A stocks screener helps investors filter stocks based on financial metrics, making it easier to identify top gainers in the market. However, while stock selection is crucial, choosing the right investment advisory firm is just as important. SEBI (Securities and Exchange Board of India) plays a vital role in regulating investment advisory services, ensuring that investors receive professional and ethical financial advice. SEBI registration is mandatory for firms offering investment advisory services, as it establishes credibility, promotes transparency, and protects investors from fraudulent practices.
Investment advisory firms registered with SEBI must meet stringent eligibility criteria, including educational qualifications, financial expertise, and ethical conduct. These firms must comply with SEBI’s Investment Advisers Regulations, 2013, ensuring that their recommendations are backed by thorough research and tailored to individual investor needs. SEBI-registered advisors are required to adopt a fee-based model, which means they charge clients directly for their services rather than earning commissions from financial product providers. This eliminates potential conflicts of interest and ensures that the advice given is unbiased and in the investor’s best interest.
Unregistered investment advisory firms, on the other hand, operate without any regulatory oversight. Many of them lure investors with exaggerated claims of high returns, often providing stock tips via social media, WhatsApp, or SMS. These firms do not adhere to SEBI guidelines, making them risky for investors. Since they are not accountable to any regulatory authority, they may engage in misleading practices, such as promoting stocks without proper analysis or guaranteeing unrealistic profits. Investors who rely on such firms face the risk of financial losses with no legal recourse.
SEBI registration ensures transparency in investment advisory services. Registered firms must disclose all fees, commissions, and conflicts of interest to clients, allowing investors to make informed decisions. Additionally, SEBI mandates that investment advisors conduct risk profiling before recommending stocks or investment strategies. This process helps advisors tailor their recommendations based on an investor’s financial goals, risk appetite, and time horizon.
Another key benefit of SEBI registration is investor protection. If an investor faces any issues with a SEBI-registered advisory firm, they have the right to file complaints with SEBI, which has the authority to take action against fraudulent practices. In contrast, investors dealing with unregistered firms have no regulatory body to turn to in case of disputes or financial losses.
Before engaging with any investment advisory firm, investors should verify its SEBI registration through SEBI’s official website. This simple step ensures that they are dealing with a legitimate and trustworthy advisor. Investors should also avoid firms that promise guaranteed returns, as no investment is entirely risk-free.
Using a stocks screener to track top gainers is a valuable strategy, but it should be complemented by professional financial advice from a SEBI-registered investment advisory firm. Registration with SEBI guarantees compliance with industry regulations, ethical practices, and investor-first policies. By choosing a SEBI-registered advisor, investors can ensure transparency, mitigate risks, and make informed investment decisions, leading to long-term financial growth.