The government is considering a proposal to harmonise various regulations related to investment advisors for protecting investors’ interest, a senior Finance Ministry official said here on Thursday.
“Finance Ministry will bring out an approach paper by this month-end on convergence of regulations to regulate the investment advisors engaged in selling of various financial products and advising investors,” Joint Secretary (Capital Markets) K P Krishnan, said.

Expert panel
Mr Krishnan said an expert committee was looking into the issue of regulating investment advisors. Efforts would be made to “converge the regulations” and not regulators governing these financial intermediaries, he said.
He said he was not in favour of formulating an additional legislation as it would add to the complexities. “We are making efforts to minimise the complexities, and a legislation would only add to further complexity,” he added.
Investment advisors sell products that fall under the jurisdiction of agencies such as Insurance Regulatory and Development Authority (insurance schemes), Reserve Bank of India (NBFC deposits, mortgages) and Forward Markets Commission (commodities), besides pension products, government bonds and tax consultancy, among others.
Mr Krishnan, who is also a member of the Sebi Board, said it would not be easy to bring financial advisors under one regulator, but the emphasis would be on merger of regulations and financial literacy of investors.
Official sources said the issue of regulating investment advisors is expected to be taken up in the next board meeting of Securities & Exchange Board of India (Sebi), scheduled to be held in Mumbai on June 30.
There are more than two million insurance agents also selling other financial products as well. At present, investment advisors as a separate class of intermediaries are not registered and regulated by Sebi.
Sources said Sebi is likely to allow a private sector self-financing regulatory organisation (RO) to act as a first-level regulator to deal with the large number of investment advisers in India.