Distributor, not adviser: what the difference means for you

Two different kinds of people can help you with mutual funds, and they are regulated differently. A distributor helps you transact; an investment adviser is paid to give you personalised advice. H2 Investment is a distributor. This article explains what that distinction means for you — the general roles, not H2’s own arrangements, which are set out in how we work.

Two defined roles

A mutual fund distributor is registered with AMFI and carries an ARN. Their job is to help you transact — completing your KYC, opening a folio, and placing your purchase, switch and redemption instructions. A SEBI-registered investment adviser, or RIA, is registered with SEBI, charges you a fee for personalised advice, and is regulated for that advice. One helps you act; the other is paid to tell you what to do.

What a distributor does and does not do

A distributor helps you transact, explains factually how products and processes work, and services the account you already hold. A distributor does not charge you a fee for a personalised plan, does not manage your portfolio at its own discretion, and does not decide for you which scheme is right — any guidance a distributor gives is incidental to helping you transact, not a paid advisory service. That is not a gap in the service; it is the definition of the role.

The decision stays yours

Because a distributor is not advising you for a fee, the investment decision remains yours. What suits you depends on your goal, your time horizon and how much rise and fall in value you can sit through — and because mutual fund investments are subject to market risks, there is no single right answer that fits everyone. A distributor can go through those factors with you and help you act once you have decided; the call itself is yours to make.

If you want formal advice

If what you want is a personalised, fee-based financial plan — someone regulated to assess your whole position and tell you what to do — that is the job of a SEBI-registered investment adviser, not a distributor. Neither role is “better” in the abstract; they are different things, and the right one depends on what you are looking for. Knowing which you are dealing with is the point of this page.