So it seems that no one is willing to give mutual fund investing advice any more. Not officially anyway, as a registered investment advisor. A number of high profile entities which were registered with SEBI as investment advisors for mutual funds, have informed the customers of their advisory services that they are ceasing this activity. Two such names that I've read about are IIFL and Motilal Oswal, along with a lot of unconfirmed news that practically every large entity that was carrying out this activity is in the process of doing so.
This is a by-product of the regulator's effort to cleanly bifurcate mutual fund distributors from mutual fund advisors. The rules say that one individual or entity can either sell mutual funds or advise investors about mutual fund investments.
However, that's the industry way of looking at it. For us investors, let's examine what it means when someone approaches us and 'gets our mutual fund investments done'. Case one is when that person (or the entity employing that person) advises us as to the best funds to invest in and takes a fee from us. According to the rules, this entity then cannot have a commercial relationship with any fund company. Case two is when the entity does not charge us anything and the service is free to us. However, since this entity has to make money somewhere they will be taking the commission from the mutual funds.
It's an old saying that he who pays the piper calls the tune. One should assume that in Case One, the advisor would look after our interests while in Case Two the distributor would basically look after the fund companies' interests. So does this expectation hold true in the real world? It's complicated. Since this bifurcation was brought in by SEBI, large entities like banks and other financial services have played a double role in this story. They have advisor subsidiaries as well as distributor subsidiaries and for each customer, they take on whatever role makes them most money. The problem is that they often do both, charging money for advice and then getting the customer to buy from their distribution arms.
SEBI has now ensured that this will not happen. The rule that you can either be a distributor or an advisor will be applied at the business group level. As a result, all large financial services groups that do both businesses will exit the advisory business because the money is entirely in distribution.
Again, you will find that there is a lot of lamentation from these businesses about this. However, as investors this is a great thing for us. The so-called advice given by those who are also in the distribution business is worthless. Actually, it is worse than worthless, it is actively harmful to investors' interests. By having two entities, they were just exploiting a loophole that should not have been left open by SEBI in the first place.
At the end of the day, it was just a way of getting more money out of the pocket of richer investors. One of the enduring themes of the personal finance business is to try and convince rich people that they need some special products. The rich buy different, more expensive, more special kinds of cars, houses, clothes, gadgets, vacations, etc. Therefore, the sales pitch for personal finance products like advisory, wealth management, portfolio management is focussed on convincing rich people that they must have different, more special kinds of personal finance products.
Nothing could be further from the truth. If you have more money than the average middle-class person, you must still invest like a middle class person. These special products and services are just tricks to get more money out of you. Believe me, if you have more money than the average person, you are capable of quickly learning and becoming more knowledgeable than some salesperson who is pretending to be an advisor. All the tools and the knowledge you need is available on the web.
The only advisor you need is yourself.