Robo-Advisors in India: What They Manage vs What They Only Explain

Quick context: This article explains the regulatory categories behind the word "robo-advisor" and how to check which one you are dealing with. It does not review or rank any provider. For a comparison of AI personal-finance apps by what each says it does, see best AI-powered personal finance platforms in India.

"Which robo-advisor should I use?" is a question I get asked often, and it usually cannot be answered as asked. Open the three investing apps on a typical phone and you may find a registered adviser, a mutual fund distribution platform and a budgeting app with a chatbot — all describing themselves as some version of "AI-powered wealth".

They are not three versions of the same thing. They are three different legal relationships, with different people deciding what happens to your money and different people paying the platform.

The question worth asking is not "which robo-advisor is best". It is: what does this platform actually do with my money, who decides, and who pays it?

# Four things that get called a robo-advisor

# 1. A SEBI-registered Investment Adviser that uses automated tools

Of the four, this is the category built specifically to give you personalised investment advice for a fee.

SEBI's Investment Advisers Regulations, 2013 do not carve out a separate licence for algorithms. Advice produced by software is still investment advice, and the entity giving it must be registered as an Investment Adviser (IA). The regulations do exclude advice given through newspapers, magazines or electronic and broadcast media that is widely available to the public — which is why general content is not treated as advice — but a platform that profiles you and tells you what to buy is in advice territory.

What you get from a registered IA, automated or not:

• A risk profile and a suitability assessment.
• An agreement setting out the terms.
• Fees within the limits SEBI sets. The Master Circular for Investment Advisers of June 2025 caps fees at 2.5% of assets under advice per annum per family under the AUA mode, or ₹1,51,000 per annum per family under the fixed-fee mode.
• A disclosure of how far AI tools are used in giving you advice. This has been required since the December 2024 amendments, which also made the adviser solely responsible for the security and confidentiality of client data regardless of the tools used.

What you usually do not get: the adviser does not hold your money. You receive advice and act on it yourself, or through your own broker or fund house.

# 2. A Portfolio Management Service (PMS)

A portfolio manager is registered under a separate set of rules, the SEBI (Portfolio Managers) Regulations, 2020. A discretionary portfolio manager exercises discretion over your investments — it decides and executes. A non-discretionary one manages in line with your directions.

The practical dividing line is the ticket size. The regulations bar a portfolio manager from accepting funds or securities worth less than ₹50 lakh from a client, with exceptions for accredited investors. So if an app with a ₹500 minimum describes itself as "managing your portfolio", it is not a PMS, whatever the marketing says.

# 3. Mutual fund distribution and execution platforms

Many of the best-known investing apps fall here. There are two quite different models.

Distributors hold an ARN (AMFI Registration Number) and sell regular plans of mutual funds. They are paid a commission by the fund house, which is built into the regular plan's expense ratio. AMFI's own investor material says the direct plan has a lower expense ratio because no distributor or agent is involved, and that this saving is added back to returns.

Execution-only platforms let you invest in direct plans. SEBI created a regulatory framework for these in June 2023, covering AMFI-registered entities and stock brokers acting as execution-only platforms for direct plans.

Neither model is the same as advice. A distributor may suggest funds, and there is nothing illegal about being paid by the fund house — but you should know that the platform's income depends on which plan you buy.

SEBI's regulations also keep advice and distribution apart for advisers: Regulation 22 of the IA Regulations requires a non-individual adviser to keep advisory and distribution clients segregated at group level, so the same client cannot be offered both within the group, and individual advisers cannot offer distribution at all.

# 4. Education, tracking and organisation tools

This is where budgeting apps, net worth trackers, calculators and AI explainers sit — and it is where VittSphere ONE sits.

These tools help you see what you own, understand concepts, track returns and organise your tax. They do not hold your money, do not execute investments on your behalf, and — if they are describing themselves honestly — do not tell you personally which security to buy. They are not registered as advisers because they are not supposed to be advising.

The risk in this category is not the tool. It is a tool that drifts from explaining into advising without the registration to do so.

# Manage, advise, sell, explain — side by side

# Where the regulation is heading on AI

Two things are worth knowing about as of September 2026.

First, the AI provisions that already apply. Since the December 2024 amendments, both Investment Advisers and Research Analysts must disclose to clients the extent of their use of AI tools, and remain responsible for client data whatever tools they use.

Second, in June 2025 SEBI published a consultation paper on guidelines for the responsible use of AI and machine learning by market participants. A consultation paper sets out proposals for comment; it is not itself a binding rule. If a platform tells you its AI is "SEBI-approved", ask which specific registration or rule it is referring to.

A small clarification while we are here: SEBI's February 2025 circular on safer participation of retail investors in algorithmic trading deals with automated trading through stock brokers. That is a different subject from automated advice, even though both get called algorithmic.

# A five-minute checklist before you sign up

1. Find the registration number and the registered name. Advisers must display their registered name, registration number and validity on their website and app, according to SEBI's June 2025 master circular.
2. Look it up yourself. SEBI's website lists registered intermediaries by category. For Investment Advisers, search by name or registration number on the SEBI list of registered Investment Advisers. Check that the registered name matches the entity you are signing the agreement with — brand names and company names often differ.
3. Work out how it is paid. A fee from you, a commission from the fund house, a subscription, or a mix. Each is legal. Each creates a different incentive.
4. Ask where your money sits. In your own demat and folios, or with an intermediary? Who can place orders?
5. Ask for the AI disclosure if it is a registered adviser and uses AI tools. You are entitled to it.

If a platform gives you specific buy or sell recommendations and you cannot find its registration, that is the answer to your question.

# Where a tracking tool genuinely fits

There is a sensible division of labour here, and it does not require choosing one app.

An adviser — human or automated, but registered — answers the question what should I do. A tracking tool answers the questions that come before and after: what do I own, what has it actually returned, and what does it cost me in tax? Most people cannot tell an adviser their true XIRR across four platforms, or which of their funds are regular plans. A tracker makes that first meeting faster and the advice more specific.

The mistake is using a tracker as if it were an adviser, or an adviser's recommendation as if it were a tracker's data. The XIRR vs CAGR guide is a good place to start on the tracking side, and goal-based investing shows how to organise holdings around what they are for.

See everything you own, and what it has really returned, in one place. VittSphere ONE tracks your SIPs, funds, stocks and family net worth and explains them in plain language — an organising layer, not an adviser. Start free →

# References (verified 23 September 2026)

1. SEBI — Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 [Last amended on November 25, 2025]: https://www.sebi.gov.in/legal/regulations/nov-2025/securities-and-exchange-board-of-india-investment-advisers-regulations-2013-and-securities-last-amended-on-november-25-2025-_98246.html
2. SEBI — Master Circular for Investment Advisers (SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/94, 27 June 2025): https://www.sebi.gov.in/legal/master-circulars/jun-2025/master-circular-for-investment-advisers_94821.html
3. SEBI — Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020 [Last amended on September 03, 2025]: https://www.sebi.gov.in/legal/regulations/sep-2025/securities-and-exchange-board-of-india-portfolio-managers-regulations-2020-last-amended-on-september-03-2025-_96560.html
4. SEBI — Regulatory framework for Execution Only Platforms for facilitating transactions in direct plans of schemes of Mutual Funds (SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/86, 13 June 2023): https://www.sebi.gov.in/legal/circulars/jun-2023/regulatory-framework-for-execution-only-platforms-for-facilitating-transactions-in-direct-plans-of-schemes-of-mutual-funds_72479.html
5. SEBI — Safer participation of retail investors in Algorithmic trading (SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/0000013, 4 February 2025): https://www.sebi.gov.in/legal/circulars/feb-2025/safer-participation-of-retail-investors-in-algorithmic-trading_91614.html
6. SEBI — Consultation Paper on guidelines for responsible usage of AI/ML in Indian Securities Markets (June 2025): https://www.sebi.gov.in/reports-and-statistics/reports/jun-2025/consultation-paper-on-guidelines-for-responsible-usage-of-ai-ml-in-indian-securities-markets_94687.html
7. SEBI — List of registered Investment Advisers (intermediary search): https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=13
8. AMFI — Knowledge Center: Direct Plan: https://www.amfiindia.com/investor/knowledge-center-info?zoneName=DirectPlan

# Related reading

1. Best AI-powered personal finance platforms in India (2026)
2. XIRR vs CAGR — calculating your real SIP returns
3. Goal-based investing — four portfolios
4. Mutual fund taxation after Budget 2024

Disclaimer: This article is educational and describes regulatory categories in general terms; it does not review, rank or recommend any robo-advisory, PMS, distribution or tracking platform. VittSphere ONE is not a SEBI-registered Investment Adviser, Research Analyst or Portfolio Manager, is not a mutual fund distributor, does not manage money and does not give personalised investment advice. Fee limits and regulatory provisions are summarised from the SEBI sources listed above as they stood on the date below and can change; verify current requirements on sebi.gov.in and confirm any provider's registration directly before engaging it. Data verified 23 September 2026.

Written by

Prabhakar Kumar

Chartered Accountant (ICAI, Nov 2019)

Chartered Accountant (FCA, ICAI) and founder of VittSphere Technologies. Writes on Indian taxation, capital gains, GST and personal finance.