The requirements for education, experience and net worth had stopped many from joining the field.
“This will be a big hiring impetus and a lot more advisors can now come up. The profession is only a decade old and these norms will increase its space to grow,” said Vishal Dhawan, founder and chief executive officer of Plan Ahead Wealth Advisors Pvt.
“The number of IAs/RAs today is not commensurate with the large investor base and the ratio of investment advisers per million population is very low as compared to a jurisdiction such as the United States of America,” the paper stated.
A lower number of investment advisors being acknowledged and measures being taken to improve this is a good step, according to Dhawan.
The constant requirement for the NISM exam had the potential to put an advisor’s business in jeopardy. The new norms will more efficiently ensure that the advisors are aware of the changes, according to Dhawan.
The lower threshold in the form of a deposit rather than the net worth will now allow easier access for people starting off.
“This will help individual advisors move to non-individual advisors,” he said. This means that the access will give them the space to step into the profession and also hire more people.
Under the Association of Registered Investment Advisors, or ARIA, there are over 900 registered advisors working with a 10-member board heading the association.
The association has a 70:30 ratio of individual advisors to non-individual advisors, according to Dhawan. Easier access to the profession will further encourage advisors to hire more people as well.
“This is a positive move, as individual advisors had more restrictions and those are done away with. These norms will expand the market as they have made it easier for someone to become an investment advisor,” said Lovaii Navlakhi, chairperson of ARIA and chief executive officer of International Money Matters.
