Equity and passive funds remain the primary drivers of this expansion. Systematic Investment Plan (SIP) inflows reached approximately ₹29,445 crore in November, while the industry’s assets under management crossed a landmark ₹80.80 trillion. Investing has truly gone mainstream: SIPs are now part of everyday conversation, and fintech platforms have made mutual fund access seamless and frictionless.
Access vs advice
But beneath this success lies a growing structural imbalance.
India’s mutual fund ecosystem is served by roughly 200,000 distributors (MFDs) and only 965 registered investment advisers (RIAs) with the Securities and Exchange Board of India (Sebi). That’s about one adviser for every 11,000 new investors, compared with 1:1,500 in the US and 1:900 in Singapore.
Meanwhile, the number of affluent individuals is rising rapidly. Goldman Sachs Research projects India’s affluent population to grow from 60 million in 2023 to 100 million by 2027. Yet the number of qualified wealth managers is lagging. The gap is most pronounced among first-time investors, over 70% of whom entered the market in the past five years, many from tier-2 and tier-3 cities.
Most lack formal financial education and learn through trial, error, and basic online research. The result: India’s investor base is expanding far faster than its capacity to guide them through long-term wealth creation. Without structured guidance, investors often start well but struggle to maintain discipline, balance risk, or stay invested during market volatility.
Financial advice goes beyond fund selection; it includes insurance, tax planning, debt management, and goal prioritization. Meanwhile, “finfluencers” offering unregulated advice have exposed many investors to risky decisions.
Too many funds
The problem is compounded by the sheer number of options. India now has more than 2,100 mutual fund schemes across 44 fund houses. For new investors, this can be overwhelming. Digital platforms make buying funds easy but do not help in building coherent, goal-driven portfolios.
Over-diversification is one symptom; investor behaviour under market stress highlights the deeper need for guidance. Over the past five years, Nifty 50 delivered 20.9% CAGR, well above its 30-year average of 11.3%. But the last 12 months were rough, with Nifty 50 returning just 4.3%.
Bull markets breed optimism, but bear markets trigger panic. Many investors withdraw funds during downturns, erasing years of potential compounding.
Consider a 32-year-old professional with 12 SIPs across nine funds on different platforms. On paper, this seems diversified. In reality, 70% of her corpus is concentrated in overlapping large-cap equities. When markets dip, she halts her SIPs, undoing years of growth.
A wealth manager can prevent such mistakes, linking investments to goals, diversifying across assets, and setting expectations. Regular guidance keeps investors focused on long-term wealth creation rather than short-term reactions.
Guidance matters
To sustain India’s investing boom, the next phase of financial inclusion must shift from access-led to guidance-led growth. Three shifts can bridge the advisory deficit:
Empower advisors with digital tools, analytics, and training to scale reach and improve portfolio monitoring.
Leverage artificial intelligence (AI) to deliver personalized insights at scale, helping investors make better allocation and rebalancing decisions.
Hybrid models that combine human guidance with digital platforms for execution and disciplined investing.
India’s investing boom has solved access, but not guidance. Participation alone is not progress. True financial inclusion means not just how many people start investing, but how many remain invested through market cycles, volatility, and life transitions.
To transform a nation of savers into a nation of wealth creators, India must close the gap between seamless execution and meaningful advice, scaling trusted guidance through a stronger advisor ecosystem that blends human judgment, technology, and disciplined, goal-led investing.
Aditya Agarwal is co-founder at Wealthy.in, a wealth-management platform.
