Giving advice about investments is a regulated activity in India. Yet a flood of tips arrives every day through WhatsApp groups, Telegram channels and short videos, and much of it comes from people with no registration at all. Some are well-meaning, and some are running scams. The skill worth learning is telling them apart before you move any money.
Who is who
| Role | What they may do | How they're paid |
|---|---|---|
| Investment Adviser (RIA) | Give personalised investment advice. Registered with SEBI; registration numbers begin with INA. | Fees paid by you, not commissions from products |
| Research Analyst (RA) | Publish research and recommendations. Registered with SEBI; numbers begin with INH. | Subscription or fees |
| Mutual fund distributor | Sell mutual funds. Holds an AMFI registration number (ARN). | Commission from the fund house, built into regular plans |
| Stock broker | Execute your trades. Registered with SEBI. | Brokerage and other charges |
| Insurance agent or broker | Sell insurance. Licensed by IRDAI. | Commission from the insurer |
None of these roles is bad by definition. The problem arises when someone in one role pretends to be another, for example a commission-earning seller presenting themselves as an independent adviser.
A five-minute check
- Ask for the registration number. A genuine adviser or analyst will give it immediately.
- Look it up yourself. SEBI's website lists registered intermediaries and lets you search by name or number. Check that the name, the registration category and the validity all match what you were told.
- Check the contact details. Make sure the phone number, email and website are the ones on the register.
- Ask how they are paid. If the answer is vague, assume a commission is involved and ask what it is.
- Ask for a written agreement and a risk profile. Registered advisers are expected to assess your risk profile and give advice that suits it.
Red flags that should end the conversation
- Guaranteed or "assured" returns. Market-linked investments can't be guaranteed, and regulated advisers can't promise them.
- Pressure to act today. "Offer closes tonight", "only a few seats left".
- Requests to send money to a personal account, a wallet or an unknown company, instead of paying through your own broker or fund account.
- Tips from strangers in a group, particularly if a "senior analyst" invites you to a private channel, or shows screenshots of profits.
- Asking you to hand over your login details or OTP, or to open an account on an app you've never heard of.
- Promising to recover your earlier losses for an upfront fee.
- Trading apps and websites that you're sent through links rather than the official app stores.
Finfluencers and free advice
Many people who talk about money online are entertaining, informed and honest. Some are neither. SEBI has taken action against unregistered people giving specific buy-and-sell recommendations, and has restricted the relationship between registered entities and influencers. When you watch a video, ask what the speaker gains: affiliate links, referrals, a course, or a stake in what's being promoted. "Not investment advice" in the caption doesn't change what the content does.
Choosing between types of help
If you want a one-time plan, a fee-only adviser who charges a flat amount can be a good fit. If you prefer ongoing handholding, a distributor can be convenient, so long as you understand that regular plans carry the cost of their service. If you're comfortable choosing for yourself, direct plans through a fund house or an app cut out that layer entirely. The right answer depends on you. What matters is knowing which model you're in.
If you've been cheated
- Stop sending money and keep every message, receipt, bank statement and screenshot.
- Contact your bank at once if you made a transfer. Early reporting can sometimes help.
- Report online fraud on the national cybercrime portal (cybercrime.gov.in) or by calling the helpline 1930.
- Complain against registered entities through SEBI's SCORES platform. For insurers, use IRDAI's complaint system; for banks, the RBI ombudsman scheme.
Be wary of anyone who contacts you afterwards offering to "recover" your money for a fee. That is usually a second scam.
Regulations, registration formats and complaint channels are updated from time to time. Verify details on sebi.gov.in, amfiindia.com, irdai.gov.in and rbi.org.in before relying on them.
This article is for general education and is not personal advice. Found a mistake or an out-of-date number? Tell us and we will check it.