Lesson 18 of 50 for advisers · Rebalancing talk, within the rules · 4 min read · Reviewed 13 Nov 2026
Basic advice on mutual fund schemes, incidental to selling them. SEBI’s FAQ limits a distributor to the mutual funds it distributes; advice on shares, bonds, AIFs, REITs or InvITs needs investment adviser registration. The riskometer, with six levels from Low to Very High and updated monthly, is the shared language for a scheme’s risk.
A distributor may give advice incidental to selling. SEBI’s FAQ calls it basic advice on mutual fund schemes, limited to the schemes it distributes.
Advice on shares, bonds, AIFs, REITs, InvITs and similar products needs registration as an investment adviser.
Every scheme carries a riskometer with six levels: Low, Low to Moderate, Moderate, Moderately High, High and Very High. It is reviewed monthly, and a change is sent to unitholders.
The product label states the scheme’s nature, a one-line objective and the riskometer. Wherever performance is shown against the benchmark, the benchmark’s riskometer appears too.
Key idea: Showing a client how far their mix has drifted is arithmetic; recommending a share or bond to fix it is advice.
Try the short quiz on this page to check what stuck.
No. SEBI says it is not a change in fundamental attributes.
With the monthly portfolio, within 10 calendar days of month-end. Each 31 March fund houses also disclose how often each scheme’s level changed.
No. An individual adviser may not distribute at all, and a firm keeps the two apart client by client.
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