Capital market regulator Sebi said on Tuesday it would soon come out with norms for regulating the role of investment advisers.
"We have received a very detailed feedback and we are undergoing a process of discussion and shortly we will come out with regulations (on investment advisers)," Sebi whole time member Prashant Saran said in New Delhi.
"It is very difficult to give a time-line. We do need to build a consensus," he said on the sidelines of an Assocham event in New Delhi.
In September this year, Sebi had proposed to bar investment advisers from acting as agents for promoting financial products.
The entities, which include banks and fund managers, would have to be registered with a self-regulatory organisation as investment advisers, said the concept paper on Regulation of Investment Adviser issued by Securities and Exchange Board of India.
"No financial incentives/consideration would be received from any person other than investors seeking advice.
It had said, "the person who interfaces with the customer should declare upfront whether he is a financial adviser or an agent of the manufacturer."
Saran said mutual funds must increase their penetration in smaller cities and rural areas while financial literacy should spread among the uneducated also.
The focus should be on small investors so that the base widens.
Financial education should be sector-specific and product-neutral, he said.
Most of the money parked in mutual funds comes from institutional investors which include corporates, banks and foreign institutional investors.
Many financial products are becoming complicated and it is not easy for even an educated person to understand and analyse them, he said.
At the same time, Saran said financial structures across the world do not command as much respect as they used to in the past.