Lesson 3 of 50 for advisers · Advice and distribution, kept apart · 4 min read · Reviewed 13 Nov 2026
No. An individual adviser may not distribute at all, and the adviser’s family may not distribute to the adviser’s clients. A firm must choose per client: advice with no commission anywhere in its group, or distribution with no advisory fee. A client’s family counts as one client.
An individual investment adviser may not distribute products. The adviser’s spouse, children and parents may not distribute to the adviser’s clients.
A firm that advises keeps the two apart client by client across its group. A client takes advice, with no commission earned anywhere in the group, or distribution, with no advisory fee.
PAN is the record that ties it together, and a client with a dependent spouse, children and parents counts as one family. Existing holdings need not be sold, and advisers recommend direct plans where they exist.
Since 30 Oct 2025 an adviser may give a second opinion on assets held through another distributor. The fee is capped at 2.5% a year of those assets, with the client’s consent each year.
Key idea: One client, one model: advice for a fee or distribution for commission, never both.
Try the short quiz on this page to check what stuck.
Advisers serving only institutional clients and accredited investors, when the client signs a waiver.
No. SEBI’s master circular says stock broking is not distribution for this rule.
When clients exceed 300 at any time, or fees in a year exceed ₹3 crore. The in-principle application is due within 3 months.
For learning only, not investment advice. Built in India by a team that tracks its own money on Reva.