most one quarter's fee, ₹10,000, so at least ₹16,667 comes back.
How do the caps compare at other portfolio sizes?
The caps cross at ₹60,40,000: below it the fixed-fee cap is the higher one, above it the AUA cap.
| Assets advised | 2.5% AUA cap | Fixed-fee cap | Most allowed a year | A ₹40,000 fee as a share |
|---|---|---|---|---|
| ₹25 lakh | ₹62,500 | ₹1,51,000 | ₹1,51,000 (6.0%) | 1.6% |
| ₹50 lakh | ₹1,25,000 | ₹1,51,000 | ₹1,51,000 (3.0%) | 0.8% |
| ₹1 crore | ₹2,50,000 | ₹1,51,000 | ₹2,50,000 (2.5%) | 0.4% |
| ₹2 crore | ₹5,00,000 | ₹1,51,000 | ₹5,00,000 (2.5%) | 0.2% |
A cap is a ceiling, not a price guide: on ₹25 lakh, a fixed fee may legally take 6% a year. Compare the advisory fee with what a regular plan already pays its distributor; trail commission finds those rupees in your Consolidated Account Statement (CAS).
Can an adviser also earn commission?
Not from a client they advise, which is what makes a SEBI RIA a fee-only financial adviser. An individual adviser may not provide distribution services, and the adviser's spouse, children and parents may not distribute to the adviser's clients. An advisory firm's group may serve each client as adviser or as distributor, never both. Help with buying carries no commission or referral fee, and advisers use direct plans wherever they exist.
One gap to ask about: a part-time adviser may also hold another licence, and SEBI's January 2025 guidelines name an IRDAI-licensed insurance agent as eligible. SEBI requires the advice to be kept separate and the other work disclosed, but insurance commission is outside SEBI's rules. Individual agents averaged 27% of first-year premium on life insurance in FY 2024-25 (how insurance commission works), so ask whether your adviser sells insurance too, and get the answer in writing.
A distributor may not use the title independent financial adviser or wealth adviser without registering as an adviser, and a bank relationship manager is paid as a seller; why your bank RM keeps selling insurance covers that channel.
How do you check a SEBI registration before paying?
An RIA registration check takes a few minutes. SEBI's list of registered investment advisers held 1,050 entries in October 2026, each with a name, registration number, address and validity date. The number reads INA followed by nine digits, and should match the agreement, invoice and website. Every adviser must also be enlisted with BSE.
A complaint goes to the adviser first, who must resolve it within 21 days. Next comes SCORES 2.0, where BSE reviews the complaint first and SEBI second, and after that SEBI's online dispute resolution platform for conciliation or arbitration.
Dhi looks at your cash flow, net worth, protection and goals together, and maps the investments you hold to your goals. Dhi answers questions from your own numbers, such as what a quoted fee is as a share of your portfolio, and never mis-sells.
Frequently asked questions
This is general information for salaried individuals in India, not personalised financial advice.
