Agents who sell financial products such as mutual funds, insurance policy and pension products might no longer be able to offer complex and evolved financial products on their own. That is, if the Securities and Exchange Board of India (SEBI) agrees to the suggestions of Financial Planning Standards Board of India (FPSB).
“Some financial products are evolved in nature and should be prescribed by a person having proper understanding of the product and the requirement of the investors, just like in the field of medicine where some drugs are sold only on the prescription of a doctor,” said Ranjeet Mudholkar, vice-chairman and chief executive officer, FPSB – a professional standards setting body for financial planners. “Financial products will get more evolved going forward due to the growth in Indian economy.”
The suggestion is from among one of the comments of FPSB on the SEBI’s concept paper on regulation of investment advisors.
In September, the capital market regulator had released concept paper on regulation of investment advisors in which it proposed that entities (including banks and fund managers) and persons who act as investment advisors would have to be registered with an self-regulatory organisation (SRO) and invited comments and feedback from the stakeholders. FPSB submitted its comments on this recently.
In its feedback, FPSB has also favoured rating of entities and institutions by professional organisations, which would reflect their competency level.