Commission-driven Recommendations

India has fewer than 1,000 SEBI-registered Investment Advisers. It has over 61 lakh people licensed to sell you a financial product on commission — 31.23 lakh insurance agents, 27.18 lakh Point-of-Sale Persons, 2.75 lakh mutual fund distributors.

Why the gap? History.

Before 2013, there was no RIA category in India. Nobody was required to separate selling from advising. The person who sold you a policy also called himself your advisor, your consultant, your wealth manager. Nothing stopped him.

Then SEBI drew a line. The Investment Advisers Regulations, 2013 said: if you earn commission on what you sell, you cannot call yourself an advisor. Only a registered, fee-only adviser can use that word now.

Here's what didn't change: the people. The same 61 lakh professionals who were selling products before 2013 are selling the same products, the same way, in 2026. The financial industry has adapted to this change and knows this. What hasn't caught up is you.

Ask ten investors if their "financial advisor" earns commission on what he sells them. Most will say no. Or won't know. That's not their fault. For decades, the person across the table WAS an advisor. The title stayed. The role underneath it changed. Nobody said so out loud.

That's the real reason fee-only advisers number under 1,000 in a country of 20 crore-plus investors. The model didn't fail. Most people never realised the role in front of them had shifted.

Here's the test that cuts through it.

Take a child's education fund as the goal. Two products can meet it.

A traditional child insurance plan. Debt-heavy allocation. Commission on the first premium: 25% to 65%, industry-wide.

An equity-oriented option — a ULIP or a mutual fund SIP. Commission: a fraction of that.

The 6% CAGR a traditional plan delivers isn't a performance failure. It's asset allocation — the money sits in debt, by design. The 10% an equity-oriented option delivers isn't luck either. It's equity allocation, participating in company growth over 15 years.

Same child. Same goal. Same 15 years. ₹1.25 lakh apart.

Now ask the real question.

If the traditional plan pays the seller far more commission than the equity-oriented one, which do you think gets recommended at the counter?

The parent isn't choosing between "safe" and "risky." He's being made to choose between what earns the seller more and what actually builds the fund. Nobody tells him there's a difference.

The next time someone calls himself your financial advisor, ask one question: are you SEBI-registered as an Investment Adviser, or are you selling me a product on commission? The answer sorts the room instantly.