Difference between an Investment Advisor and Mutual Distributor or Bank Relationship Manager

Both are meant to help you with your investment decisions, which may include mutual fund selection. However, as the name suggests, a mutual fund distributor tends to focus more on mutual fund products, while an investment advisor may offer a wider range of products and services.

Does this mean that a mutual fund distributor would sell any mutual fund program to investors just to earn a commission? Well, the regulations are very strict in this regard. If a mutual fund distributor sells a mutual fund that is not suitable for the investor, it will be considered a "bad sale", which is a criminal offence. A mutual fund distributor should understand the investor's situation/risk profile and recommend products suited to the investor's needs at the time of the recommendation. On the other hand, an investment advisor can look at the bigger picture, which can include assessing the investor's assets, liabilities, income and expenses, and recommending products.

Both are registered and therefore regulated companies. While investment advisers are registered directly with SEBI, mutual fund distributors are registered with AMFI – the Mutual Fund Association of India.

SEBI Registered Advisor

1. Advisor have better qualifications to advice and are registered with SEBI
2. Provides Fee only services only i.e doesn’t take commissions form companies on products you buy. They charge the customer for the advice similar to a doctor.
3. Advice with with Direct mutual funds only
4. Detailed Personalised Financial Planning based on goals, financial conditions etc
5. Can give advice on wide variety of products including Stocks, Direct Mutual Funds, Gold, Bonds etc

There are only 1300 SEBI advisors in India.

Mutual Fund Distributor or Bank Relationship Manager

1. Distributors are registered with AMFI (Mutual Funds Association)
2. Distributors are Earns commissions indirectly from Mutual funds based on the products that on your invest in
3. Sells Regular  funds - higher expense ratio. Expense ration of upto 2% is charged on entire investments every year automatically
4. No detailed financial planning based on your goals,
5. Doesn’t advice on using index mutual funds as commissions are lower

There are around 1.5L mutual fund distributors in India.

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