What Sebi needs to consider in its 2024 agenda
financial planning, asset allocation and execution. Presently the focus is on regulating them more and more. Some aspects of a recently proposed regulation could even be called draconian, making one wonder whether the regulator is suggesting the RIAs and RAs shut shop.
There is no point in treating all RIAs as if they are all biased and do not have client interest at heart. Perhaps, the regulator should implement existing laws fully. If RIAs, RAs and others fail to do so, penalise them.
Be tough then! On the other hand, the regulator needs to encourage new people to join the number-constrained force of RAs and RIAs. How? Think, production-linked incentive (PLI) for advisers. The Modi government has triggered a manufacturing boom in India using PLI.
Sebi could replicate that in financial services. Waive off registration fees for RAs, RIAs and others, say, for five years. There could be other benefits too.
And link PLI to performance. For instance, you lose the benefit if you get a certain number of complaints. Third, we have spent the better part of India’s reform period speeding up our trading systems and introducing all kinds of trading products.
This has had huge advantages, and disadvantages. Perhaps, we need to take a step off the accelerator and re-prioritise goals keeping in mind the retail long-term investor. This should free up a lot of resources, both time and money, to implement some of these suggestions.
And more. On the flip side, this will save a lot more people from losing their life’s savings in the options-futures casino that Indian markets have largely become. Fourth, I think some of India’s young, untested, and unproven finfluencers have more followers than Charlie Munger and Warren Buffett.
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