| Regulatory Status | Registered with SEBI under SEBI (IA) Regulations, 2013. | Not registered with SEBI; operates without legal authority to provide advice for consideration. |
| Legal Authority | Operates legally, subject to SEBI's comprehensive regulatory framework. | Operates illegally if providing investment advice for a fee/consideration. |
| Qualifications & Certifications | Mandated educational qualifications (e.g., postgraduate in finance) and NISM certifications. | No mandated qualifications or professional certifications. |
| Fiduciary Duty | Legally bound to act in the best interests of clients (fiduciary duty). | No legal fiduciary duty; may prioritize self-interest or product promotion. |
| Conflict of Interest | Strict disclosure requirements, segregation of advisory and distribution activities. | High potential for undisclosed conflicts of interest (e.g., promoting products for commission). |
| Client Suitability & Risk Profiling | Mandated to conduct client risk profiling and provide suitable advice. | No requirement for risk profiling; advice may be generic or unsuitable for individuals. |
| Grievance Redressal | Clients can approach SEBI's SCORES platform for complaints. Subject to SEBI's oversight. | No formal regulatory grievance redressal mechanism; limited legal recourse for investors. |
| Penalties for Violation | Subject to SEBI action (fines, suspension, cancellation of registration) for non-compliance. | Subject to SEBI action (bans, penalties) for operating illegally or market manipulation. |
| Investor Protection | High, due to regulatory framework, transparency, and accountability. | Low, high risk of misleading advice, fraud, or mis-selling. |
