SEBI directs portfolio managers to pull misleading ads over performance claims

New Delhi: The Securities and Exchange Board of India (SEBI) has asked portfolio managers to withdraw advertisements and marketing materials that make unverified or exaggerated claims about returns or investment capabilities. The directive, issued on June 10 to the Association of Portfolio Managers in India (APMI), comes amid increasing concerns around misleading promotions in the wealth management space.

SEBI stated it had noticed “superlative or unverified” claims by several registered portfolio managers across their websites and in public-facing media. These, the regulator warned, “create a false impression regarding the apparently superior returns generated by these entities,” according to a Business Standard report.

The regulator has instructed all concerned entities to take down such content immediately and to comply with the Code of Advertisement as laid out in SEBI’s Master Circular for Portfolio Managers, last updated on June 7 2024.

Although the latest advisory serves as a caution, SEBI noted that it does not preclude enforcement action against firms that continue to flout advertising norms.

The move comes at a time when the portfolio management services (PMS) industry has seen significant growth. As of March 2025, PMS providers collectively managed assets worth nearly Rs 37.8 trillion, serving around two lakh clients.

This development also aligns with SEBI’s broader focus on transparency and accountability in the investment advisory space. In December 2024, it introduced the Past Risk and Return Verification Agency (PaRRVA), which independently verifies performance-related claims made by investment advisers, research analysts, and algorithmic trading platforms.

With a growing number of high-net-worth individuals turning to PMS offerings, the regulator’s latest directive is seen as an attempt to curb inflated marketing narratives and reinforce investor protection.