AI threat to financial advisors? It may make money advice cheaper, but what about jobs — EY report answers

AI could democratise financial advice, bringing it to diverse investors across India, including women and younger generations. But what does it mean for the jobs of traditional advisors? A recent report answers that crucial question.

High-quality financial advice has traditionally been accessible mainly to affluent investors. Personalised portfolio planning, regular monitoring and financial guidance based on each individual's risk tolerance and goals, require significant human effort, making such services expensive for smaller investors.

But, artificial intelligence (AI) could change this model by reducing the cost of providing personalised financial advice. This could make tailored investment guidance more accessible to a much wider pool of investors across the country, according to a recent report by EY India.

Why could AI matter as more Indians start investing?

AI could be particularly important in India as more people from different income groups, cities, professions and age groups start investing. This growth is also spreading beyond metros to Tier-2 and Tier-3 cities.

Women are also becoming a larger part of the investor base, while younger people are beginning their investment journey earlier than previous generations. This growing and diverse investor base could increase the need for affordable, personalised financial advice.

The report estimates that India could bring more than 100 million additional individuals into long-term investing by 2035, with smaller-city households, women, young professionals and Gen Z among the groups that could contribute to this broader participation.

It also says that achieving that level of participation would depend not only on bringing more people into the investment ecosystem, but also on helping them remain invested and build wealth over the long term. This is where AI can play a crucial role by providing new-age investors with personalised investment advice, something tradional advisors have typically offered only for a fee.