Will AI Replace Human Financial Advisors In India?

The impact of AI in various spheres of life is now more evident. When you open a social network such as Instagram, you can see AI-generated reels and videos used for entertainment purposes. There are dedicated pages on YouTube that use AI and recreate songs using the voices of different artists. People have started to ask questions to generative AI bots such as ChatGPT, and a simple Google search now provides you with an AI-generated summary rather than web page results.

In the service sector, AI bots have replaced traditional customer service. If you are a tech-savvy investor, you may have asked for financial analysis or even recommendations from an AI chatbot regarding a stock or investment asset. AI-based investment advisors offer several advantages, including convenience, the ability to handle a large number of requests simultaneously, and cost-effectiveness. However, the question to answer here is: Will AI ever replace human financial advisors in India, where human touch in every sector still holds irreplaceable value? 

Let us find out more about AI financial advisors in India.

Adoption Of AI In Indian Financial Institutions

AI is not only utilised by retail investors for financial advice, but financial institutions are also actively adopting AI for different purposes. Recently, a survey conducted by the Reserve Bank of India (RBI) revealed that out of 612 financial entities, 20.8% are using or developing AI systems. The RBI has also estimated an improvement of 40.6% in banking operations through generative AI. The NBFCs are also adopting AI for their different operational purposes, such as the loan application process and borrower assessment, etc.¹

Source: Fortune India 

In such a scenario, when retail investors and financial institutions are adopting AI, it becomes essential to understand the impact of this on the financial habits of Indians.

How AI Advisors Are Changing Money Habits In India

1. Growing Adoption Among Gen Z And Millennials

Compared to previous generations, Gen Z and millennials are notably tech-savvy, placing them at the forefront of India’s AI-finance revolution. A majority of working millennials and Gen Z population have already started to use AI, and they trust the latest technologies in resolving different issues. The trend is also common from the investment perspective. They prefer apps that deliver personalised financial insights instantly, without the formality of traditional advisory setups.

2. Key Use Cases: Budgeting, Tax Planning, Asset Allocation

AI is all about asking the right questions. With the use of AI bots, it is possible to automate routine financial decisions, like setting monthly budgets, allocating mutual fund investments based on risk profiles, and calculating deductions to optimise taxes as per sections 80C and others. Some people also use different AI-based tools to track spending habits and nudge users toward smarter money habits using behavioural analytics.

3. Robo-Advisory Platforms And Apps In India

There are more than 30 AI-powered robo-advisory platforms currently active in India. These platforms offer a wide range of services, including AI-curated portfolios, rebalancing strategies, and financial goal tracking. Bigger fintech companies and new-age brokerage houses have also introduced different AI tools to enhance the overall user experience. 

Also Read: Overdose Of Investment Advisory– How To Deal With It?

But Here's The Catch: Why Humans Still Matter

1. Personalised Advice That Accounts For Emotions, Goals, And Life Stages

It is hard to replace personalised advice as AI models might lack human-like consistency, especially when interacting with other people. AI does not understand the nuances of everyday life, and human advisors often use relatable experiences and examples to tailor strategies for their clients. Human agents account for emotional needs, changing priorities, and cultural contexts that algorithms frequently miss.

2. Behavioural Coaching In Times Of Market Volatility

AI’s advice can be logical, but in a volatile market when panic affects human behaviour, the best advice often comes from real people. AI may flag market trends, but it can't reassure a nervous investor with empathy and experience. Consider the difference: AI will explain to you historical trends, but a human advisor will give you the ‘I have been there’ assurance. In a difficult situation, the human element becomes much more critical, and even the best robo-advisors in India will not provide you with a comprehensive investment solution.  

3. Real Examples Of Where Humans Outperform AI

Consider a young family navigating a mix of short-term goals and long-term retirement planning. While an AI might recommend an aggressive SIP portfolio, a human advisor may suggest partial allocation to child education plans or debt instruments, balancing risk with real-life needs. Or take a retiree with uneven cash flows: a human can suggest annuity ladders or bonds, while AI may focus narrowly on equity exposure. AI vs human financial advisor will be a long battle, but it is hard to overlook the human element in investments. 

Where AI Falls Short: Especially In Fixed Income Investing

A. Why AI Skips The Good Stuff: Bonds And SDIs

As mentioned before, AI is all about asking the right questions. For individuals with limited experience or knowledge of financial markets, seeking higher returns is feasible, and the AI can recommend an investment strategy. However, until you ask for diversification and portfolio stability, the chances are that your AI advisor will skip Corporate Bonds and SDIs. This is because their evaluation requires deeper due diligence, legal vetting, and deal structuring, which go beyond algorithmic models.

B. Grip Picks, AI Doesn’t: Human-Curated Fixed Income Opportunities

Platforms like Grip Invest rely on in-house experts to identify fixed income deals that balance yield and risk. These aren’t mass-market products: they are handpicked based on credit analysis, asset backing, cash flow stability, and promoter credibility (such as Grip Invest corporate bonds). AI lacks the contextual intelligence and market relationships needed to surface such high-quality opportunities. 

C. Some Investments Need More Than Algorithms

Even though assessment of historical trends can help you make an informed decision, long-term investing is more than just trend analysis. Different investment options, such as involving unlisted debt, asset leasing, or revenue-sharing deals, need human judgment. Understanding borrower intent, negotiating terms, and evaluating exit strategies require a level of discernment that AI doesn’t yet possess. In the future, there will be more elaborate debates on human vs AI investing, and this factor shall be a critical argument for human advisors.

Also Read: Financial Advice From Social Media Influencers: Scam Or Legit? 

Conclusion

We are all about adopting the latest technologies and investing in AI tools. AI is undoubtedly transforming how Indians manage their money: offering speed, efficiency, and round-the-clock access. But when it comes to nuanced financial planning, emotional intelligence, and niche investments like bonds and Securitised Debt Instruments (SDIs), human advisors still hold the upper hand. Rather than replacing them, AI is best seen as a complement. The future of financial advisory in India is not human or machine: it’s both, working smarter together. To learn more about the evolving financial landscape and new fixed income opportunities, sign up on Grip Invest today.

References:

1. Fortune India. Accessed from: https://www.fortuneindia.com/personal-finance/banking/rbi-panel-highlights-low-ai-adoption-in-the-financial-sector-warns-digital-gap-could-widen/125719

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