🪺 Nest Finance · Research & Thesis · v1

Why India still trusts a human with its money

Apps made investing a few taps. So why do 7 in 10 rupees going into equity funds still come through a person — and what happens when AI can do everything except the trust?

A working thesis · September 2026

Apps like Groww and Zerodha have made investing easy. Anyone can buy a mutual fund, an ETF or an insurance policy in a few taps. Yet about 7 in 10 rupees going into equity mutual funds still come through a person, not an app.

That's because an app can do the investing, but it can't tell you what to buy. Apps show recommendations, but when it comes to money, Indians trust humans. Usually it's someone smart in their local community whom they call "my financial advisor."

What MFDs actually do

MFDs mainly do two things:

1. Help families decide what to buy, and stay invested. They're the trusted voice who says "don't sell" when markets crash. This is why clients stay with them for decades.
2. Handle everything around the investment. Sign-ups, ID checks, research, portfolio reports, insurance forms, tracking commissions, answering questions, follow-ups.

The first is the real value. The second eats most of their week.

Nest is an AI-native Prudent

We give India's MFDs an AI-powered back office, so they can remain the trusted face for their clients and let AI do the rest.

Today, big networks like Prudent and NJ provide this back office — but with branches across the country, large teams and human relationship managers. They keep a big share of the MFD's income in return.

Prudent: how big this can get

Prudent started in 2000 and launched its MFD network in 2006.

Prudent listed in May 2022 at ₹630 a share; it traded around ₹2,860 in July 2026. Last quarter it earned ₹348 crore — about ₹190 crore went to its MFDs and ₹75 crore was profit, up 44% in a year. It has also started buying MFD businesses (Karvy's fund business in 2021; Indus Capital — ₹2,030 crore of client money — for ₹124 crore in 2025) and is already moving on AI with a tool for its MFDs.

NJ: how it grew

In 1994, two fresh graduates in Surat — Neeraj Choksi and Jignesh Desai — started selling mutual funds. Early on, they recruited insurance agents standing outside LIC offices and trained them to sell funds.

Its commissions earned grew ₹443 crore (FY17) → ₹874 crore (FY21) → ₹1,300 crore (FY22). Today it reports over 56,900 MFDs in its network, according to NJ.

What AI can now do

Everything in "job 2" can now be handled by AI. The trust — job 1 — stays human.

Why now

The pay cut. In April 2026, SEBI's new commission rules (replacing TER with BER/SER and separating out GST) cut many smaller distributors' take-home by around 15% — hitting the smallest, non-registered MFDs hardest. They're looking for a better deal.

The technology. AI can finally do the back-office work well — and even Prudent has started building AI tools, so the race has begun.

The gap. India has about 1.8 lakh individual MFDs, but only about 13,000 run a serious business. The rest need help to grow.

Why Nest wins

MFDs pay twice today. Prudent and NJ keep a share of their commission — mainly for research, licences and the platform. On top of that, MFDs pay for their own staff to handle client calls and servicing, which the networks don't really cover. Nest fixes both.

And when MFDs retire, we can buy their businesses — just like Prudent does — and run them with AI.

Who we're looking for

This is a starting point, not a decision. If you think it's wrong, or you'd build it differently, that's the conversation I want — not a reason to stay quiet.