Question: I have been a Mutual Fund Distributor (MFD) for 10 years and just registered as a Registered Investment Adviser (RIA). Under the current rules, can I offer both distribution and advisory services to the exact same client to earn both a commission on the product and a flat advisory fee?
Answer: No. Under the SEBI (Investment Advisers) Regulations, an RIA (or their family/group entities) cannot provide both distribution and advisory services to the same client. Client-level segregation is strictly mandatory. You must choose to offer only one type of service to a specific client to avoid any conflict of interest.

Supporting evidence:
title: sebi.gov.in/guidelines-for-investment-advisers_47640.html
quote: Existing clients, who wish to take advisory services, will not be eligible for availing distribution services within the group/family of IA. Similarly, existing clients who wish to take distribution services will not be eligible for availing advisory services within the group/family of IA A new client will be eligible to avail either advisory or distribution services within the group/family of IA
context: Regulations, 2020 (hereinafter referred as 'amended IA Regulations') on July 03, 2020. These amendments shall come into force on September 30, 2020.
2. In addition to the above, Investment Advisers shall ensure compliance with the following guidelines:

(i) Client Level Segregation of Advisory and Distribution Activities

To ensure client level segregation at Investment Adviser's group/family 1 level, as per Regulation 22 (5) of amended IA Regulations, following compliance and monitoring process shall be adopted:
- a. Existing clients, who wish to take advisory services, will not be eligible for availing distribution services within the group/family of IA. Similarly, existing clients who wish to take distribution services will not be eligible for availing advisory services within the group/family of IA.
- b. A new client will be eligible to avail either advisory or distribution services within the group/family of IA. However, the option to avail either advisory services or distribution services shall be made available to such client at the time of on boarding.
- c. Client under these guidelines shall include individual client or non-individual client.
- d. The client shall have discretion to continue holding assets prior to the applicability of this segregation under the existing advisory/distribution
1 'Group' and 'family of an individual investment adviser' shall be as per Regulation 22 (3) (iii) and Regulation 2(gc) respectively of the amended IA regulations
arrangement. However, the client shall not be forced to liquidate/switch such existing holdings.

(i) Client Level Segregation of Advisory and Distribution Activities

- e. PAN of each client shall be the control record for identification and client level segregation.
- f. In case of an individual client, 'family of client' 2 shall be reckoned as a single client and PAN of all members in 'family of client' would jointly and severally be the control record. However, the same is not applicable for non-individual clients.
- g. The dependent family members shall be those members whose assets on which investment advisory is sought/provided, originate from income of a single entity i.e. earning individual client in the family. The client shall provide an annual declaration or periodic updation as the case maybe in respect of such dependent family members.
- h. IA shall, wherever available, advice direct plans (non-commission based) of products only.
- i. The investment adviser shall maintain on record an