India’s young investors are entering the financial world earlier than ever before. Teenagers today can open a trading app in minutes, invest through UPI-linked platforms and watch endless “stock market tips” on social media before they even receive their first salary. But experts say the country’s financial literacy ecosystem is still teaching information instead of behaviour – and that gap is becoming increasingly costly.
According to recent SEBI findings, nearly 91% of retail investors in the futures and options (F&O) segment incurred losses in FY25, with total losses crossing Rs 1 lakh crore. Over four years, retail traders collectively lost around Rs 2.87 lakh crore in derivatives trading.
For Hemant Sood, Founder and Managing Director of Findoc Investmart Pvt Ltd, the issue is not merely lack of awareness. It is the absence of behavioural training. “The biggest gap is that we treat financial literacy as information rather than behaviour,” Sood said.
“Schools sometimes teach what a mutual fund is or how compound interest works, but they almost never teach the discipline of waiting, the psychology of regret avoidance, or how to handle money when emotions are running high,” he said.
Sood believes this disconnect explains why many young earners understand financial terms theoretically but still make impulsive money decisions in real life. “A teenager can correctly define inflation in an exam and still spend their first salary on impulse purchases six years later,” he said.
Should financial literacy become a school subject?
As conversations around financial education grow louder, many education experts are pushing for personal finance to become part of India’s school curriculum. Sood supports the idea but believes it should be implemented realistically rather than as an overloaded standalone subject.
“Adding it as a separate full-year subject is unlikely given existing curriculum pressure,” he said. “The more practical path is integrating it as a mandatory module within Mathematics or Social Studies from Class 6 onwards.”
He suggests that financial learning should evolve according to age groups. Younger students should first learn about saving, budgeting, and opportunity cost, while older students should gradually move toward banking, taxation, investing, insurance, and risk management.
“Investing should never be taught before saving. That sequencing failure is what produces a generation that buys into F&O before they have an emergency fund,” he explained.
SEBI officials have repeatedly cautioned retail investors against speculative trading, warning that many investors enter derivatives markets without fully understanding the risks involved.
Fintech’s role: education or engagement?
India’s fintech boom has dramatically increased participation in financial markets, especially among Gen Z users. But Sood argues that many platforms are optimised more for engagement than education. “Most fintech platforms today are designed for transaction velocity, not learning,” he said. “They optimise for clicks per session, not for informed decision-making.”
He believes platforms should slow down the onboarding journey for first-time investors and include mandatory understanding checks before allowing users into high-risk products.
“Show realistic outcome distributions, not just best-case returns,” Sood said. “Display the loss data as prominently as the marketing video.”
The most vulnerable group may not be school students
While financial literacy campaigns often target schoolchildren, Sood believes final-year college students are far more underserved. “These are two completely different audiences requiring two different vocabularies,” he said.
For school students, the focus should remain on building healthy habits through relatable examples like pocket money, mobile recharges, and household expenses. But for college students entering the workforce, the conversations need to become practical and urgent.
“Their first salary is months away,” Sood noted. “The focus needs to be on first-job financial planning, EPF and tax basics, SIPs, the trap of buy-now-pay-later credit, and why F&O is not a path to wealth.”
He warns that many young graduates receive financial advice primarily through influencers, online advertisements, or peer pressure instead of credible guidance. “The 22-year-old about to receive their first paycheque often has nobody guiding them,” he said. “This cohort is where most lifetime wealth-creation mistakes are seeded.”
A long-term cultural shift
Through its upcoming financial literacy initiatives, Findoc plans to conduct college programmes, school bootcamps, and financial awareness competitions across India. The company is also preparing to launch a wealth platform aimed at encouraging small-ticket SIP investments among young users.
“Financial literacy is not a CSR activity for us – it is a moral and commercial imperative,” he said. “An informed retail investor is a sustainable client. An uninformed one is a liability for the entire ecosystem.”
As India witnesses a rapid rise in first-time investors, experts increasingly believe the country’s next big financial challenge will not be access to investing – but understanding it responsibly.