How to Choose a Financial Advisor in India

If you’ve ever wondered how to choose financial advisor in India, you’re not alone. A survey by 1 Finance found that 47% of respondents believed that regular financial planning sessions would be beneficial for their future. This shows that people are starting to understand the importance of financial planning—but many still don’t know where to start. This article will help you answer exactly that. We’ll break down how to choose financial advisor in India—what to look for, what to avoid, and how to ensure the person guiding your money is truly on your side.

Who is a financial advisor?

A financial advisor is a certified professional who helps individuals manage their finances.

Unlike product-selling agents, a true financial advisor works in the client’s best interest rather than earning commissions on product sales.

In fact: SEBI has clearly stated this for their advisors that all Registered Investment Advisors (RIAs) must provide conflict-free, fee-only advice to protect investors.

“An IA is also required to disclose to the client any actual or potential conflicts of interest arising from any connection to or association with any issuer of products/ securities, including any material information or facts that might compromise its objectivity or independence in the carrying on of investment advisory services.”

A financial advisor’s role varies based on a client’s needs, but generally includes:

• Understanding your financial situation
• Building a customised plan
• Ongoing monitoring & adjustments

Importance of Financial Advisor

For years, financial planning in India has been misunderstood. People often turn to relationship managers (RMs), bank executives, insurance agents, Mutual fund distributors, or even Chartered Accountants (CAs) for advice, assuming they are financial planners.

But the reality is, most of them are focused on selling financial products rather than offering genuine, unbiased financial advice. Most of them are not even educated about the products they are selling.

For instance, 1 Finance Magazine survey tested Bank RMs’ financial knowledge. The results were obnoxious:

• 85.29% didn’t know the difference between direct and regular mutual funds.
• 75.49% preferred ULIPs over direct mutual funds, ignoring costs and returns.
• 98.04% couldn’t differentiate between nominal and real returns.
• 75.00% were unaware of ELSS tax benefits.

If RMs lack basic financial knowledge, can they really offer the right advice? Most people never get real financial advice. Worse, they aren’t just misled. They are mis-sold.

A study by 1 Finance Magazine found that 57.56% of Bank RMS agreed that they have mis-sold a financial product at some point.

In such cases, where it is often cited that only 27% of Indian adults are  financially literate, and are also exposed to rampant mis-selling of financial products, where does the average Indian turn for financial advice? How does one identify qualified financial guidance from sales-driven recommendations?

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How to choose a Financial advisor in India?

Identify your personal finance needs 

Choosing a financial advisor in India starts with being brutally honest about what you actually need help with, instead of what the industry wants to sell you. Are you looking for a one-time roadmap for your goals, or do you want a financial advisor to walk with you for the next 20–30 years of your financial life?

List your goals—retirement age and lifestyle, kids’ education, home purchase or upgrade, major loans, and any big life events you are planning for.

Check what type of financial advisor they are

Once your own needs are clear, it becomes much easier to make sense of the different types of “advisors” in the Indian market. On one side, there are SEBI-registered Investment Advisors (RIAs), who are meant to be advice-first professionals and can work on a fee-only model.

On the other side are mutual fund distributors, insurance agents, relationship managers and wealth managers, who primarily sell products and earn commissions. Banks and fintech apps often blur this line by calling everyone a “wealth manager” or “advisor,” but the real question you should ask is: “Are you registered as an Investment Advisor with SEBI, and how exactly do you get paid?”

When you understand that a distributor is paid by the product manufacturer, and an advisor is paid by you, you immediately see whose interests are likely to come first.

Qualifications of financial advisors

• Certified Financial Planner (CFP) – Covers investments, taxation, retirement, and estate planning, ensuring a holistic understanding of financial management.
• Chartered Financial Analyst (CFA) – Focuses on investment strategies, risk assessment, and portfolio management.
• SEBI-Registered Investment Advisor (RIA) – Legally obligated to act in the client’s best interest in India.

Understand the fee structure of financial advisor

Fee structure is where a lot of confusion and mis-selling hides, so it deserves a straightforward, no-jargon look. In India, genuine advisors usually work on a flat annual fee or a percentage of assets under advice (AUA), sometimes with an hourly component for extra work

• Fixed fee: You pay a set amount upfront or annually for the advisor’s services. This keeps costs clear and reduces conflicts of interest.
• Percentage of assets under management (AUM): The advisor charges a fee based on a percentage of your investment value. This means they benefit when your portfolio grows, which can encourage them to actively manage your investments.
• Commission-based: The advisor earns money when they sell you financial products. This could lead them to recommend products with higher commissions, which might increase your costs, so it’s important to be cautious.

Check your financial advisor’s way of advising 

Beyond fees and labels, you also want to understand how the advisor actually works and whether that fits your temperament. In your first conversation, notice whether they ask a lot of questions about your life, goals, and fears, or jump straight into product pitches and return numbers.

A solid advisor will talk more about asset allocation, risk management, emergency funds, insurance adequacy, and behaviour in market crashes than about the “next multibagger.” Ask them to walk you through their process: how they collect data, build your plan, recommend products, help you implement, and review things over time.

Clarify how often you will interact—once a year, twice a year, or more frequently during volatile periods—and through what channels: in-person, video calls, or email/WhatsApp. Also make sure your money stays in your own accounts and demat, with you retaining full control; no genuine advisor needs your login credentials or wants funds transferred to their personal account.

Check your financial advisor’s background

Finally, take your time to do some basic background checks. Look up their SEBI registration if they call themselves an investment advisor, glance through their website or LinkedIn, and see whether their content and communication style resonate with you. Ask for references or testimonials, and pay more attention to how they respond to tough questions than to polished marketing material.

If someone guarantees returns, pressures you to decide “today only,” dodges questions about conflicts of interest, or seems more excited about a particular product than about your long-term plan, that is usually your cue to walk away. The right financial advisor will feel like a coach and partner who respects your intelligence, simplifies complexity without talking down to you, and is willing to say “no” to unnecessary products.

Questions to ask before choosing a financial advisor in India

• Do they push products from a specific financial institution or only suggest investments from their affiliated firms?
• Are they transparent about commissions, trail fees, or incentives they receive for recommending certain products?
• Do they recommend regular (commission-based) mutual funds over direct mutual funds?
• Do they prioritise low-cost index funds or high-fee actively managed mutual funds?

Recommendation for choosing a financial advisor in India

• Only work with SEBI-registered investment advisor as they are obliged to work in client’s best interest.
• Opting for a fee-only planner is likely to yield more transparent, unbiased, and effective financial guidance.

Finding the right financial advisor in India

Key takeaways

• Personal Finance Advisors (RIAs) offer the most unbiased and holistic financial planning.
• Mutual fund brokers and insurance agents earn commissions, which may lead to biased recommendations.
• Bank RMs often have sales targets, meaning their recommendations may not always prioritise your financial well-being.

Conclusion

Choosing the right financial advisor in India means selecting a SEBI-registered RIA who delivers unbiased, fee-only guidance aligned with your goals, avoiding commission-driven mis-selling rampant among RMs and agents, where 57% admit to product pushes. Verify their process, SEBI status, and direct fund preferences to secure your financial future—book a free consultation today