The Pension Fund Regulatory and Development Authority also called PFRDA amended rules for retirement advisors through a gazette notification on February 20, 2024. The changes to “PFRDA Retirement Adviser Amendment Regulations, 2023” will apply immediately.

The “non-individual” applicants regulated by other financial regulators are also eligible to be a retirement advisor (RA). A new clause defines a non-individual retirement adviser as “a company under section 2(20) of the Companies Act, 2013, or a limited liability partnership registered under the Limited Liability Partnership Act, 2008, and registered as retirement adviser with authority.”

The security deposit is no longer required from RAs post-issuance of Certificate of Registration, which was Rs 50,000 (for non-individuals) and Rs 5,000 (for individuals).

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Applications are to be disposed of within 30 days.

The terms “advisor” and “advisors”, wherever appearing in regulation 18 of the principal rules, will be substituted with “adviser” and “advisers”, respectively.

Let’s know who these retirement advisors are and what they offer for retirement.

Who Are Retirement Advisors?

As PFRDA amended rules for retirement advisors, let’s know more details on who these people are. As per the PFRDA, a retirement advisor is “any person being an individual or non-individual, who for consideration, is engaged in the activity of providing retirement advice on National Pension System or any other pension scheme covered under the Act, to prospect or subscriber or other persons or group of persons and includes any person who holds out himself as a retirement adviser, by whatever name called.”

Simply put, any person willing to advise on the National Pension System (NPS) or other pension schemes regulated by the PFRDA and registered under the regulation.

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The amendment defines retirement advice as “activity relating to onboarding of prospects, advice on pension fund selection, investment allocation, portfolio management or risk profiling, which are properly recorded by the retirement adviser and has been undertaken for the benefit of the prospect or subscriber and shall include retirement planning.”

Notably, the “Retirement advice given through newspaper, magazines, any electronic, broadcasting or telecommunications medium, which is widely available to the public, shall not be considered as retirement advice for these regulations”, reads the amended regulation.

What Are The Eligibility Criteria?

Anyone inclined to be an RA must apply online on the PFRDA website to register under the PFRDA (Retirement Adviser) Regulations, 2016 & its subsequent amendments unless explicitly exempted. The applicant needs to submit the necessary documents online under the regulation. Here are the eligibility criteria:

Individual Applicants:

• The individual should meet the qualifications and requirements as per regulation and complete the “fit and proper person criteria in the Fifth Schedule.
• Must have tangible assets of a minimum of Rs 1 lakh on the last day of the preceding quarter.
• An applicant should have the necessary infrastructure to provide the related activities and services and any other criteria laid down by the authority.

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Non-Individual Applicants: 

• They should be registered and regulated by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), or the Insurance Regulatory and Development Authority of India (Irdai).
• The entity should be registered under the Goods and Services Act.
• It should meet the “fit and proper person criteria, and its key personnel should also fulfil the requirement specified in the Fifth Schedule and qualification as defined in Regulation 7.

What Services Do Retirement Advisors Offer?

RAs services include helping prospective subscribers fill out registration forms, such as personal details, nominee name, investment choice, etc., to enroll them under the scheme. They provide information about the scheme, the process to avail the benefits, advisory on the exit, information about different stakeholders and pension funds, investment choices, etc. They also offer periodic updates to the subscribers on the investment performance and provide a comparative analysis of the schemes and investments, asset portfolio, and market trends through e-mail, newsletters, or other means.

In short, they are certified to advise potential subscribers about retirement schemes regulated by PFRDA, assess subscribers’ risk profiles, allocate assets, help in enrollment formalities, and update them periodically about performance for better retirement planning.