ETMarkets Smart Talk| A ₹25,000 monthly SIP can grow to ₹2.17 crore in 15 years—with a 10% annual step-up: Jeet Marwadi

A disciplined SIP strategy, combined with annual increases in contributions, can make a significant difference to long-term wealth creation.

A monthly SIP of ₹25,000, stepped up by 10% every year, could grow to approximately ₹2.17 crore over 15 years, assuming annual returns of 12%. But building wealth goes beyond choosing the right mutual funds.

In an interview with Kshitij Anand of ETMarkets, Jeet Marwadi, Founder and Managing Director of 1 Finance, explains why reviewing loans, insurance, expenses and savings decisions can be just as important as investment selection—and why investors should seek financial advice early in their wealth journey. Edited Excerpts -


Q) Retail investors often believe a financial advisor’s job is to help them pick the right mutual funds or stocks. What additional value can personalised financial advice deliver to an ordinary investor?

A) Picking the right mutual funds is the last step in the advisory process. For those investors whose primary occupation is not investing or trading, the right approach begins with assessing their entire balance sheet. The balance sheet, along with cash flows allow the advisors to map leakages in their finances.

For example, when the investor is paying premiums in endowment policies that do not yield returns that even beat inflation post tax, or when the investor has home loans at higher rate of interest than their debt investments, they end up costing the individual more money.

In our study titled The Value of Personalized Advice we have identified 1.5% to 3% of annualized value on net worth added by a qualified advisor net of fees. The study discusses the framework defining four dimensions where value of advice is delivered:

● Course Correction - identifying leakages that costs the individual money today, tax inefficient investments, and savings
● Goal Planning - identifying timelines of hard non-negotiable goals such as retirement and kids education
● Behavioral Coaching - getting the big decisions right which have long term and sometimes irreversible consequences
● Continuous Monitoring - tracking and rebalancing of portfolios, nominations, life events & transitions

Q) For a retail investor investing ₹10,000–₹25,000 a month through SIPs, is paying separately for financial advice worth it? At what stage of their wealth journey should they consider it? How much corpus can they accumulate in 15 years?

A) Yes, and earlier than most people think. The value of advice does not depend on portfolio size; it comes from the whole balance sheet. At ₹10,000–25,000 a month, the SIP is rarely the biggest lever. The home loan, the insurance policies bought from a relative, EPF and NPS contributions and the savings rate usually matter more.

On corpus, assuming 12% annual returns over 15 years: ₹10,000 a month (₹18 lakh invested) grows to about ₹50 lakh, and ₹25,000 a month (₹45 lakh invested) to about ₹1.26 crore. Step up the SIP by 10% every year and these become roughly ₹87 lakh and ₹2.17 crore. That one decision is worth more than any fund selection. The reverse also holds: a 1% higher expense ratio costs about ₹11 lakh on the ₹25,000 SIP, and pausing it for two years early on, say to absorb a new EMI, costs about ₹25 lakh.

The right time to take advice is before the first irreversible decision: buying a home, taking a large loan, buying life insurance or planning for a child. Avoiding one mistake at that stage pays for years of advice.

Q) The report highlights how reviewing insurance policies, reducing fund expenses and closing expensive debt can improve a household's finances. What are the most common financial leaks retail investors should look for?

A) In our client work the leaks are rarely exotic, and the same ones repeat across cities and income levels.
Insurance bought as investment: endowment and money-back policies that do not beat inflation post tax, while the family stays underinsured. One household in our study held four such policies giving just ₹16 lakh of life cover against a ₹1.65 crore home loan.

Fund clutter: investors confuse more schemes with diversification. We regularly see 30 to 70 schemes with overlap upwards of 40%, the same stocks bought several times over at higher blended expense ratios. In two households, consolidating to 6–8 funds cut portfolio TER from 1.32% to 0.71% and from 1.75% to 0.74%.

Expensive debt next to idle money: credit cards, overdrafts at 12% and loans for consumption and lifestyle, while fixed deposits in the same household earn 4.5% post tax.

Ignoring tax-efficient retirement savings: EPF, VPF, PPF and NPS offer superior post-tax returns towards retirement, yet are under-used in favour of fully taxable products. Our own analysis shows the cost: take ₹10,000 a month for 30 years at the same 10% return, for an employee in the 30% tax bracket.

Routed through corporate NPS under Section 80CCD(2), the full ₹10,000 is invested; put into an equity fund from post-tax salary, only ₹7,000 is. After exit taxes, NPS comes out roughly ₹72 lakh ahead, and still pays a pension.

Missing paperwork: outdated nominations and no will cost nothing day to day, but can lock a surviving spouse out of the family's own money for years.

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Q) How can an investor determine whether they are overpaying for financial products or holding investments that no longer serve their goals?

A) Ask three questions of every product you hold: which goal is this for, what does it cost me every year, and would I buy it today? A product that cannot be mapped to a goal is a leak.

Then look for the costs statements that tend to hide. Compare your regular plan's expense ratio with the direct plan of the same fund; the difference is the commission you pay every year.

For traditional life policies, check the first-year commissions and charges: in some plans a third or more of the first year's premium goes to distribution, not to your corpus. Run a fund overlap check, and compare every loan rate with what your debt investments earn post tax.

Finally, check the gaps alongside the costs. Is your life cover enough to clear your loans and fund your children's goals, and is your health cover adequate for a hospitalisation at today's prices?

Q) If markets fall sharply tomorrow, what practical steps should a retail investor take before deciding whether to sell, hold or invest more?

A) First, check that the plan was built for this. Prudent financial planning keeps an emergency fund covering 6–12 months of expenses and keeps money for goals due in the next 2–3 years out of equity. With that in place, a sharp fall never forces a sale.

Second, look at the goal, not the NAV. Equity meant for retirement 15 years away does not need to be sold because of a fall this month.

Third, rebalance to your target allocation instead of reacting. If equity has fallen below target, that is the signal to add, not to exit.

Above all, do not stop the SIP. Compounding rewards time in the market; timing the market is not an effective strategy. In our study, the most valuable intervention for one family was preventing a two-year SIP pause, which would have cost more than any fund switch could ever recover.

Q) Comprehensive financial planning is often associated with wealthy families. Can retail investors with relatively modest portfolios benefit from it, and what should they expect to receive for the fee?

A) This is a misconception. A one-time financial plan costs ₹10,000–25,000, a modest fee against the value it generates for an individual or a household. Our study found a value-to-fee ratio of 11:1 to 20:1: every rupee of fee delivered ₹11 to ₹20 of financial value. Compare that with products that charge 0.5% to 2% a year, deducted from the investment itself. At 1%, a ₹5 lakh investment pays ₹5,000 every year, whether or not any advice comes with it.

For the fee, an investor should expect a review of their full balance sheet and cash flows, a list of leaks to fix, every goal mapped to a timeline and a funding source, insurance and loan recommendations, and an investment plan built on a few low-cost funds. What they should not get is a product pitch: a fiduciary, fee-based advisor earns nothing from what the client buys.

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Q) Can avoiding panic selling, unnecessary fund switches and expensive financial products add more value to an investor's wealth than chasing higher returns?

A) Yes, and this is the most critical takeaway across the financial planning and advisory profession worldwide. Investors chase an extra 1–2% of returns, but the largest losses come from behaviour: selling in a fall, stopping a SIP, switching funds after a bad year, or making a big purchase on emotion.

The industry's own data shows how common this is. LIC's 61st-month persistency by number of policies was 49% for April–December 2025, meaning roughly half its policies did not survive five years. In 2025-26, life insurers paid more on premature surrenders (about ₹2.8 lakh crore) than on maturities (₹2.69 lakh crore).

Mutual funds show the same pattern: in May 2026, 95 SIPs were stopped or completed for every 100 new ones registered, and the ratio was still 78.5% in September. Products bought without a plan are abandoned before they get a chance to compound.

This matters because compounding is back-loaded. Someone with a ₹1 crore net worth should keep the investable portfolio in place for at least 7 years, ideally 10 or more.

At 12%, ₹1 crore grows to about ₹1.76 crore in five years, ₹3.1 crore in ten and ₹5.5 crore in fifteen; the last five years add three times as much as the first five. Exit early and you keep the volatility but give up the compounding.

Our study bears this out. Behavioural coaching was the single largest source of value in every household we examined, adding 91 to 169 basis points of net worth a year, more than fund changes or cost cuts.

For one Mumbai family, the most valuable advice was not to buy a ₹2.2 crore home yet: the EMI looked comfortable next to their rent, but the full cost of ownership would have cut their retirement probability to 58%. A fund switch has no value if the investor panics and redeems three years before retirement.

Q) What are the five biggest financial mistakes retail investors can correct today with proper advice, even without increasing their investments?

A) None of these require investing a rupee more.

Stop treating insurance as investment: replace endowment and money-back premiums with a term plan, and invest the difference.

Consolidate the fund portfolio: replace dozens of overlapping schemes with 6–8 direct funds, each mapped to a goal.

Close expensive debt first: use idle FDs and savings to clear credit card dues, overdrafts and consumption loans.

Use tax-efficient structures: maximise EPF, VPF, PPF and NPS, choose the right tax regime, and plan holdings across both spouses.

Get the paperwork in order: write a will, update nominations across every account, and make sure health and term cover are adequate.

(Disclaimer: The reporter was invited to the event. Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)