Family Offices Sit at a Genuine Regulatory Fork
CA firms that build out family office capability almost always start from a place of strength — trust structuring, succession planning, tax optimisation, consolidated reporting across multiple entities and generations. That's core CA/CS territory. But family offices, almost by definition, eventually touch investment decision-making: which AIFs to commit to, how to rebalance a listed portfolio, whether to increase exposure to a particular asset class. The moment a family office professional is compensated — directly or through a bundled retainer — for that kind of recommendation, SEBI's Investment Adviser framework is in play, and the "it's just family office work" framing doesn't hold up on its own.
Where IA Registration Is NOT Required
There is a genuine and fairly wide zone of family office activity that does not trigger IA registration:
- Pure structuring and consolidation — setting up family trusts, HUFs, holding entities, and consolidated reporting dashboards without recommending specific securities or funds
- Execution-only support — placing trades or capital calls strictly on the family's own instructions, without providing the underlying investment rationale
- Tax and succession planning — advising on the tax consequences of an investment decision the family has already made, as opposed to recommending the investment itself
- Single-family office structures where the "adviser" and the "advised" are effectively the same economic family — SEBI's regulations carve out certain single-family arrangements, though the boundary here needs to be assessed carefully on the facts, not assumed
Where IA Registration IS Required
The line gets crossed the moment the family office function starts to look like advisory-for-consideration to parties who are not simply an extension of the same family unit:
- Multi-family office structures advising unrelated families for a fee
- Any explicit recommendation — "move 15% into this AIF," "exit this listed position" — delivered as part of a paid retainer, even if wrapped inside a broader "family office services" fee
- Portfolio review and rebalancing advice delivered on a recurring basis as part of the family office mandate
- Due diligence recommendations on specific funds or securities that go beyond factual reporting into a "we recommend" posture The practical risk for CA-led family offices is that these activities creep in gradually — a trusted family accountant starts as the person who consolidates statements, and within a few years is the person families are asking "so what do you think we should do with the Category II AIF allocation." That drift is exactly where SEBI enforcement and client-side disputes originate.
Structuring the Practice Correctly
For CA-led family offices that want to retain advisory capability without building unnecessary regulatory exposure, the cleanest structures we see are:
Bright-line service agreements that explicitly separate structuring/reporting/tax work (billed under the CA engagement) from any investment recommendation activity (which either sits under a properly registered IA arm, or is scoped out entirely and referred externally).
A registered IA entity, arms-length from the core family office, when the family office genuinely wants to deliver investment recommendations at scale — built with proper net worth, NISM certification, and Principal Officer structuring, exactly as any other IA registration would require.
Documented investment policy statements signed by the family that make clear where the family office's role stops (implementation, reporting, tax) and where the family's own decision-making begins — this documentation matters enormously if a dispute or SEBI query ever arises.
How We Help
Anuj Desai & Associates works with CA and CS-led family offices to get this boundary right before it becomes a liability — not to tell families what to invest in, but to make sure the structure around that advice, if given, is compliant. Our scope includes:
- Activity mapping — auditing your current family office service delivery against SEBI's IA definition to flag where drift has already occurred
- Entity structuring — setting up a properly registered, arms-length IA vertical where the family office genuinely needs one
- Documentation — investment policy statements, service agreements, and fee structures that keep structuring/tax work cleanly separated from advisory work
- Regulatory response — handling SEBI queries or notices if prior activity needs to be regularised If you're running or building a family office practice inside a CA or CS firm, write to office@anujdesaiassociates.com or call +91 96194 56656 — we'll review your current service scope and tell you plainly where the exposure sits.
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