Stock Selection: A few more metrics

In a previous column, I had written about the importance of return on equity (ROE) and the fact that most MNCs have delivered on this front. The ROE...


Globalisation: Global issues, local problems

A year ago, we were all sitting pretty, projecting increasing corporate profits assuming that the dollar would be at around Rs45. We assumed that our...


Stock Selection: Ownership matters

When selecting stocks, a conservative investor has to look at two primary factors, namely, ownership and the nature of the business. In this piece, I...


IPOs: Avoid Them

It was wrongly rumoured that the IPO (initial public offering) market is dead. It is, indeed, dead for dud issues at any price and for good issues at...


Investing: Nowhere to hide

Managers of other people’s money are going through very difficult times, across the world. The global economy is going through such a turmoil...


Lazy investing

A very valuable lesson in investing I learnt was from the father of one of my friends. His basic advice was that I should buy two residential houses....


Corruption & Investing: The many shades of grey

Does the corruption we see around us matter to us in any way whilst chasing an investment strategy? Assuming that everyone is corrupt, in principle,...


Stock Selection: The most important number

I strongly believe that the single most important number, at least for me, when considering investment in stocks, is return on equity or RoE (this is...


The reality of real estate

Would like to share a real-life experience in real estate investing. In 2007, I had booked an apartment in a premium project called...


Stock Selection: Focus on the India-focused

Many Indian companies, in the past few years, have witnessed increased offshore revenues. I do not know whether it is a good thing for those who...


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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu