Funding advisors can’t settle for powers of legal professional from shoppers: Sebi

In a letter to Waterfield Advisors, a Sebi-registered investment advisory firm for high net worth individuals, Sebi issued guidelines denying the ability of investment advisors to accept power of attorney (PoA) from clients. Under the Sebi Rules, Investment Advisers can provide implementation services but not charge fees for them. Waterfield asked if a PoA could be part of such implementation services. The letter was issued on March 30, 2021 and uploaded to the Sebi website on July 2, 2021.

In his letter to Sebi asking for advice, Waterfield had asked if a PoA could be requested to collect information from custodians about account balances, transaction details and other information from customers, or to transmit information to and with custodians Connect. However, Sebi categorically refused the option of taking such a PoA. “An investment advisor is obliged to give his clients investment advice and is not allowed to manage funds or securities on behalf of the client,” says the Sebi guideline. “A PoA approval is neither intended nor desirable for an investment advisor,” she added afterwards.

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