Before You Sign a SEBI RIA Agreement: A Simple Checklist and 9 Red Flags

Most investors treat their advisor's agreement like app terms and conditions scroll, click, forget.

With a SEBI-registered Investment Adviser (RIA), that agreement is not just legal fine print. It is the blueprint of your relationship with an independent financial advisor in India.

Here is a simple checklist to review it and nine red flags that should make you pause.

This is Part 3 of a 3-part series on SEBI RIA agreements. Part 1: Why a SEBI RIA Agreement Is Non-Negotiable Part 2: SEBI's 15 Mandatory Clauses Explained Simply

Step 1: Confirm the Basics

Before anything else, check:

• SEBI registration number it should begin with INA and match

what you see on SEBI's intermediary portal

• Your name and details correctly spelt, correct PAN and contact

information

• Fee model clearly marked as either fixed fee or AUA-based
• Start date and term when the engagement begins and how long

it runs

If any of this is missing or incorrect, ask for a corrected draft before signing.

Step 2: Understand What You're Paying and Getting

Look for a section that clearly explains:

• The exact fee amount or percentage, billing frequency, and

applicable taxes

• Whether there are caps for regular clients, fixed fees are

capped at ₹1.51 lakh per family per year; AUA-based fees are capped at 2.5% per annum.

• What services are included financial planning, portfolio

review, ongoing monitoring, access to the advisor

If you cannot summarise in one sentence what you are paying for, there is a clarity problem.

Step 3: Find the Exit Door

Every agreement should explain:

• How you can terminate notice period and mode (email, portal,

signed letter)

• What happens to fees proportional refund for the remaining

period, and any breakage fee (up to one quarter)

• How reports and data will be shared after termination

If you only see how to enter the relationship and nothing about how to leave it, push back.

Step 4: Check Grievance and Escalation Paths

Look for a clear three-step path:

1. Internal grievance officer contact details 2. SEBI SCORES portal 3. SMART ODR for online dispute resolution

These aren't marketing lines — they are your regulatory rights.

1. No SEBI registration number on the agreement — verify any advisor at SEBI's intermediary portal or follow our step-by-step verification guide

2. Guaranteed or assured returns mentioned anywhere

3. Cash payments requested for fees

4. Fee model unclear no mention of fixed vs AUA or how much you pay

5. Blanket execution authority advisor is allowed to trade without your explicit consent

6. No termination and refund clause

7. No grievance redressal or SEBI SCORES mention

8. Advisor asks for login credentials or OTPs

9. You are not given time to read or ask questions

Any one of these should slow you down. Several together are a strong sign to walk away. For more warning signs, read our post on red flags your financial advisor isn't actually SEBI registered.

Questions Worth Asking Your Advisor

Before signing, ask:

• "Can you walk me through how your fee compares under fixed vs AUA for my portfolio size?"
• "What exactly will you do for me in the first 90 days?"
• "If I'm unhappy after six months, how do I exit and what gets refunded?"
• "If there is a complaint, who is my first point of contact and what is the next step if it isn't resolved?"

You are not being difficult. You are doing basic due diligence — exactly what a good financial advisor in Delhi NCR should expect and welcome from you.

At PI DELTA, we encourage clients to read, question, and understand our agreement before signing. View our SEBI disclosures or schedule a 20-minute clarity call to walk through our process before deciding.

Prakhar Soni, CFA | CIPM | FRM | Founder, Pi Delta