What does a financial planner cost in India? Fee-only vs commission
Short answer. You always pay — either a visible fee or a commission built into the product. A SEBI-registered investment adviser bills you directly, within caps of ₹1,51,000 a year per family (fixed fee) or 2.5% of assets under advice. A distributor or agent is paid by the product maker, out of your money. Verify any adviser on SEBI's website before you pay.
Disclosure. Astra Wealthcraft LLP is not yet registered with SEBI. We intend to apply; until registration is granted we do not give investment advice. Use the checks in this article on us too.
How much does a financial planner cost — and who pays?
In India the answer depends on which kind of professional you are talking to. The title on the visiting card — wealth manager, relationship manager, financial planner — tells you little. The registration tells you how they are paid.
| Who you meet | Registration to ask for | Who pays them | How |
|---|---|---|---|
| Mutual fund distributor (many banks and platforms included) | ARN, issued by AMFI | The fund house | Trail commission every year, built into the regular plan's expense ratio |
| Insurance agent or broker | Agency code from the insurer; IRDAI registration for a broker | The insurer | Commission out of your premium, usually highest in the first year |
| SEBI-registered investment adviser (RIA) | INA number, issued by SEBI | You | A fee agreed in writing; no commission from products |
Are financial planners free?
No. If nobody sends you an invoice, the product is paying. That is not wrong in itself — a good distributor provides service, paperwork and hand-holding that many investors value. The point is to know the price, because a cost you never see is a cost you never question.
What does "free" advice cost? An arithmetic illustration
Since 1 January 2013 every mutual fund scheme has come in two versions: a regular plan, which carries the distributor's commission inside its expense ratio, and a direct plan, which does not. SEBI ended upfront commissions in 2018, so distributors are now paid a trail commission for as long as you stay invested.
Take a ₹25,000 monthly SIP for 20 years — ₹60 lakh invested in all.
| Plan | Assumed return after costs | Value after 20 years |
|---|---|---|
| Direct plan | 11% a year | ₹2.18 crore |
| Regular plan | 10% a year | ₹1.91 crore |
| Difference | 1 percentage point | ₹27 lakh |
Assumption, not a forecast. Both returns and the 1-point gap are assumed for illustration; the real gap differs by scheme and is shown in every fund house's factsheet. Computed with our SIP calculator.
A 1% commission sounds small. Compounded over 20 years it is about 12% of the final corpus. On a ₹50 lakh portfolio it is ₹50,000 a year, and it grows as the portfolio grows.
What can a SEBI-registered investment adviser charge?
For individual and HUF clients, SEBI caps the fee in both permitted modes:
- Fixed fee: at most ₹1,51,000 per family per year.
- Percentage of assets under advice: at most 2.5% per family per year.
Fees may be collected in advance for no more than one year, and only if you agree. Non-individual clients and accredited investors negotiate their own terms. An individual registered as an adviser cannot distribute products at all, and a firm that does both must keep its advisory clients and its distribution clients separate.
The caps are ceilings, not typical prices. One widely used public list of flat-fee planners reports first-year fees ranging from ₹11,000 to ₹1.25 lakh, with renewals typically at about half.
How do I verify a SEBI-registered investment adviser?
- Ask for the registration number. It begins with the letters INA followed by nine digits. An ARN is a distributor code, not an adviser registration.
- Search SEBI's list. On sebi.gov.in go to Intermediaries / Market Infrastructure Institutions → Recognised Intermediaries → Investment Adviser, and search by name or number. Check that the name, registration number, address, contact person and validity match what you were told.
- Check where the money goes. Since 1 October 2025, registered intermediaries collect UPI payments through validated handles that end in "@valid" plus the bank's name, with ".ia" marking an investment adviser. Never pay an adviser's fee into a personal account.
- Expect paperwork. A signed advisory agreement, risk profiling before any advice, and an invoice. SEBI bars advisers from promising assured or target returns; anyone who does is telling you something.
What should I ask any adviser — including us?
- Are you registered with SEBI as an investment adviser? What is your INA number?
- How exactly are you paid? Do you, your family or your firm earn anything from the products you suggest?
- Will you use direct plans?
- What is my total yearly cost in rupees — your fee plus the product costs?
- What do I get in writing: agreement, risk profile, plan, review schedule?
- What happens if I leave mid-year? Is there a refund?
- Where do complaints go if we disagree?
FAQ
Is a fee-only financial planner worth it?
Is a mutual fund distributor the same as an investment adviser?
How much does it cost to talk to a financial adviser?
Is Astra Wealthcraft a SEBI-registered investment adviser?
Sources: SEBI — FAQs on registered investment advisers (Aug 2025); SEBI — Master Circular for Investment Advisers (27 Jun 2025); fee caps in SEBI's circular of 8 Jan 2025, as reproduced by TaxGuru; SEBI — advance fee circular (2 Apr 2025); SEBI — validated UPI handles (Jun 2025); freefincal — list of flat-fee planners (updated 1 Aug 2026). All checked 19 Sep 2026.
Education only. This article does not recommend any product and is not investment advice. For tax and compliance work, or to point out an error, get in touch.
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