After over two decades of practising as a Certified Financial Planner, one question continues to surface time and again: What is the right way to compensate a financial adviser?

Terms like financial consultant, adviser, investment adviser, and financial planner are often used interchangeably. However, the real distinction doesn’t lie in the title—it lies in the compensation model.

Let’s simplify this.

Two Broad Models of Financial Advice:

1. Brokerage-Based Advisory

This is the most prevalent model in India. Under this structure, advisers earn through commissions embedded within financial products.

At first glance, the advice appears “free.” But over time, clients may end up paying a hidden cost through:

• Product bias

• Commission-driven recommendations

• Lack of transparency

This model is widely followed by mutual fund distributors, insurance agents, real estate brokers, stock brokers, and banks. Its sheer scale—running into lakhs of intermediaries—reflects its deep-rooted acceptance.

2. Fee-Only Advisory

Formally introduced in India through the SEBI Investment Adviser Regulations, 2013, this model separates advice from commissions.

Here, clients pay advisers directly and transparently.

Advantages:

• Eliminates conflict of interest

• Aligns advice purely with client goals

Challenges:

• Requires clients to consciously pay for advice

Even today, fewer than 1,000 Registered Investment Advisers (RIAs) operate under this model—highlighting how early we are in this transition even after 13 years of SEBI guidelines.

Within Fee-Only: Two Common Structures exist. These are-

1. Percentage-Based Fees (AUM Model)

• Fees grow as assets grow

• Aligns adviser incentives with wealth creation

• Can feel expensive as portfolio size increases

2. Fixed Fees

• Transparent and predictable

• Works well for informed, self-driven clients

• May not incentivise continuous engagement

Our Approach at Naveen Rego Capital

At Naveen Rego Capital, a corporate SEBI Registered Investment Adviser, we aim to balance these trade-offs with clarity and intent.

Clear Positioning

We do not onboard brokerage-oriented clients, even though regulations permit dual models for corporate Investment Advisers like us.

Comprehensive Advisory (AUM + Planning Fee)

Designed for clients who prefer to focus on their profession, business, and family—while we manage end-to-end planning and execution.

Investment-Only Advisory(%AUM)

For clients seeking focused portfolio guidance only on investment matters without full financial planning.

Lite Advisory (%AUM at discounted prices)

Built for slightly motivated clients who are comfortable executing recommendations themselves but want regular handholding.

One-Time Consultation (Fixed Fee)

Ideal for highly informed individuals who need clarity on specific financial matters—pay only for the time and expertise required.

So, what engagement option you should opt with your financial adviser and what should be a fair compensation?

There is no universal answer. The right fee depends on:

• The complexity of your financial life

• The level of involvement you expect

• The value you place on your time

• Transparency of fee structure.

If outsourcing financial decisions allows you to focus more on your career, family, and peace of mind, then even a higher fee can be a worthwhile investment.

Because in finance—as in life—there is no such thing as a free lunch.

Note: 95% of our clients opt for an AUM-based fee, as they see it as a small price to pay for the freedom to focus on what excites them—while we take care of their entire financial life.

Do connect with me at 9845557582 or naveen@naveenrego.com for your suggestions and feedback.

Happy Financial Planning!

Naveen Julian Rego – CFP®

MD & Principal Officer

Naveen Rego Capital

SEBI Registered Investment Adviser

Reg No: INA000019211

BSE Membership ID: 2178

Date: 11-04-2026

Disclaimers:

1. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.

2. Registration granted by SEBI, membership of BSE and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

3. Financial products recommended by us which are under the jurisdiction of other regulators are beyond the scope of SEBI’s grievance mechanism.