Financial Strategies When You Are In Your 30
Investing
Jun 14, 2023
India has solved access to financial markets faster than almost any country. It has not solved advice. 1 Finance’s 2026 research report on the value of personalised financial advice closes with 2 people who see this gap from very different seats: Navneet Munot, MD and CEO of HDFC Asset Management Company, and Soumya Rajan, founder and CEO of Waterfield Advisors, a fee-only advisory firm.
The numbers behind the gap
| Measure | Figure |
|---|---|
| Demat accounts | 20 crore, crossed in August 2025 |
| Mutual fund folios | 27.06 crore, AMFI data for February 2026 |
| Mutual fund distributors | Over 2 lakh, per AMFI’s 2047 vision paper |
| Investment advisers on SEBI’s recognised intermediary list | 993, as of late March 2026 |
Even allowing for investors with several accounts and folios, the ratio is stark. Rajan calls it “scaling without judgment”: market access has grown far faster than fiduciary advice. Product distribution is easier to scale, explain and monetise. Advice needs documented suitability, client agreements, ongoing reviews and a willingness to charge upfront for judgement.
Navneet Munot: from KYC to UYC
Munot spent close to 3 decades on the investment side before running HDFC AMC from 2021. His view on where investor returns go wrong is consistent: the gap between a fund’s return and an investor’s return is behavioural. It opens when investors react to short-term volatility.
His prescriptions for the distribution system:
- UYC, not just KYC. Understand your customer: what the family is saving for and how it will behave when markets fall. That means hand-holding first-time investors, regular check-ins and guidance at life milestones.
- Advise the family, not the individual. Financial decisions in many Indian households are collective, so the guide has to be someone the whole family trusts.
- Many more advisors. India needs several times today’s number, trained in behaviour as well as products, and equipped with digital and AI tools.
On SIPs versus lump sums, he describes a SIP as a decision taken once, when the investor is calm, that then runs on its own. That is why SIP flows hold up when markets fall. In March 2026, when Middle East tensions pushed oil up and markets corrected, SIP contributions still crossed ₹30,000 crore. Lump sums, he suggests, work best as additions to an existing SIP when markets correct.
He uses HDFC’s own silver fund as a warning about recency bias. Launched in 2022 when silver was around $18 an ounce, it collected ₹20 crore. By the time silver reached $90, people were queuing to buy. Allocation, he argues, should never be driven by recent returns, and a trusted advisor is best placed to say so.
If he could add 1 habit to every distributor, it would be UYC. The 1 he would remove: recommending a fund because it has done well recently. On a morning when the market is down 10%, he wants advisors to call clients first, listen, and then remind them of the goal and the horizon.
Soumya Rajan: the cost of conflicted advice
Rajan left Standard Chartered in 2010 and founded Waterfield in 2011, charging clients directly and taking no commissions, at a time when the industry was almost entirely distributor-led. Her reasoning: advice cannot be truly objective if its economics depend on what gets sold.
In the early years, clients often said an advisory fee meant paying a “double layer of fees”. SEBI’s investment adviser regulations, introduced in 2013, made the difference between embedded costs and explicit fees clearer.
The long-run cost of mixing the 2 models, she argues, shows up as needless complexity, duplicated exposures and persistent cost leakage. She cites a listed-company promoter family paying ₹4 crore to ₹5 crore a year in fees on a largely fixed-income portfolio, with no single point of accountability for construction or risk.
On wealthy clients, her view is that wealth raises the stakes of behavioural mistakes rather than removing them. Overconfidence in rising markets, panic in drawdowns and liquidity decisions made without reference to long-term obligations all persist at the top. Her example: a founder whose company is listed on Nasdaq, with 80% to 90% of net worth in 1 stock. Sell too fast and value is destroyed; wait too long and the concentration becomes existential. The advisor’s job is to sequence the decision: how much, when, in which jurisdiction, with what tax and in what estate structure.
When a business exit, inheritance or health event arrives without an advisor already in place, she says, what is missing is rarely intelligence. It is architecture: no investment policy, no ownership map, no liquidity framework and no estate structure robust enough to survive stress.
8 changes Rajan says India needs
| Area | Proposal |
|---|---|
| Awareness | A campaign for registered advice along the lines of “Mutual Fund Sahi Hai” |
| Digital infrastructure | Standard, regulator-aligned tools for risk profiling, suitability, documentation and reviews |
| Talent | Training beyond products, covering planning, behavioural finance, estate structuring and ethics, plus apprenticeships |
| Distributor transition | Practical support for distributors moving to the fiduciary RIA model |
| Proportionate compliance | Lighter requirements for solo and small RIAs serving fewer clients |
| Investor transition | Let investors switch from a distributor code to an advisory direct plan without it being treated as a redemption and a taxable event |
| Fixed fee cap | Raise the maximum fixed fee, currently about ₹1.5 lakh per client a year |
| Fee flexibility | Allow tailored, performance-based or multi-year fee arrangements by mutual consent |
She calls the investor-transition problem perhaps the single biggest hurdle for the industry today. A family that wants to move from commission-based to fee-based advice can face capital gains tax simply for switching plans of the same fund.
What this means for you
- Know which model you are in. A distributor is paid through commissions built into regular plans. A SEBI-registered investment adviser (RIA) charges you a fee directly and recommends direct plans.
- Check registration. Every RIA has a SEBI registration number, which you can verify on SEBI’s list of recognised intermediaries.
- Ask what the advice covers. Investments are 1 of 6 areas of a financial life, alongside tax, insurance, debt, cash flow and estate planning.
- Plan the switch carefully. Moving from regular to direct plans can trigger capital gains tax and exit loads, so the timing should be planned rather than done in 1 go.
Source: 1 Finance, What personalised financial advice is actually worth, 2026 research report, including interviews with Navneet Munot and Soumya Rajan. Their views are their own. Figures are as cited in the report.
