Zerodha co-founder Nithin Kamath has raised concerns about the persistent tendency of Indian investors to fall for unsuitable financial products, even as access to financial education and digital information tools has expanded dramatically. In a post on social media platform X, Kamath argued that the problem is no longer one of information scarcity — it is one of repeated, predictable behaviour.

The Core Concern

Kamath pointed to a pattern he described as strikingly uncreative in its consistency. "When it comes to personal finance, people somehow keep making the same mistakes over and over again. There's very little creativity in the mistakes people make," he wrote. Despite a massive rise in first-time investors entering mutual funds, stocks, and insurance products in India, many continue to repeat the same financial errors year after year, according to him.

ULIPs and Endowment Plans in the Crosshairs

The Zerodha co-founder specifically criticised the continued popularity of Unit Linked Insurance Plans (ULIPs) and traditional endowment insurance policies — products that financial planners and investment experts have long flagged as poor value propositions for most retail investors. "Pretty much every influencer, every serious finance writer, and the financial media have been screaming for years: don't mix insurance with investments. ULIPs are usually a bad idea. Endowment policies are usually a bad idea," Kamath wrote. He added: "And yet, ULIP sales continue to grow and endowment plans continue to be sold. People continue to fall for the same pitches, despite all the articles, videos, and excel sheets explaining why these products are bad."

Information Is No Longer the Barrier

Kamath argued that the era of information asymmetry between product sellers and buyers is effectively over. Investors today have access to online comparison tools, detailed policy disclosures, and AI platforms capable of breaking down complex financial products in plain language. "Even a cursory Google search will tell you the problem. And today, in 2026, you can just ask ChatGPT or Claude whether a product is a good idea, and they'll usually show you the math," he said. This framing shifts the blame away from a lack of awareness and toward deeper behavioural and structural factors — including aggressive distribution networks that incentivise the sale of high-commission products.

The Broader Pattern

This comes amid a broader debate in India's personal finance ecosystem about the role of commission-driven distribution in perpetuating the sale of products that critics argue serve sellers more than buyers. ULIPs and endowment plans have historically carried high charges and opaque fee structures, making them difficult for retail investors to evaluate without independent guidance. Regulatory bodies including the Insurance Regulatory and Development Authority of India (IRDAI) have introduced disclosure norms in recent years, but awareness campaigns have not yet fully translated into changed purchasing behaviour, according to industry observers. Kamath's remarks are notable given Zerodha's position as India's largest retail stockbroker by active clients, giving his commentary on investor behaviour a degree of market authority.

What This Signals

The persistence of these patterns suggests that behavioural nudges and awareness alone may not be sufficient to redirect investor choices. With AI-powered financial tools now widely accessible, the gap between available guidance and actual purchasing decisions is narrowing — and the question of why that gap persists is increasingly urgent for regulators, distributors, and investors alike.