Disclosure of AI Use in SEBI-Registered Investment Advisory: What Clients Need to Know

August 18, 2026
Posted by: Ankit Jaiswal
Category: Market

SEBI requires investment advisers and research analysts using AI tools in their advisory or research process to disclose this use to clients. AI can assist with data analysis, pattern identificatio…

Quick Answer

AI in investment advisory services has evolved from a theoretical possibility to a practical reality for registered IAs and Research Analysts. AI tools are being used across the advisory value chain: screening investment opportunities, analysing financial data, drafting research reports and monitoring portfolio conditions. SEBI’s guidance on AI use in investment advisory services focuses on disclosure obligations and the continued requirement for human oversight of AI-assisted outputs.

The AI in investment advisory services disclosure expectation reflects a core regulatory principle: regardless of the tool used to generate a recommendation or analysis, the registered adviser remains accountable for the advice delivered. AI tools do not carry SEBI registration and cannot bear regulatory accountability — the human adviser or registered entity does.

This guide explains the AI in investment advisory services disclosure framework, the human oversight requirement and what investors should ask about AI use.

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Table of Contents

AI Disclosure Obligation for Investment Advisers

SEBI’s guidance on AI in investment advisory services establishes a disclosure expectation for registered IAs and Research Analysts: if AI tools are used materially in the process of generating advice or research, clients and subscribers should be informed. The disclosure does not need to be a detailed technical specification — it should inform the client that AI-assisted tools are used, what role they play (data analysis, screening, report drafting) and that the final recommendation or research is reviewed and validated by a human registered under the applicable SEBI registration.

What AI Can and Cannot Do in the IA Framework

AI in investment advisory services operates within a bounded role. AI can assist with: large-scale data analysis processing financial statements, market data and sector information faster than manual review; pattern recognition identifying technical setups, screener outputs and correlation patterns; research drafting producing structured research report templates based on input parameters; and portfolio monitoring alerting advisers to significant changes in recommended holdings. AI cannot perform: personalised risk profiling assessments requiring human judgement of a specific client’s financial situation; the suitability determination matching a specific client’s profile to a specific investment; or the accountability function that requires a SEBI-registered human to bear regulatory responsibility for advice delivered.

AI Assistance Role	Permitted?	Human Oversight Required
Data analysis and screening	Yes	Yes — validate outputs
Research report drafting	Yes	Yes — review and approve before delivery
Portfolio monitoring alerts	Yes	Yes — human review before client communication
Personalised risk profiling	No — human judgement required	Full human responsibility
Suitability determination	No — regulatory accountability on human adviser	Full human responsibility

Investor Implications

Investors using advisory services that employ AI in investment advisory services should ask: is AI used in this service? If so, what specific functions does AI perform? Is every AI-assisted research output reviewed and validated by a qualified human before it reaches clients? Does the disclosure document confirm the human oversight arrangement? A SEBI-registered Research Analyst like Univest (SEBI RA Reg. No. INH000013776) uses analytical tools to support research efficiency while maintaining human analyst validation of all research published. Investors can review the platform’s disclosure documents for details on the research methodology including any AI-assisted processes.

Univest is a SEBI-registered research platform (SEBI RA Reg. No. INH000013776) operating under NSDL depository infrastructure. Investors who want SEBI-registered research alongside their advisory journey can explore Univest’s research tools, stock screener and market analysis available on the official Univest app.

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Conclusion

Understanding AI in investment advisory services in this context helps investors and advisory businesses navigate this area. SEBI requires disclosure when AI tools are used materially in investment advisory or research processes. AI can assist with data analysis, research drafting and portfolio monitoring. It cannot perform personalised risk profiling or the suitability determination — these require human judgement and bear regulatory accountability on the SEBI-registered adviser. Investors should ask advisory services whether AI is used, what functions it performs and how human oversight is maintained before the AI-assisted output reaches clients. The AI in investment advisory services principles discussed here help investors make informed decisions. The AI in investment advisory services principles discussed here help investors make informed decisions.

Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with official sources before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).

Frequently Asked Questions

Must investment advisers disclose if they use AI?

Ans. Ai in investment advisory services is relevant here. Yes. SEBI’s guidance on AI in investment advisory services establishes a disclosure expectation: if AI tools are used materially in generating advice or research, clients should be informed. The disclosure should cover what role AI plays and confirm that AI-assisted outputs are reviewed by a human registered under the applicable SEBI registration before delivery to clients.

Can AI replace a human investment adviser?

Ans. Ai in investment advisory services is relevant here. No. SEBI’s IA framework requires a human SEBI-registered adviser to bear accountability for advice delivered. AI tools can assist with data analysis, screening and report drafting, but cannot perform personalised risk profiling, suitability determination or bear regulatory responsibility. The human adviser’s registration and oversight remain mandatory.

What functions can AI perform in investment advisory?

Ans. AI in investment advisory services can assist with: large-scale financial data analysis, technical pattern recognition, research report drafting and portfolio monitoring alerts. All AI-assisted outputs should be reviewed and validated by a human adviser before being delivered to clients. AI assistance in these roles can improve research efficiency without replacing human advisory judgement.

What should investors ask about AI use in their advisory service?

Ans. Ai in investment advisory services is relevant here. Investors should ask: is AI used in this service? Which specific functions does AI perform? Is every AI-generated output reviewed by a qualified human before reaching clients? Where is this disclosed in the service’s documentation? A service that cannot answer these questions specifically may not have a clearly defined AI oversight protocol.

Does AI in research tools affect the accountability for advice?

Ans. Ai in investment advisory services is relevant here. No. The use of AI tools does not transfer or dilute the accountability for advice from the registered human adviser. The SEBI-registered entity or individual remains accountable for all advice and research delivered, regardless of how much AI assistance was used in generating the output. AI is a tool within the advisory process; accountability remains with the registered adviser.

How does AI use in advisory services affect SEBI compliance?

Ans. Ai in investment advisory services is relevant here. AI-assisted advisory processes must comply with all the same SEBI standards as manually produced advice: the suitability obligation, the record-keeping requirement, the disclosure standard and the conduct rules. An advisory entity that uses AI to generate research faster but delivers the output without human review creates a compliance risk — outputs that do not meet SEBI’s research standards because the human review step was skipped.

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Author: Ankit Jaiswal

Ankit Jaiswal is the Senior Research Analyst at Univest, leading the platform's in-house equity research desk and serving as the editorial reviewer for all research and blog content published at univest.in. With 11+ years of experience in Indian equity markets, he oversees stock recommendations, earnings analysis, sector coverage, and ensures every published article meets SEBI Research Analyst Regulations. He holds a Bachelor of Commerce (B.Com) from St. Xavier's College, Kolkata — one of India's most prestigious commerce institutions — and has cleared CMT Level 2 from the CMT Association, a globally recognised certification in technical analysis and market research. His research methodology combines fundamental analysis (earnings quality, balance sheet strength, management commentary) with advanced technical analysis (chart patterns, momentum indicators, market structure) — giving Univest's retail investors a dual-lens approach that most Indian research platforms lack. Ankit is among the most comprehensively certified analysts in Indian financial media, holding five NISM certifications: Series-XV (Research Analyst), Series-VIII (Equity Derivatives), Series-VII (SORM), Series-VI (Depository Operations), and Series-V-A (Mutual Fund Distributors). At Univest — India's SEBI-registered research and advisory platform — Ankit's responsibilities include leading the research team, finalising stock recommendations published across Pro Lite, Pro Super, and Pro Gold advisory services, and maintaining editorial oversight of all YMYL financial content published on the blog.