How to Choose a SEBI Registered Stock Advisor: 8 Questions to Ask First
Checklists tell you what to look for. This is what to actually say. Eight questions, the answer that should satisfy you, and the specific evasion each one is designed to expose.
Before you ask anything: the one check that comes first
Verify the SEBI registration yourself, at source, before you spend a minute on any other question. Search the number on sebi.gov.in in the list of registered intermediaries, and confirm four things: the number exists, the exact legal entity name matches, the category is what they claim, and the registration is currently active.
If that fails, nothing below matters. If it passes, the eight questions start.
These are not gotchas. A competent registered provider answers all eight without hesitation because the answers are already published. The value is in the pattern of evasions, not in any single reply.
Q1. What is your SEBI registration number and category?
A good answer: the number, immediately, plus the category — Research Analyst (INH) or Investment Adviser (INA) — and an invitation to verify it.
What the evasions mean: “We're associated with a SEBI registered firm” means the entity taking your money is not registered. “It's on our website somewhere” from someone who cannot recite it is a bad sign for a number they should know. A category mismatch — an INH registrant offering personalised portfolio advice — means they are operating outside their registration, whether or not they realise it.
Q2. What exactly am I buying?
A good answer: a specific description. Which strategies, which instruments, what frequency of research, what is included and what is not, the billing period, and the refund terms — all of it available in writing on the registered entity's own site.
What the evasions mean: vagueness here is almost always deliberate, because a precise description invites a precise comparison. “Premium calls” and “VIP access” are tier names, not product descriptions. If you cannot restate what you are buying after the answer, you have not been told.
Q3. What is the maximum drawdown, and when did it happen?
This is the most informative question in the list.
A good answer: a number and a period. “Maximum peak-to-trough decline of 24.7% over the 12-month window, worst stretch in the January–February period, recovery took about three months.”
What the evasions mean: “We focus on returns” is a decline. “It depends on your risk management” is a deflection — drawdown is a property of the strategy, not of you. “We've never had one” means the record has been filtered, because every strategy trading Indian markets has losing periods.
Apply the stated maximum drawdown to the capital you intend to deploy. If the resulting rupee figure is one you would not tolerate without abandoning the strategy, the return figures are irrelevant — you would have exited before collecting them.
Q4. Is this live performance or a backtest?
A good answer: a clear split. “The record from March 2025 is live and forward-published; anything before that is backtested and labelled as such.”
What the evasions mean: a smooth equity curve with no live/backtest attribution should be assumed to be backtested until proven otherwise. Backtests are trivially easy to make beautiful by fitting parameters to historical data. If the answer is “it's all simulated”, ask what the walk-forward procedure was — and if there was none, the number describes the past rather than the method.
Q5. In which market conditions does this lose money?
A good answer: specific and unembarrassed. “Momentum strategies bleed in extended sideways ranges — repeated failed breakouts. Our worst stretches correlate with low-volatility chop.” Or: “Option selling suffers in volatility shocks; a gap event is our primary risk.”
What the evasions mean: a provider who cannot name their strategy's hostile regime either does not understand it or has decided not to tell you. “It works in all market conditions” is not a description of any strategy that exists.
Q6. What capital is this designed for?
A good answer: a minimum and a recommended figure, per strategy, with a reason. Options-selling strategies need materially more than option-buying ones, because margin expands under stress.
What the evasions mean: “Start with whatever you're comfortable with” is a sales answer. Running a strategy below its designed capital is not a smaller version of it — it is a more fragile one, because a normal drawdown forces involuntary exits at exactly the wrong time.
Q7. Are these figures gross or net of costs?
A good answer: explicit. “Figures are recorded on one lot and exclude brokerage, slippage and taxes” is an acceptable answer because it is stated. “Net of an assumed X per round trip” is better still.
What the evasions mean: silence on costs, in a high-turnover strategy, can be the difference between a viable and an unviable product. Brokerage, exchange charges, STT, GST, stamp duty and slippage compound across every trade. Ask, then subtract your own real costs from the stated average net per trade.
Q8. What happens if I want to complain?
A good answer: the internal grievance channel, the response timeline from the Investor Charter, and the escalation route — SEBI's SCORES platform, and the online dispute resolution mechanism for disputes.
What the evasions mean: a provider unfamiliar with its own grievance process has probably never had to use it, or has never published one. Both are worth knowing before rather than after.
Scoring the conversation
| Signal | What it indicates |
|---|---|
| Numbers offered before you ask | Published record, nothing to manage |
| Answers all eight without discomfort | Research operation |
| Redirects drawdown questions to returns | Selling, not disclosing |
| Introduces urgency — limited seats, price rising | Sales technique, not research |
| Offers screenshots as evidence | The least verifiable format available |
| Mentions guaranteed returns or profit-sharing | End the conversation |
| Asks for your broker credentials | End the conversation immediately |
Two or more red-column answers and you have your decision. You do not need to be certain a provider is bad — you only need to be uncertain that they are good, because there are registered alternatives that answer all eight.
Frequently asked questions
What should I ask before subscribing to a stock advisory?
Start with registration number and category, then move to the specifics of what you are buying: maximum drawdown and when it occurred, whether performance is live or backtested, the conditions in which the strategy loses money, the capital it is designed for, whether figures are net of costs, and the grievance route.
The questions matter less than the quality of the answers. A research operation has numbers for all of them; a sales operation has adjectives.
How do I know if a stock advisor is genuine?
Verify the SEBI registration number yourself on sebi.gov.in — confirm the number, the exact entity name, the category and that the registration is active. Then check that fees are paid to the registered entity, and that an Investor Charter and complaint data are published.
Is it rude to ask an advisory service these questions?
No, and the reaction is itself diagnostic. A registered research operation answers factual questions about its own published record without discomfort, because it has the numbers. Defensiveness, urgency or a pivot to testimonials in response to a direct question about drawdown is the answer.
What if the advisor refuses to share drawdown figures?
Treat it as a decline. Maximum drawdown is the single most important number for deciding whether you can actually stay in a strategy, and any provider tracking performance at all knows it. Not sharing it is a choice about what they want you to see.
Should I choose an advisor based on recent returns?
Recent performance is the weakest selection criterion available. In any large population of providers, some will have had an excellent quarter through luck alone, and the ones advertising hardest are usually the ones who just had it. Judge the process, the disclosure and the drawdown instead.