The opportunity is striking because the country has already built the digital infrastructure needed to bring millions of people into the financial system. India has more than 550 million active UPI users, but only around 62 million individuals invest in mutual funds and approximately 50 million actively participate in equity markets.
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The gap suggests that the next phase of India's financial journey may not be about access alone. It will be about converting financially connected savers into informed, long-term investors.The next investor is coming from beyond metros
The report identifies a much broader pool of potential investors, including salaried households in Tier-2 and Tier-3 cities, women, young professionals, Gen Z investors and emerging affluent households.
The shift is already visible. Cities beyond India's top 110 contributed 12% of mutual fund AUM in FY25, while districts beyond the top 10 accounted for 70% of NSE-registered investors trading during the year. Investors below 30 accounted for 38% of the investor base in June 2026, up from 23% in FY19.
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The change is also visible in investing behaviour. SIPs now account for 35% of individual mutual fund AUM, compared with 19% in FY19. The report says micro-SIPs and a wider distribution network are helping bring first-time and underserved investors into the market.Pratik Shah, National Financial Services Leader, EY India, said, “India's first financial revolution was about connecting citizens to the financial system. The next one will be about connecting households to wealth creation.”
Access alone will not create wealth
For the next 100 million investors, simply opening accounts may not be enough. The report highlights a different challenge: many households remain hesitant because investment products can appear complex, volatile or difficult to evaluate.
That makes guidance, suitability and investor education increasingly important. The report argues that sustainable wealth creation requires investors to start early, invest consistently, understand risk and remain invested through market cycles.
There are risks to a rapid expansion in participation too. A wider product universe can make it harder for new investors to assess suitability, while market volatility and behavioural biases can disrupt long-term investing. The report also stresses that technology and AI must be deployed with transparency, accountability and investor protection.
EY proposes a “Wealth Stack” combining digital identity, payments, financial data, AI-enabled intelligence, scalable advice and trust frameworks. Vishal Madia, Partner, Wealth and Asset Management, EY India, said, “India has successfully built the digital infrastructure for financial access; the next opportunity is to build the infrastructure for wealth creation.”
The report estimates that individual mutual fund AUM could exceed US$3 trillion over the next decade, while individual direct equity holdings could reach US$2.5 trillion to US$3 trillion. But it says the real measure of progress should go beyond account openings and AUM to investor persistence, diversification, financial resilience and long-term wealth outcomes.
Disclaimer: This article has been written by Sakshi Kumari, who is not a SEBI-registered Research Analyst or an Investment Adviser. Sakshi Kumari and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
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