SEBI penalises Dwaith Advisory for excess investment-adviser fees
→Investment advisers need accredited-investor proof before using flexible fee terms
Change
SEBI penalised Dwaith Advisory ₹1 lakh for charging investment-adviser fees above the 2.5% AUA cap where the client was not registered as an accredited investor during the agreement and fee period.
Why it matters
The order makes accredited-investor fee flexibility depend on formal accreditation status, not just client wealth or later registration. Dwaith charged a performance-linked fee equal to 10.21% of AUA against the applicable 2.5% cap. Investment advisers must evidence accredited-investor certification before applying bilaterally negotiated fee terms outside SEBI’s standard fee limits.
Implications
- → SEBI-registered investment advisers must verify accredited-investor certification before applying bilaterally negotiated fee terms — client net worth alone does not displace the standard fee cap.
- → Investment-adviser compliance teams must map fee invoices to the client’s accreditation status during the actual fee period — later accreditation does not cure earlier excess-fee charging.
- → Advisory billing teams using AUA-based fees must keep charges within the 2.5% per-annum cap unless a valid accredited-investor exception applies — performance-linked structures can breach SEBI fee limits when used for non-accredited clients.
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Source
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