This article is authored by Dr. Mohit Pathak, Assistant Professor of Finance and Accounting at IMI Kolkata.
Wealth management is undergoing a digital revolution, and robo-advisors are at the forefront. These automated, algorithm-driven platforms build and rebalance portfolios for investors, often using modern portfolio theory. In plain terms, robo-advisors let you input your goals and risk tolerance, then automatically create a diversified mix of stocks, bonds, mutual funds, ETFs, etc., and adjust it over time. They democratize investing by eliminating human intermediaries, charge very low fees compared to traditional advisors, accept investment of small token sizes, and are accessible via smartphone or web 24*7, making them ideal for young or new investors.
Clients simply fill out an online questionnaire about their age, goals and risk appetite; the robo-advisor then maps this profile to a model portfolio. The system even automatically rebalances the portfolio as markets move – so the target asset mix stays on track without the investor lifting a finger.
Globally, robo-advisors have grown rapidly. Industry reports note that robo-platforms worldwide now oversee over $1 trillion in client assets. Adoption is strongest in the US and Europe, but India is catching up fast. Indian wealth is surging: a recent Deloitte report estimated that India’s investible financial wealth held by affluent households was about $1.1 trillion in fiscal 2024 and is projected to double by FY29. However, approximately $0.4 trillion of that wealth was still self-managed or informally managed, representing a substantial untapped market for professional advice. In other words, millions of new investors are ready to move from chit funds into formal channels.
Robo-advisory is growing faster than the overall wealth industry. A recent market analysis by Grand View Research found India’s robo-advisory revenue was only about $220.8 million in 2022 but is forecast to grow to $2,153.1 million by 2030 (a 33.4% CAGR). One industry report predicted Indian wealth-management assets (across banks, mutual funds, private advisors, etc.) will grow from about $1.1 trillion in FY24 to $2.3 trillion by FY29.
The robo-advisor niche, though smaller today, is on a steeper growth curve, fuelled by younger investors and technology. In summary, India has hundreds of billions of dollars in wealth that is awaiting advice, and the robo-advisory market is expanding at a rate of more than 30% annually. This gives customers more options and possibly lower prices. For businesses, it means opportunity: digital-first platforms are positioned to overtake traditional advisors in the market.
Several factors in India contribute to the growing popularity of robo-advisors:
Smartphone and Internet penetration: India now has nearly 900 million internet users (over two-thirds of the population), with affordable smartphones in even small towns. This digital boom means investing apps can reach millions directly.
Young, affluent investors: India’s millennial and Gen Z cohorts are earning and saving more than ever, yet they often lack dedicated advisors. These younger investors have grown up with apps and expect on-demand digital solutions – exactly what robo platforms provide.
Cost sensitivity: Indian investors are very fee-conscious. A robo-advisor’s zero or near-zero advisory fees look very attractive by comparison.
Regulatory support for data sharing: New frameworks like the Account Aggregator (AA) system, which was introduced by RBI in 2016, make it easier for investors to securely share their financial data (bank statements, tax data, insurance policies) with third parties. A robo-advisor can pull your data directly from banks or mutual funds (with your consent) to make smarter recommendations.
India’s robo-advisory scene is a mix of pure-play fintechs, hybrid models, and bank-backed platforms:
Fintech start-ups: Homegrown apps such as Kuvera, Scripbox, Upstox, ET Money, and INDmoney offer end-to-end digital advisory. These pure-play platforms allow any investor to open an account online and start investing in mutual funds, stocks or ETFs with robo guidance.
Hybrid models: Some brokers and wealth managers combine algorithms with human support. Zerodha’s Coin, Groww, and Clear started as do-it-yourself (DIY) platforms but now offer robo-like recommendations plus optional advisor calls.
Banks: Traditional banks are integrating robo-advisory into their mobile apps. For instance, Axis Bank’s Invest platform Axis Direct and HDFC Securities’ HDFC Money apps use algorithmic models to suggest portfolios to their existing customers.
Robo-advisors in India are currently subject to SEBI’s Investment Advisers Regulations, 2013. However, those rules were written for human advisors rather than automated algorithms.
SEBI has acknowledged this gap: as far back as 2016 it issued a Consultation Paper on “Amendments/Clarifications to the SEBI (Investment Advisers) Regulations, 2013” which focused on online investment advisory services and use of automated tools. More recently, SEBI has focused on AI and algorithmic accountability. In December 2021, SEBI issued a consultation paper on ‘Algorithmic Trading by Retail Investors,’ expressing concern over unregulated algorithmic trading.
This activity, often facilitated by third-party platforms operating without oversight, prompted SEBI to propose a framework requiring brokers to obtain approval for client-deployed algorithms. The framework also mandates auditing mechanisms and risk checks to detect and control market manipulation.
In November 2024, SEBI issued a consultation paper on “Proposed amendments with respect to assigning responsibility for the use of artificial intelligence tools by Market Infrastructure Institutions, Registered Intermediaries and other persons regulated by SEBI” which proposes that regulated firms be fully responsible for the outputs of any AI/ML tools they deploy.
In other words, if an algorithmic portfolio suggestion turns out badly, the advisor (human or robo) remains accountable to the client. The draft also emphasizes data privacy, security and fiduciary duties in the context of AI.
Regulatory scrutiny of robo-advisory is intensifying. In the coming years, we can expect formal guidelines from SEBI. This will likely mandate rigorous standards across three critical areas: client-facing transparency (requiring explanations of portfolio logic and risk exposure), independent logic audits (validating algorithmic fairness and bias mitigation), and standardised performance reporting (enabling direct comparisons between platforms). Such clarified regulations will ultimately benefit the industry by fostering greater investor trust and protection.
