The future of financial guidance

This article is authored by Sanjiv Bajaj, joint chairman & managing director, Bajaj Capital Ltd.

A gentleman walked into our office in his early sixties, a worn folder tucked under his arm, insurance papers, fixed deposit receipts, mutual fund statements he had never quite followed. On one page, in the margin, a handwritten note: For Riya's wedding. He wasn't asking about returns. He was asking: Have I done enough? Will my daughter be okay?

GDP (Shutterstock)

That question, not the numbers, not the benchmarks, is the real business of financial guidance. Right now, as regulators tighten disclosure norms and AI floods households with algorithmically generated advice, it has never been harder to answer it honestly.

Fewer than 3% of Indian households have adequate life insurance coverage relative to their income and liabilities, which means millions of families are one unforeseen event away from financial disruption. A 2023 SEBI Investor Survey found that only 27% of investors have a financial plan extending beyond three years. Record SIP inflows mask a harder truth: most investors cannot articulate the difference between a debt fund and a hybrid fund.

This is not a literacy problem. It is a guidance problem, a structural gap between available information and wisdom that is delivered at the right moment, to the right person. SEBI's new fee-disclosure norms are a welcome step toward transparency. But a disclosed commission does not tell a 34-year-old father in Lucknow whether his term cover is sufficient or whether he is on track to retire with dignity.

Over the past 18 months, a wave of AI-powered financial advisors has entered the market tools that can compare expense ratios, explain NAVs, and generate retirement projections in seconds. Fluent. Confident. And often incomplete in ways that are not immediately visible.

What these systems cannot see is context. They do not know if the person asking the question has just lost a parent, is navigating a job transition, or is quietly carrying financial stress they have not shared with anyone.

Without that context, personalisation becomes an illusion. Every household receives answers that sound tailored, but are built on patterns, not understanding. In financial decisions, that gap matters. A confident answer, delivered at the wrong moment, can do more harm than no answer at all.

I have seen advisors pause decisions that an algorithm would have processed instantly. A client ready to exit an equity SIP after two years of weak performance was asked a simple question: What has changed in your life? The answer was not market-related. It was fear of a potential job loss. The SIP continued. Two years later, it proved to be one of the client’s better decisions.

This is not a case against AI. It is a case for using it where it is strongest in identifying signals while leaving judgment, context, and empathy where they belong: With the advisor.

The future of financial guidance is not reactive waiting for clients to arrive with problems. It is not algorithmic processing queries without context. It is Life-Stage Intelligence: Understanding where a person is in their life, not just their portfolio and initiating the right conversation before they know they need it.

A young couple welcomes their first child. Before questions about term cover form, a conversation is already underway about the next eighteen years. A client approaching retirement is walking through the emotional and practical architecture of moving from earning to living because that transition is not just financial. It is existential.

This is where AI earns its place: Not replacing human judgment, but helping advisors see patterns earlier, reach clients faster, and show up with better questions. AI flags that a client's SIP has paused and their policy renewal is overdue. The advisor decides what it means. That is the right division of labour.

In a world of abundant information and instant comparison, one thing remains irreplaceable: the advisor who remembered what the client said three months ago. Who called not because a product was due but because a person mattered. The gentleman with the folder his daughter did get married. The advisor was there. Not as a vendor, but as someone who had been part of that journey. That story will not appear in any performance chart. But it is the standard against which every innovation in financial guidance must be measured.

The future of financial guidance will not be defined by who has the best algorithm, but by who understands the client before the question is asked.

This article is authored by Sanjiv Bajaj, joint chairman & managing director, Bajaj Capital Ltd.