10 key financial planning trends for year 2026

29 Jan 2026 , 01:02 PM

BIG TRENDS IN FINANCIAL PLANNING IN 2026

Financial planning is about driving your action towards your financial goals; so, what could change in 2026? Actually, quite a lot! There is the much bigger role that technology will play in financial planning in the year 2026. It will also be the year when investors will start seriously looking at asset classes beyond traditional equity and debt. Today, there is a choice available and financial planning will get a wider meaning.

One trend we do see is that the “Retire Early” crowd is going to increase. After all, with rising pressures and uncertainty, most people want to call it a day, if they can afford it. But the biggest of the shifts will be the great wealth transfer that will happen in India and the world over the next few years. That could really change the face of financial planning; starting 2026. Now for the big trends!

1)    AI WILL MOVE TO CENTRE-STAGE OF FINANCIAL PLANNING

Artificial intelligence is about making machines more intelligent and helping them use judgement to make decisions with large data. We are moving towards a situation where the investment world is going to get more complex. Apart from the plethora of options available, there is also the need to mine through multiple data sources to arrive at a more meaningful model for financial planning decisions.

Your financial planner will have to be adequately equipped to make smart use of technology and individuals must look at ways and means of using AI more fruitfully. It is not just about speed, but about sophistication in methodology. Imagine an AI engine that can predict future movement in rates, equity indices, and tax rates and position your asset mix accordingly. That sounds far-fetched, but it is perfectly possible.

2)    MULTIPLE OPTIONS TO MEET GOALS

As of today, the investment options are largely about equity and debt in your financial plan. Equity is for long term wealth creation and debt is for stability and regular income. In between, you have liquid assets for quick cash and gold and silver for hedging. Year 2026 will see the investment options going much beyond that.

We will see a lot more focus in 2026 on passive products and smart-beta products, which are more structured than stock selection. Gold and silver will continue to be a hedge, but will also be seen as growth assets. New investment ideas could be real estate funds, fractional realty ownership, SME investment platforms etc. Private credit may be open to HNIs and family offices, but we could have funds to give access to private credit; a debt instrument with returns in mid-teens. Year 2026 will see expansion of asset options.

3)    GREATER FOCUS ON STRATEGY IN TRADITIONAL INVESTING

While new asset classes will make an entry in 2026, traditional assets like equity, debt, IPOs, ETFs etc are not going anywhere. However, we could see more of specific smart strategies being deployed to enhance returns. Sectoral rotation may be one way to approach equities. That is more about a structured and proactive way to take sectoral positions.

Similarly balancing themes like growth, value, and dividend yield could be another way of addressing traditional asset classes. Investors may also look at actively rebalancing their holdings without losing out on the long-term flavor. In short, there will be a lot more of strategic content in traditional investment decision making in 2026.

4)    ETHICAL INVESTING MOVES FROM PERIPHERAL TO CORE

In India, ESG investment is well-known although it is yet to pick up in a big way as a strategy. In the coming year, we are likely to increasingly see people insisting that their investments match up with their value systems. For instance, investments in cigarette, liquor, and gambling companies could be taboo.

There are investors who are not too comfortable investing in companies that employ child labour or are cruel to animals. Fair treatment of employees and gender diversity could be another theme. Environment consciousness could hold the key. In short, the focus will be more on aligning their long-term wealth with their value systems.

5)    FINANCIAL INDEPENDENCE, RETIRE EARLY (FIRE)

FIRE or saving aggressively to retire early, is taking off in a big way. In many cases, that may not be feasible, but will become an important theme for people planning their personal finances. People no longer want to work till the age of 60. Instead, they want to work up to 45, create a nest egg, get rid of debt, and move on to doing things they really love to do.

There could be many a slip between the cup and the lip, but that is something that is starting off in a big way. If people can afford it, there is no way they are not going to plump for the FIRE offer. That entails debt reduction, big savings, and delaying gratification. But most people feel FIRE is worth it.

6)    SHIFT TO ONE-STOP FINANCIAL PLANNING SUPERMARKETS

Today, investors want the financial planner to play a much bigger and comprehensive role. It is not enough to just make a plan and allocate assets. In year 2026, the financial planner will be expected to personalize solutions a lot more, advise people on debt reduction, liquidity management and insurance planning.

In addition, they also want the planner to offer more granular support for specific goals like retirement, funding their child’s education, planning for their wedding, buying a holiday home. It means that financial planners also need to equip themselves with the necessary skill sets to be able to provide a one-stop super market.

7)    DEBT MANAGEMENT WILL BE CRUCIAL IN 2026

Young India has got into a mountain of debt. Indians still do not have student debt to the extent other countries have, but there are other forms of debt that are rising. In the last few years, banks and NBFCs have focused on consumer lending and Indians have lapped up loans at fairly high rates of interest. Gold loans are another big factor in rising debt.

Then, there is the big spending spree that young people indulge in. Most of these spends do not create assets but just create long-term burdensome liabilities and financial risk. That is something that must be addressed urgently. Increasingly, we could see a sense of urgency in addressing the debt issue among young Indians. That will be a positive move.

8)    BIG WEALTH TRANSFER WILL START IN 2026

In 2025,  UBS projected that nearly $83 Trillion of wealth will be transferred to the next generation in next 20 years. Millennials and Gen-Z are likely to see a massive growth in their wealth starting 2026, much of which will be inherited. This is not only true for the well-heeled parents but scores of middle-class families too. India will also see billions moving.

Starting 2026, financial planners will have to closely work with individuals on managing a tax-efficient transition of wealth, ensuring that such wealth is put to good use, making investments count, and ensuring that the risk of such assets is well managed and hedged. That trend will trigger off in a big way in 2026.

9)    OPENING UP OF THE PRIVATE CREDIT MARKETS

This market may not be directly accessible to small investors but there will be funds to give indirect access. This is a debt product that needs adequate research but can offer returns of 13%-15% on an average. That would make debt as attractive as long term equities. That would open up an entirely new asset class. Year 2026 could see small investors getting access to private credit, private placements, and private funds; albeit indirectly.

10)           FINALLY, GET READY FOR A NEW BANKING EXPERIENCE

If you thought that your banker will still  be the traditional banker, think again. We are seeing the new era of embedded finance with major implications for financial planning. Today, there are NBFCs that are as big as banks. Then there are digital wallets that do all  the work that a bank does.

P2P lending has replaced bank lending for a lot of small and medium sized borrowers. Financial transactions and banking will no longer be the exclusive preserve of banks. Less regulated entities handling financial transactions will have convenience and risks too.  Financial planning has to prepare for that!

 

LLM Summary Year 2026 is likely to see some subtle, yet critical, shifts in financial planning. We are moving into a multiple assets model. There will be more choice, and more complexity. That will also mean; artificial intelligence will play a bigger role in making the choice. Year 2026 will see new asset classes and new approaches to financial planning. Private debt and smart beta will become part of the financial planning lexicon. There will also be greater focus on balancing equity strategies, debt strategies, and portfolio rebalancing. Financial planning will also throw a puzzle in 2026. We are seeing rising indebtedness. At the same time, we will also see the urge to retire early. The challenge in 2026 will be how to manage this dichotomy between debt burden and early retirement. The good news is that Young India is going to inherit a lot of money and wealth from their parents, including physical and financial assets. The challenge will be to have a strategy to grow this wealth across generations and consolidate the gains.