Why India’s financial advice must focus on problems, not products
For many Indians, financial advice still begins with a product: a mutual fund, an insurance policy, a fixed deposit. That approach often leaves real needs—retirement security, unexpected health costs, funding a child’s education—poorly addressed. Shifting from a product-centric to a problem-centric model means starting with people’s goals and constraints, then building a plan that solves specific life problems rather than selling a pre-packaged solution.
What does problem-centric financial planning look like?
A problem-centric planner asks questions first. What are your short- and long-term goals? How stable is your income? What risks keep you awake at night? Answers guide a tailored plan that may include a mix of savings, insurance, investments, tax strategies and behavioral nudges.
- Goal-based advice: Invest and save to meet clearly defined outcomes — home purchase, retirement corpus, emergency fund.
- Risk-first approach: Identify and mitigate vulnerabilities such as health expenses, loss of income, or inflation.
- Cashflow and tax planning: Align savings, disposable income and tax strategies to real-life budgets.
- Ongoing review: Plans are updated as life changes — jobs, family, or market shifts.
Why the current product-centric model falls short
Product-driven advice often emphasizes sales targets, commission structures and single-product solutions. That creates several problems for clients in India:
- Mismatched outcomes: Clients may end up with products that don’t align with their goals or timelines.
- Layered complexity: Multiple products sold for overlapping purposes increase cost and confusion.
- Poor transparency: Commission-driven models can obscure true costs and conflicts of interest.
- Under-addressed risks: Important elements like contingency planning, taxation and estate planning are often ignored.
Benefits of a problem-centric approach
Putting problems first leads to clearer, more useful financial outcomes:
- Better alignment with goals: Solutions are chosen to meet specific life objectives, not because they fit a sales quota.
- Cost efficiency: Combining products into coherent plans reduces duplication and unnecessary fees.
- Greater trust and transparency: Advice tied to measurable goals and regular reviews builds client confidence.
- Resilience: Holistic plans better prepare clients for shocks like job loss or medical emergencies.
What needs to change in the industry
Shifting the financial planning culture in India requires action across multiple fronts:
- Advisor incentives: Move from commission-driven pay to fee-based or value-based models that reward outcomes.
- Training and standards: Broader adoption of planning certifications and client-care standards will raise professional quality.
- Tools and technology: Scalable planning software, risk assessment tools and goal-tracking platforms enable personalized plans at lower cost.
- Regulatory support: Clear rules on disclosure, conduct and fee transparency encourage better client outcomes.
- Financial education: Improving basic financial literacy helps clients ask the right questions and demand problem-focused advice.
How fintech and digital platforms can help
Technology makes problem-centric planning viable for more people. Automated advice engines can map goals, calculate savings paths and simulate scenarios. Digital dashboards let clients track progress toward goals such as retirement or education funds. Open-architecture platforms can combine low-cost investments, insurance and tax-efficient instruments to deliver tailored solutions.
Practical steps for advisors and firms
Advisors and firms that want to lead the change should start with a few concrete moves:
- Adopt a discovery-first process: Use structured interviews and goal-mapping tools to understand clients deeply.
- Create modular plans: Build flexible solutions that address specific problems rather than pushing single products.
- Measure outcomes: Track progress against client goals and adjust strategies regularly.
- Be transparent about costs: Clearly show fees, commissions and expected returns so clients can make informed choices.
- Offer behavioral support: Help clients stick to plans through nudges, reminders and periodic reviews.
Real-life examples made simple
Consider three common Indian profiles and how a problem-centric plan helps:
- Young professional: Priorities are emergency savings, debt management and starting a retirement nest egg. A planner suggests an emergency fund, debt payoff schedule and goal-based SIPs rather than selling a single “wealth” product.
- Small business owner: Focus on income stability, business continuity and retirement. Advice blends business contingency plans, appropriate insurance and retirement accounts tailored to cash flow variability.
- Retired couple: Needs predictable income and healthcare cover. A problem-centric plan prioritizes safe income streams, inflation protection and medical expense planning over high-risk instruments.
Challenges to expect
Transitioning won’t be instant. Common hurdles include ingrained product-selling practices, client habits, limited advisor bandwidth and the cost of new tools. Progress will depend on steady changes in compensation models, education and regulatory nudges.
Conclusion
India’s financial landscape is changing — longer lifespans, evolving careers, rising healthcare costs and wider access to markets. To help people navigate those changes, financial planning must move from selling products to solving problems. That shift will make advice more useful, transparent and resilient, and ultimately help more Indians meet the real goals that matter in their lives.