The stock market is very popular among other types of assets due to its volatility, Liquidity, and Returns. Nowadays, new people and students come to the stock market with small capital and try to compound it. Compounding works with time, not small or big starting capital, with patiently holding companies.
After corona crash, many traders and investors entered the financial market. They have less than 10K capital and trade in equity and derivatives, and lose money. Trading is only risky when you don’t know what to do, when to buy and sell, understanding of in depth risk and sentiments.
Many newcomers fall into the trap of tips, recommendations, fake courses, portfolio management services, etc. They don’t understand who is right or wrong. Why, because the course sell don’t sell only the course, they sell emotions of hunger for money. As a Finance expert and an MA in psychology, I know how they trap people who want to get rich fast with less capital.
There are many finance influencers who use a disclaimer before sharing any tips or recommendations on companies they are genuine. Pranjal Kamra, Asset Yogi, Prasad Lendve of Finnovationz, they don’t sell tips and recommendations; they provide genuine knowledge and share the risk of a particular stock when they upload a video on YouTube. I also learned a few basics of the financial market in 2018.
My friend, whose name is Ganesh Padghan, also lost money to an unregistered financial advisor in 2020. He called Ganesh when he was in his medical shop and the scammer guarantee him that he will make profits from options trading after giving 2-3 calls and put to buy, ganesh losses his whole capital in 4-5 trades. There are many examples, we share with you to know what is right direction and what is wrong in this article.
Stock Market Course Selling Without License ?
Yes, anyone can sell stock market courses not only stock market but also financial market courses without license. Those who passed 12th std or graduation can sell courses on individual level. But for business you need license. Businesses require to fulfill SEBI, NSE guidelines before providing tips of stocks and mutual funds.
Selling course is not bad when you shares knowledge about stocks, mutual funds, etc SEBI also give permission you to literate people in finance. In fact many people learn from you concept about basics it helps to balance economics growth if many people know about it.
But those who sell dreams not knowledge are bad and SEBI will take strict actions in terms of money wise against those persons. If you show Past Returns, Screenshots, Guarenteed Profits, Show Money, etc then anyone will complaint against you and SEBI will pass orders on you.
Always learn from people who have practical experience in that field. We recommend that you to take stock market courses from CA, MBA, CFA, Economics, and Finance backgrounds, because they already have practical knowledge in that field; they don’t give you stock recommendations; rather, they give valuation, business cycles, cash flow methods, and technical knowledge.
Who Have Rights to Give Stock Tips and Investment Advise?
In India, only individuals or entities registered with the Securities and Exchange Board of India (SEBI) are authorised to provide investment advice. Lokesh from the Isrul village of Shindkhed Raja Taluka, he earns 1.2 crores, and with the help of that profit, he started selling and managing a portfolio of users and small traders. After 2 years, he lost his all his trading capital and sold land to fulfil the losses of others, and now he is currently shifted to Pune.
For stock tips and investment advice, you need to take an SEBI license, such as a Research Analyst, Financial Advisor, Investment Advisor, Portfolio Management Services, etc. If you get caught giving tips on any stocks without a license, then SEBI will fine you.
Those who run a telegram channel for tips, a WhatsApp group for options tips and recommendations with a license have the right to provide it. By law, only SEBI-registered professionals can provide investment advice.
A research analyst is a person who have detail knowledge in the fundamentals of the company, valuation methods like DCF, PE, etc. He can share stocks based on research.
Financial Advisor has detailed knowledge in financial assets like gold, mutual funds, SGB, Debt instruments, Index Funds, Real Estate, Cash Market, etc. He can personally advise you on stocks.
Investment Advisor, manage your investment capital, he have rights to buy and sell your stocks and charge you a fee not more than 2.5% of your capital.
Portfolio Management Services is a company or individual that manages high-net-worth individuals’ money.
Types of SEBI-Registered Intermediaries in the Indian Stock Market
These three are the main financial markets educators for individuals who want to learn, and if they don’t have time to learn, then they can give their money to manage them.
| Role | Responsibility | Fee Cap/Limit |
| Research Analyst | Provides research reports and stock ratings based on fundamentals. | N/A |
| Investment Advisor | Provides personalized financial planning and direct stock advice. | Max 2.5% of AUM or ₹1.25 Lakh/year |
| Portfolio Manager | Manages funds directly for HNIs (High Net Worth Individuals). | Minimum ticket size ₹50 Lakhs |
Laxmi from Mehkar, who doesn’t have time to research about stocks, then she can hire a Research Analyst to do her job. Once a research analyst conducts in-depth research, then he can tell Laxmi about which company is fundamentally good or not, but the final investment decision is in Laxmi’s hands.
In the case of an Investment Advisor, he can provide direct stock and investment advice to traders and investors. His advice is backed by solid details; he visits companies and asks them questions about future plans, balance sheet and every detail about the business.
Portfolio Manager manages portfolios for High Net Worth Individuals. The Portfolio manager charges them monthly or annual fees for managing funds.
Risks of Unauthorised Tip Providers
Unauthorised tip providers may spread misinformation, manipulate prices, or disappear after losses occur. Investors face financial damage with little legal recourse, highlighting the importance of relying on regulated and credible sources.
Penalties for Giving Illegal Stock Tips
Providing stock tips without SEBI registration can result in heavy fines, bans, and legal action. Regulators may also order refunds to investors and restrict future participation in securities-related activities.
Investor Protection Rules in India
Investor protection rules aim to ensure fairness, transparency, and safety in financial markets. These include mandatory disclosures, grievance redressal mechanisms, and strict action against fraud, mis-selling, and unregistered advisory services.
How to Verify SEBI Registration
Investors can verify SEBI registration by checking the official SEBI website or intermediary databases. This helps confirm whether an adviser or analyst is authorised to provide investment advice or stock recommendations legally.
Ethical Responsibilities of Market Educators
Market educators have an ethical duty to provide accurate information, highlight risks, avoid hype, and respect legal boundaries. Responsible education empowers learners instead of exploiting their desire for quick profits.
Common Misconceptions About Guaranteed Returns
Many believe consistent guaranteed returns are possible in the stock market. In reality, markets are uncertain, and any promise of assured profits is a red flag indicating potential fraud or unethical practices.
Best Practices for Learners and Investors
Learners should focus on education, verify credentials, avoid tip-based trading, and build independent decision-making skills. Investors must practice risk management, long-term thinking, and rely on regulated professionals when seeking advice.
Disclaimer:- “This article is for educational purposes only and does not constitute legal advice. Always consult with a legal professional regarding SEBI compliance.”
