Providing Portfolio Management Services (Non-Registered)

[puneetsinghania1980]

A broker cannot charge u something like an Amc or performance fees... A PMS and investment advisor can

 

[NJ23]

I suspect KOTAK asking for any flat fee.. Any token fees would be for SMS charges or so.... What is the price u have come across?

Some 5-700, I don't exactly recall. So, for individuals being a registered Investment Advisor is the only legal option.

 

[puneetsinghania1980]

I would say that's the best... Plus it adds to ones credibility.... One would get his own sebi registration number and I think listing on sebi website also.. On top of that u can enter into a fee agreement with the client..

 

[NJ23]

I would say that's the best... Plus it adds to ones credibility.... One would get his own sebi registration number and I think listing on sebi website also.. On top of that u can enter into a fee agreement with the client..

That's right. But, for an individual registered as an Investment Advisor, whom does the responsibility of execution of ideas lie with? The client taking the advise or the advisor?

 

[puneetsinghania1980]

The advisor can also execute under an authorization.... No issues with that....

 

[NJ23]

The advisor can also execute under an authorization.... No issues with that....

Oh! So every time you punch in a trade you have to call the client for permission and record the call. Is that it?

 

[puneetsinghania1980]

No.. A standing instruction from the client to the broker is good enough vide an authorization letter

 

[NJ23]

No.. A standing instruction from the client to the broker is good enough vide an authorization letter

That would solve the problem.

 

[gofindrahulsingh]

No.. A standing instruction from the client to the broker is good enough vide an authorization letter

Hi Puneet,

By Authorization letter you mean a Power of Attorney right? Many sub-brokers are doing this even without any kind of authorization. Just mutual consent.

I guess a POA would be the best way to proceed.

 

[puneetsinghania1980]

Hi Puneet,

By Authorization letter you mean a Power of Attorney right? Many sub-brokers are doing this even without any kind of authorization. Just mutual consent.

I guess a POA would be the best way to proceed.

Not a hard fast power of attorney... A simple authorisation in writing is fine a tually... However, a sub broker cannot do it even with a POA.. That would be non compliant. Only investment advisor registered with sebi can use this mode as there will be proper investment management agreement with the client as well.