INDUSTRY BACKGROUND

CURRENT SCENARIO OF FINANCIAL MARKET India's economy is on the fulcrum of an ever-increasing growth curve. With positive indicators such as a stable 8 percent annual growth, rising foreign exchange reserves of close to US$ 140 billion, a booming capital market with the popular "Sensex" index topping the majestic 10,000 mark, flowing foreign direct investment (FDI) close to US$ 8 billion, and a more than 20 per cent surge in exports, it is easy to grasp why India is a leading destination for foreign investment. The GDP grew by 7.4 per cent in the first quarter and 6.6 per cent in the second quarter of the current year, compared with 5.3 per cent and 8.6 per cent in the corresponding quarters of the previous year. The Economic Survey 2005-06 estimates that the GDP will grow at 8.1 per cent. Growth of Gross Domestic Product (GDP) at constant prices in excess of 8.0 per cent has been achieved by the economy in only five years of recorded history, and two out of these five are in the last three years

CHANGING SCENARIO Since 1991, there has been a radical change in the Indian economic environment. In the early 90s the country was confronted with a severe crisis due to a sharp plunge in the foreign exchange reserves, a downgrading of the credit rating, suspension of foreign private capital flows and a decline in the industrial output. India was on the verge of defaulting on its foreign debt obligations. The only way was to initiate reforms and a structural adjustment program. The country would have to lift restrictions on foreign investments, on the flow of private capital and on private initiatives in many area of economic development. The structural reforms focused on liberalizing industry, trade, taxation and foreign investment, and on reforming the financial sector. FINANCIAL MARKETS A financial market is a market for creation and exchange of financial assets. If we buy or sell financial assets, we will participate in financial markets in some way or the other. This includes the various instruments for investment contains four attributes essential for an investor for taking investment decision: Yield of the Instrument, Liquidity, Risk Perception, and Initial Investment.

Functions of Financial Markets: Financial markets facilitate price discovery. The continuous interaction among numerous buyers and sellers who through financial markets helps in establishing the prices of financial assets. Financial markets provide liquidity to financial assets. Investors can readily sell their financial assets through the mechanism of financial markets. Financial markets considerably reduce the cost of transaction. Two major costs associated with transaction are search costs and information costs.

WHAT IS AN INVESTMENT? An Investment is the use of capital to create more money through the acquisition of a security that promises the safety of the principal and generates a reasonable return. In Pipeline of Mutual Fund. A company that invests in securities of other companies; using funds acquired by selling shares to investors. A mutual fund is one type of Investment Company. Any purchase that fails to meet the safety and returns criteria is not an investment. It could either be speculation or gambling. For instance, betting or buying lottery tickets could make you lose all your money or give huge unreasonable returns. This is gambling and not an

investment. There is a very thin line differentiating the two and one has to be careful not to cross that line. FUNDAMENTALS OF INVESTMENT:There are three fundamentals of investment, namely: SAFETY LIQUIDITY RETURN TAXATION The order is quite clear: Safety- always first, then the Liquidity- next and Return- third. A lot of people fall prey to the lure of high returns, and usually, this has resulted in a LOSS. INVESTMENT OPTIONS AVAILABLE IN INDIA

There are basically two kinds of investment options available for the investor on the basis of their Risk, Return and time horizon. As per the Return is concern one can earn a fixed rate of interest and other where the rates fluctuate depending on certain factors prevailing in the market at that point of time. Given below are the options available in each category. INVESTMENT AVENUES IN THE LAST DECADES The Indian investors in the last decades were very risky so the saving was focused in high fixed earning investment. Also there were not many investment options and investments with sovereign guarantee were preferred. This was partly due to high interest rates in India

INVESTMENT AVENUES

Investments Investments Mutual fund Mutual fund Small Savings Small Savings Debt Debt RBI Bonds RBI Bonds PPF PPF Post Office Post Office Insurance Insurance Primary Market Primary Market Equity Equity Secondary Market Secondary Market

* Source: www.indiainvest.com Fixed Return Options: 1. 2. 3. 4. 5. 6. 7. 8. 9. Post Office (KVP, NSC, M.I.S.) Public Provident Fund Bank Fixed Deposits Government Securities or Gilts RBI Taxable Bonds Insurance Company Debentures Company Fixed Deposit Infrastructure Bonds 3. 4. 5. Variable Return Options: 1. 2. Mutual Fund Shares and Stock Market o Primary Market (IPO) o Secondary Market Bullion Market (Gold & Silver) Property Foreign Exchange Assets

HISTORY OF THE INDIAN MUTUAL FUND INDUSTRY The Mutual Fund Industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases: First Phase 1964-87: Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase 1987-1993 (Entry of Public Sector Funds): 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while

GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds): With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996 The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds Fourth Phase since February 2003: In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29, 835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The

Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

The graph indicates the growth of Investment in Mutual Fund over the years:

GROWTH IN ASSETS UNDER MANAGEMENT (AUM)

INTRODUCTION OF MUTUAL FUND CONCEPT: A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund: Mutual Fund Operation Flow Chart

What is a mutual fund?

Pooled Vehicle: A mutual fund (MF) is a vehicle to pool money from investors, with a promise that professional managers would invest the money in a particular manner. Professional Managers are expected to honor the promise. Mutual funds in India are governed by the regulations of Securities and Exchange Board of India (SEBI). Professional Management: The idea behind a MF is that investors lack the time and/or the skills to manage their own investments. Professional managers, acting on behalf of the MF, manage the investments for the benefit of investors, in return for a management fee. The organization that manages the investment is the Asset Management Company (AMC). Employees of the AMC who perform this role of managing investments are the Fund Managers. Schemes: Investors have their individual preferences on how they would like their money invested and how much risk they are willing to take. For ease of management and reporting, each a group of investors is identified with a mutual fund scheme. In commercial terminology, the investors have invested in a scheme and the professional managers manage the scheme. A MF has several schemes to cater to different investor preferences.

Money in Trust: The MF manages investments of the scheme for the benefit of its investors. Every scheme has an:

Investment portfolio (Portfolio Statement); Account); And Account of income and expenditure (Revenue

Account of assets and liabilities (Balance Sheet). In order to ensure fameless to investors, the expenditure that can be charged to the scheme, whether as management fees or as other expenses, is regulated by SEBI. The gains of any scheme would belong to its investors. Similarly losses, if any, would need to be borne by its investors up to the amount invested. Thus, the MF manages the moneys in trust for the benefit of investors.

ORGANISATION OF A MUTUAL FUND: There are many entities involved and the diagram below illustrates the organizational set up of a mutual fund:

Unit Holders: Unit holders are Investors. Any Individual or Non- individuals who have invest their money in Mutual Fund; they will get some Units against their Investment according to the NAV of that fund. Sponsor: Sponsor is the promoter of the mutual fund. He himself of with other body corporate establishes the mutual fund. However to became a sponsor one has to have following qualifications?

Sponsor should have sound track record and general reputation of fairness and integrity in all business transactions. He must have carrying business in financial services for a period of not less than five years. And continuously derives the profit after providing for depreciation, interest and tax. Having positive net worth as well. Sponsor has to contribute at least 40 per cent to the net worth of the AMC. Trustee: There are some straight disqualifications provided by the SEBI for a trustee. However the appointment for a trustee must be take prior approval of SEBI. Trustee is a person having ability, integrity and has not been found guilty of moral turpitude and also has not been convicted for any economic offence. Trustee has to play very critical role in the mutual fund organization. He has work in a way to continuously protect the interest of the investors are properly taken care of. Any mutual fund has a minimum of four trustees. Two thirds of the trustees must be an independent person and shall not be associated with sponsor. No officer of employee of an AMC can became a trustee. Investors: MF is a solution for investors who lack the time, and/or the skills to actively manage their investment risk in individual securities. They can delegate this role to the MF, while retaining the right and the obligation to monitor their investments in the scheme having some specific objects.

Asset Management Company (AMC):

AMC can be appointed by the sponsor or by the trustees if authorized by the trust deed. But it is obligatory for all the mutual fund to have a AMC to manage and operate its schemes. Appointment of AMC can be terminated by majority of trustee of 75 per cent of unit holders (investors). AMC manages the investment portfolio of schemes. An AMCs income comes from the management fees it charges to the schemes. The management fee is calculated as a percentage of net assets managed. Some countries provide for performance based management fees as well. In order to earn the management fee, any AMC has to employ people and bear all the establishment costs that are related to its activity, such as for premises, furniture, computers and other assets, software development, communication costs etc. These are to be met out of the management fee earned. Expenses such as on trustee fees, marketing etc. can be directly borne by the mutual fund scheme. However, in some cases, competition in the marketplace could force an AMC to bear some of these costs, which would otherwise have been borne by investors in the schemes.

Distributors: Distributors earn a commission for bringing investors into the schemes of a MF. This commission is an expense for the scheme, although there are occasions when an AMC chooses to bear the cost, wholly or partly. Distributors are the key persons of the mutual funds.

They are the only link between the mutual fund house and the investors. The main role of the distributors is to analysis the risk appetite of investors. They have to play their role such a way to keep interest of the investors in the mutual fund. However they are not directly responsible of any loss sustained by the investors. To became a distributor one has to pass the exam conducted by AMFI association of mutual funds in India. Registrars: Holdings of units by unit holders in schemes are tracked by the schemes Registrar and Transfer agent (R&T). Some AMC prefer to handle this role in house. The registrar/AMC maintains an account of the investors investments in and disinvestments (redemptions) from the scheme. Requests to invest more money into a scheme, or to switch in another scheme run by the same mutual fund or to recover moneys against existing investments in the scheme are processed by the R&T. Custodian / depository: The custodian maintains custody of the securities in which the scheme invests. This ensures an ongoing independent record of the investments of the scheme. The custodian also follows up on various corporate actions, such as rights, bonus and dividends declared by investors companies

FREQUENTLY USED TERMS:

Net Asset Value (NAV): Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. How NAV is determined In order to calculate the NAV of a scheme, each asset and liability of the scheme needs to be valued. NAV = Value of all assets (-) minus value of liabilities other than to unitholders It can also be calculated as: Unit capital plus reserves. Example of NAV Suppose a scheme with 1,000 units has the following items in its balance sheet:

Unit Capital Rs 10,000; investments at market value Rs 25,000; other Rs 3,500; other liabilities Rs 2,000; issue expenses not written off Rs 500; reserve Rs 17,000.

What would be its NAV?

By putting the above values is tabular form of normal balance sheet.

Liabilities (Rs) Unit Capital 10,00 0 Reserves 17,00 0 Other Liabilities 2,000 Issue not w/o

Assets (Rs) Investment (market value) Other assets exp 500 3,500 25,000

Total Liabilities 29,00 0

Total assets 29,000

NAV = Total assets Minus Liabilities other than to unit-holders, I-e Rs 29,000 minus Rs 2,000 = Rs 27,000 Alternatively, NAV = Unit capital plus Reserves = Rs 10,000 plus Rs 17,000 = Rs 27,000

Annual Return: ` Defines returns in uniform periods of a year. It standardizes returns

generated in a period lesser or greater than a year to a per year basis thereby facilitating easy measurement and comparison of performance. Balanced Fund / Mixed Funds: A type of fund that holds securities of two or more asset classes to meet its objective. The most common types of Balanced Funds / Mixed Funds hold different combinations of fixed income and equity securities Benchmark: A measure used as a yardstick against which the return generated by a mutual fund is evaluated. Capital Gain: It is the difference between the sale price and the cost price of the security which could be either short term or long term. The long-term capital gains are taxed at a confessional rate. Close-Ended Funds: These are funds that have a specified life span and do not offer fresh units for sale after the initial offer is closed. While some funds do offer limited repurchase after a specified time, liquidity is available to the

investor only in case of close-ended schemes where units are listed on the stock exchange Discount to NAV: It is the difference between the market price of the unit and the Net Asset Value of the fund where the market price is ruling at less than the NAV of the scheme. The phenomenon is observed in close-ended schemes whose units are listed on the bourses. Equity Fund or Growth Fund: A mutual fund whose portfolio consists primarily of stock (equity) with the aim of providing the benefit of capital appreciation to the unit holders. Normally, such schemes focus on capital appreciation rather than regular income Ex-Dividend Date: A publicly announced date on or after which the investor is not entitled to the dividend declared. In such a case, the NAV of the scheme falls by the same amount as the dividend on the ex- dividend date. Income Fund: A mutual fund set up with the specific objective of providing the investors the benefit of interest and dividends. They primarily invest in fixed income securities.

Index: The benchmark against which the performance of the fund is evaluated to see whether the fund is under-performing or outperforming the benchmark. Index Fund A type of mutual fund whose aim is to replicate a market index. These funds are passively managed and the weightage of each security in the portfolio of the fund is the same as that found in the index. Sector Fund: A fund that restricts its investments to a defined sector or some defined sectors thereby limiting the scope of its investment universe. Short Term Capital Gain: The capital gain booked on an asset which has been held for less than 3 years or 1 year in certain cases. Top Down Approach: The investment philosophy which involves the EIS analysis. Here the fund manager first looks at the economy and the industry and then filters down to the companies that are likely to benefit from those favourable economic and industrial trends.

Yield: It is the effective return to the investor taking into account only the dividend income and is usually expressed as a percentage of net asset value or market price.

MUTUAL FUND OPERATION

POOL THEIR MONEY TO PASS ON TO INVESTORS FUND MANAGER

R E T U R N S

INVEST IN

GENRATE SECURITIES & STOCK MARKET

Risk Associated With Mutual Fund: Interest Rate Risk Bond price move inversely to changes in interest rate. If interest rate go up bond price come down and vice-versa changes in bond price will affect the NAV of income funds since NAV is compiled on a daily basis, the effect of interest rate fluctuation will get reflected in the NAV. Liquidity Risk This prefer to at which security can be sold at or near its true value. The primary assessment of liquidity risk is the spread between the bid price and the offer price quoted by dealer. Credit Risk Credit risk or default risk refers to the risk that on investors of a fixed income security may default. Because of the risk, debentures are sold at a fixed spread above these offered a treasury security, which are considered as risk free. Normally, fixed income security will fluctuate depending upon the actual changes in the provided level of credit risk and actual event of default.

 Market Risk The prices of shares are subject to wide price fluctuations depending upon market conditions over which nobody has a control. Moreover, every economy has to pass through a cycleBoom, Recession, Slump and Recovery. The phase of the business cycle affects the market conditions to a larger extent.

ADVANTAGES OF MUTUAL FUND

Affordability

Diversification Variety

Regulations

Tax Benefits

Professional Mgmt

Source : www.amfiindia.com Mutual Funds offer several benefits to an investor that are unmatched by the other investment options. Last six years have been the

most turbulent as well as exiting ones for the industry. New players have come in, while others have decided to close shop by either selling off or merging with others. Product innovation is now pass with the game shifting to performance delivery in fund management as well as service. Those directly associated with the fund management industry like distributors, registrars and transfer agents, and even the regulators have become more mature and responsible. Affordability : Small investors with low investment fund are unable to invest in high-grade or blue chip stocks. An investor through Mutual Funds can be benefited from a portfolio including of high priced stock. Diversification : Investors investment is spread across different securities (stocks, bonds, money market, real estate, fixed deposits etc.) and different sectors (auto, textile, IT etc.). This kind of a diversification add to the stability of returns, reduces the risk for example during one period of time equities might under perform but bonds and money market instruments might do well do well and may protect principal investment as well as help to meet return objectives. Variety : Mutual funds offer a tremendous variety of schemes.

This variety is beneficial in two ways: first, it offers different types of schemes to investors with different needs and risk appetites; secondly, it offers an opportunity to an investor to invest sums across a variety of schemes, both debt and equity Professional Management : Mutual Funds employ the services of experienced and skilled professionals and dedicated investment research team. The whole team analyses the performance and balance sheet of companies and selects them to achieve the objectives of the scheme. Tax Benefits : Depending on the scheme of mutual funds, tax shelter is also available. As per the Union Budget-99, income earned through dividends from mutual funds is 100% tax free. Under ELSS of openended equity-oriented funds an exemption is provided up to Rs. 100,000/- under section 80C. Regulation : All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Other Benefits Potential Return : Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Low Costs : Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. Liquidity : In open-ended schemes, investor can get money promptly at net asset value related prices from the Mutual Fund itself. In close-ended schemes the units can be sold on a stock prices which some close-ended and exchange at the prevailing schemes offer you market price or avail of the facility of direct repurchases at NAV related interval periodically.

Transparency : Mutual Funds have to disclose their holdings, investment pattern and the necessary information before all investors under a regulation framework. Flexibility : Investment in Mutual Funds offers a lot of flexibility with features of schemes such as regular investment plans, regular withdrawal plans and dividend reinvestment plans; you can systematically invest or withdraw funds according to your needs and convenience. Convenient Administration : Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient.

DISADVANTAGES OF MUTUAL FUND: The following are the disadvantages of investing through mutual fund: No control over cost : Since investors do not directly monitor the funds operations, they cannot control the costs effectively. Regulators therefore usually limit the expenses of mutual funds. No tailor-made portfolio : Mutual fund portfolios are created and marketed by AMCs, into which investors invest. They can not made tailor made portfolio. Managing a portfolio of funds : As the number of funds increase, in order to tailor a portfolio for himself, an investor may be holding portfolio funds, with the costs of monitoring them and using hem, being incurred by him. Delay in Redemption :

The redemption of the funds though have liquidity in 24-hours to 3 days takes formal application as well as needs time for redemption. This becomes cumbersome for the investors.

Non-availability of loans : Mutual funds are not accepted as security against loan. The investor cannot deposit the mutual funds against taking any kind of bank loans though they may be his assets. Facts about Mutual Fund Equity instruments like shares from only a part of securities held by

Mutual Funds. Mutual Fund also invests in debt market, which is relatively much safer. The biggest advantage of Mutual Funds is their ability to diversify Mutual Funds exist in India since 1963. Mutual Fund market is much Mutual Fund the best solutions for the people who want to manage The size of Mutual Fund market in India is Rs. 107728 crores. the risk. evolved in India and theyre for last 60years. their risk and get good returns.

According to the SEBI-NCAER survey of Indian Investor about 15

million of 8.7% of households have invested in Mutual Funds and about 23 millions are unit holders in India. US-64 is very much a part of the market and is not immune to vagaries. The crisis has arisen due to mismanagement of funds.

RISK RETURN GRAPH

The risk return trade - off ..

Investment horizon

Potential for return

Sector funds Growth Funds

Index, Active diversified

Balanced Funds
Ratio of Debt : Equity

Debt Funds
Liquid Fund

High

Risk

Low

* Source: www.hdfcmutualfundindia.com

AN OVERVIEW OF THE MARKET PIONEER NJ INDIA INVEST NJ India Invest is combination of two words N and J, where N stands for NEERAJ CHOKSI and J stands for JIGNESH DESAI. They are two friends form SURAT. NJ INDIA INVEST- Past and Present: The seeds of NJ INDIA INVEST were sown in the year 1994 and its revolutionary journey of 13 years began from a business of Mutual Fund Advisors to Most successful National Distributor in the Mutual fund industry. Presently NJ playing important role as National Distributor in Mutual fund industry. NJ has its own large distribution channel across India and more than 7500 AMFI Certified Mutual Fund Advisors are working with NJ India Invest. Today, NJ India Invest become stronger with 65 Branch offices in 15 states with corporate office located at SURATGUJARAT. NJ FUNDZ NETWORK, a business division of NJ India Invest Pvt.ltd. has been started in the year 2003 to grow and deals with the 7500

AMFI Certified Mutual Fund Advisors spread across India. NJ Fund Network is First in Indian Mutual Fund industry to offer a complete business platform to Financial Advisors.

NJ INDIA INVESTs corporate philosophy: At NJ Service and Investing philosophy inspire and shape the

thoughts, beliefs, attitude, actions and decisions of their employees. Service Philosophy: NJs primary measure of success is customer satisfaction

think of the customer first, take responsibility, and make prompt service to the customer a priority deliver upon the commitments & promises made on time anticipate, visualize, understand, meet, exceed our customers needs bring energy, passion & excellence in everything we do be honest and ethical, in action & attitude, and keep the customers interest supreme strengthen customer relationships by providing service in a thoughtful & proactive manner and meet the expectations, effectively

Investing Philosophy: NJ aim to provide Need-based solutions for long-term wealth creation and with true, unbiased, need-based solutions and advice

that best meets their stated & un-stated needs. NJs efforts to provide quality financial & investment advice, NJ believes that

Clients want need-based solutions, which fits them Long-term wealth creation is simple and straight Asset-Allocation is the ideal & the best way for long-term wealth creation Educating and disclosing all the important facets which the customer needs to be aware of, is important The solutions must be unbiased, feasible, practical, executable, measurable and flexible Constant monitoring and proper after-sales service is critical to complete the on-going process.

NJ INDIA INVESTs Vision:

To be the leader in our field of business through,

Total Customer Satisfaction Commitment to Excellence Determination compliance to Succeed with strict adherence to

Successful Wealth Creation of our Customers NJ INDIA INVESTs Mission: Ensure creation of the desired value for our customers, employees

and associates, through constant improvement, innovation and commitment to service & quality. To provide solutions which meet expectations and maintain high professional & ethical standards along with the adherence to the service commitments

NJ INDIA INVESTs Business Division: NJ Fundz Network NJ Print Shop NJ Gurukul NJ Web Nest NJ Wealth Nest

NJ INDIA INVESTs Services:

NJ Advisors desk: A comprehensive online Advisor Desk with complete reports, tools to manage, monitor and control Advisors business. Business MIS reports(income,AUM,transaction,bills & rewards) Client servicing ( Admin,Protfolio,printing,Customer care) Administration ( employees,Branches,Website)

NJ Customer Care: Single contact point for all queries available to all Advisor in India. Trained Executives for time bound solving of queries All India toll free number- 1800 233 0155

NJ INDIA Online: Facility to your client to make Transaction online under Advisors, like Purchase Redemption Switch.

NJ HR Consultancy: Solutions for recruitment of Employees Online Management / Tracking of Employee or branch business Consulting services for Recruitment, Retention, Appraisals and payment management.

NJ Research: Regular publications like monthly magazine FUNDZ WATCH weekly reports etc. and communication like daily market update, daily MF track and much more to keep you update. Research Reports, recommendation, market insight, analyses etc.

NJ Quality Service: Automatic capturing of all transaction done through Advisors Daily updating on Advisors client Portfolios Timely payments of all Brokerages/dues Timely/easy available of all application and other forms

NJ believes in 360 Advisory Platform:

With this Platform, NJ try to offer all possible products, services and support which an Advisor would need in his business. The support functions are generally in the following areas

Business Planning and Strategy Training and Development Self and of employees Products and Service Offerings Business Branding Marketing Sales and Development Technology Advisors Resources - Tools, Calculators, etc.. Research Communications

Marketing Support: The Marketing Team will help Advisors to give the relevant support needed for effective sales, creating brand and for the development of their business.

Branded Flyers and One-pagers for products, new launches/NFOs, services, etc Business Organizers, Performance Review Hand-books, etc Communication support NJ Knowledge Edge and NJ I-Gurukul series Letters, Direct Mail pieces Email Communications for products, new launches/NFOs, services, etc Calculators and Tools for effective communication to clients Support in form of NJ websites, web services and product development Branded Presentations

Technology: Technology is the biggest differentiator. NJ pots a lot of efforts and resources are put in to build a technological edge to give the best possible services to Advisors and their clients. Technology has been and is NJs key strength. What NJ offer on the technological front is unique and comprehensive. NJs focus can be gauged from the fact that NJ have a separate sister concern started for

the sole purpose of providing the best support to NJ in terms of technology. High infrastructure spending is done to improve & strengthen NJs deliverables on this technological front. Fin logic Technologies (India) Pvt. Ltd. does all the development work inhouse on a continuous basis through its team of talented professionals. All the tools, services, products, etc offered by NJ has been developed in-house according to what NJ feel. In todays world much is dictated by two important words Information and Technology. NJ realizes this more than anyone else. And thats way NJ make constant efforts to keep Advisors ahead of the curve and ensure that Advisors and their client receive quality, accurate and timely information NJ has made arrangements to receive the following through

Technology

Details of transaction of any nature in Mutual Funds by any client, through our Associates or us, on a Daily basis NAV, Dividend, and other details of all the Mutual Fund schemes on a Daily basis Monthly Portfolio and other important information of all the Mutual Fund schemes All relevant details of Direct Equities like Prices, Dividends, Bonus, Market Capitalizations, etc on a Daily basis All relevant market related information in addition to economic, event-specific, key economic variables, etc on a Daily basis

Training and Development:

I-Gurukul is a program run by NJ Fundz Network to educate and train Financial Advisors. The I-Gurukul program is run throughout the year at all the Branches of NJ. Objectives: To impart all the important knowledge and skills to Financial Advisors necessary to be successful both as a professional and a business person To raise the quality and standard of such Advisors and bring them on par with the best Advisors in the industry To ultimately benefit the investors with quality services, offerings and recommendations The Team: The Team at I-Gurukul combines rich industry experience along with in-depth knowledge of the financial advisory field and the products/markets. The team has been carefully selected keeping in mind the objective of the program, from among the best in the company as well as from the industry. Customer Care: NJ Customer Care offers with a 'Single Service Point' to all the advisors to help solve their customer queries. Centralized team of Customer Care Executives would solve the queries at the earliest. Advisors can also view the latest status of all your queries online. As an NJ Advisor they can submit their queries to Customer Case Executives by:-

Telephonic Email or Online directly through your Advisors (Partners) Desk

NJ has also introduced a TOLL FREE number for NJ Customer Care. Members of NJ Fundz Network can now call on 1800 233 0155 from throughout India and submit their Queries.

Customer Care Objectives:

Solve customer queries within defined turn-around times Serve Advisors as single contact point for all service related issues Provide complete transparency and information to customers on queries Set a quality customer service benchmark in the industry.

Query Management:

Automated On-line Query Management Module is used to efficiently handle the queries of our Advisors/Associates. Query entered is automatically forwarded to concerned person who can immediately solve the same. Status is updated online and turns around time for different types of queries defined.

Alerts for unsolved queries is automatically shouted to the higher management in instill discipline Stringent actions taken against non-compliance

MANAGEMENT: The management at NJ brings together a team of people with wide experience and knowledge in the financial services domain. The management provides direction and guidance to the whole organization. The management has strong visions for NJ as a globally respected company providing comprehensive services in financial sector. The Customer First philosophy in deeply ingrained in the

management at NJ. The aim of the management is to bring the best to the customers in terms of

Range of products and services offered Quality Customer Service All the key members of the organization put in great focus on the

processes & systems under the diverse functions of business. The management also focuses on utilizing technology as the key enabler for all the activities and to leverage the technology for enhancing overall customer experience.

Departmental Study Of NJ Indiainvest

Sales Dept. Operations Dept. Accounts Dept. Research Depart. Legal Compliances

HR Dept.

THE NJ FUNCTION:

The support functions are generally in the following areas

Business Planning and Strategy Training and Development Self and of employees Products and Service Offerings Business Branding Marketing Sales and Development Technology Advisors Resources - Tools, Calculators, etc.. Research Communications

NJ deal in following Investment: Mutual Funds Fixed Deposits Infrastructure Bonds Approved Securities for Charitable Trust The above are the core Investment in which we deal and where we have developed our competency.

SERVICES

As NJ Wealth Advisors Global Private Client, you get comprehensive set of services that ensure you stay informed, insightful, in command, of your investments at all times.

www.njfunz.com Services provided to valuable Clients & Agents: Dedicated portfolio planning & restructuring on demand The Weekly Performance Sheet (it covers performance of leading mutual fund schemes) The Monthly Fund Fact Sheet (it covers comprehensive analysis of various mutual fund. Various Subscription services via e-mail Sharing relevant information related to the Indian Investment world.

Over and all we also provide net-based services to our clients and agents. Our e-services are powered by a comprehensive website http:/www.njindiainvest.com. It covers detailed information about the Mutual industry, it passes various financial planners to satisfy investment goals like retirement planning, childs marriage planning etc, it also posses various analytical tools to measure the performance of Mutual Fund schemes viz. Returns Calculators, SIP Returns Calculator, and many others. There is a separate desk for the clients to get their portfolio information on fingertip At NJ their Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude, actions and decisions of our employees. If NJ would resemble a body, our philosophy would be our spirit which drives our body. Service Standards Service in words, service in action Service is the key to unlocking customer satisfaction, which again is key for sustainability of any business. At NJ we understand this very well. NJ has set strict processes in place to deliver quality services to customers. At NJ strict quality service standards are set and a welldefined process is established and followed religiously by our quality customer service teams. Performance is evaluated on a frequent basis and glitches are ironed out. But quality service also involves quality people in addition to processes. NJ gives significant focus to the proper training and development of the people involved in the service delivery chain.

Further they,

Have well-defined "Privacy Policy" to keep clients information confidential & internal audits done on the same at regular intervals Receive various statistics which are analyzed on an ongoing basis to improve the service standards

They are committed to improve and enhance our services and undertake new service initiatives. Such and other services differentiate us with other service providers in the industry. NJs Service Commitments The service commitments are to guide the actions of the people at NJ. Clearly stated, customers can freely communicate any such actions/events wherein they feel that any of the following commitments have been breached / compromised. At NJ we desire to honor our commitments at all points of time and to all our customers without any bias.

To provide customer-focused need-based valued services To provide reliable, accurate and timely information To maintain all records in privacy To optimize services/benefits at least justifiable cost To develop and grow the customers business To provide constructive after sales service To honor our service commitments

Services offered

www.njfundz.com A good product/service offering, targeted at meeting the needs of the clients, lies at the center of any business. With customers today expecting single window solutions and services, successful and easy integration of products is the need of the hour. Any Advisor should wake up to this and other crucial changes taking place and try to adapt himself to this change to avoid being out-dated and out-serviced. At NJ they try to foresee such changes and develop solutions that are new, needed and well appreciated in the industry. The services offered on the NJ Fundz Network are unique in the industry. The services are designed to equip the independent advisors with all the support and tools needed for a successful business. NJ provides services and support where an advisor may feel ill equipped and make them their strengths. The Partner on the NJ Fundz Network instantly beats competition by being on the Network itself. Its a new paradig

NJ IndiaInvests Achievements:NJ IndiaInvest is a growing company that can be very well proved from the below achievements. Have gained a dominant place in the Indian Mutual fund Distribution Business Certified by the association of Mutual Funds as AMFI registered mutual fund advisor Won the Pru. chairmans Award twice in the year 2000 & 2002 for outstanding performance in the schemes of prudential ICICI Mutual fund. The Chairman, Prudential, presented the awards at London both the times. Won many other awards & certificates for outstanding performance in various mutual fund schemes. It has acquired about 15 to 17% share of total mutual fund business of Gujarat. Received the Award for year 2003-04 from HDFC Mutual fund for highest selling of Mutual Fund. The award was received by director at Scotland. Asset Under Management more than 850 crores.

Recognitions Year 2000: For Outstanding Performance presented by Chairman, Prudential Plc. at London

Year 2002: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London Year 2003: For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London Year 2004: Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh, Scotland Year 2006: Award for mobilizing the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc at Mumbai AMCs with NJ IndiaInvest:

Alliance Capital Mutual Fund Birla Mutual Fund Cholamandalam Cazenove Mutual Fund DSP Merrill Lynch Mutual Fund Dundee Mutual Fund Escorts Mutual Fund First India Mutual Fund Franklin Templeton Mutual Fund Pioneer ITI HDFC Mutual Fund HSBC Mutual Fund

IL & FS Mutual Fund ING Savings Trust JM Mutual Fund LIC Mutual Fund Prudential ICICI Mutual Fund Reliance Capital SBI Mutual Standard Chartered Mutual Fund Sun F&C Mutual Fund Sundaram Mutual Fund Tata Mutual Unit Trust Of India

Important responsibilities of investors in the financial planning exercise?

Should set measurable financial goals. Should understand the impact of financial decisions on their cash flows and their income. Should be willing to revise and re-balance their portfolios with changing market conditions, performance and their changing needs. Investors benefit immensely by starting early and being systematic and disciplined in their approach.

Very important points on financial planning

The planner can look at all the clients need including budgeting, saving, taxes, investments, insurance and retirement planning. A financial planner can link his own rewards and fees to the clients financial success and the achievement of their financial goals Mutual Fund is the most important tool for financial planning.( Core Product) Financial is not only investing. It comes before investing. It is relevant for all categories of clients. It is not as same as retirement planning. It is not only Tax Planning. Financial planning is important at younger stage of life.

Important points on Financial Planning The basis of genuine investment advice should be financial planning to suit the investors situation. It should not be current market condition. Financial Planning allows a person to achieve financial goals through proper management of finances. Financial planners and their clients should focus on allocating funds to different asset classes. Financial planning is relevant not only to HNIs

 Financial planning works better for younger/ middle aged client. Financial planning is not merely tax planning. Wealth cycle for investors Stage Financial needs Investment preferences

Accumulation stage Transition Stage Reaping Stage Inter Generati E q u it y onal transfer

Investingforlong termidentifed Financialgoals Neartermneedsfor fundsas pre-specifiedneeds Higherliquidity requirements drawcloser

Growthoptionsandlong term Products.High-risk appetite Liquidandmediumterm investments. Lowerriskappetite Liquidandmediumterm investments. Preferenceforincome

F I B o n d s

Sudden C o r p o r a t e D e b e nM uor d e r a t e L o wM o d e r a t e M o d e r a t e t es Low wealth Mediumtolongterm Wealthpreservation. Preferenceforlowrisk surge C o m p a n y F ix e d M o d e r a t e Low Low Low Comparison by Nature of Investment products D e p o s it e s M o d e ra t e

Longterm investmentof Lowliquidityneeds. H i g inheritance L o w h M o d e ra t e H ig h H ig h o r L o w Abilitytotakeriskand investforthelong M o d e r a t e H ig h H ig h M od term e r a t e M o d e r a t e

R e tu r n

anddebtproducts S a fe ty V o l a til i ty L i q u id i ty C o n v e n ic e

B a n k D e p o s it e s L o w H i g h PPF

H ig h

Low Low Low M o d e ra t e H ig h M o d e ra t e

H ig h M o d e ra t e Low M o d e ra t e Low H ig h

M o d e r a t e H ig h H ig h

L ife In s u r a n c e L o w M o d e r a t e H ig h G o ld R e a l E s t a t e M o d e r a t e L o w H ig h H ig h L o w M o d e ra te H ig h

M u t u a l F u n d s H ig h H ig h

What are the financial planning strategies that can be recommended to investors?

Rupee cost averaging. A fixed amount is invested at regular intervals

 More units are bought when prices are low and fewer units are bought when prices are high. Over a period of time, the average purchase price of investor is lower than average NAV. Its disadvantage: Does not indicate when to sell or switch. Value averaging. A fixed amount is targeted as the desired value of the portfolio at regular intervals If markets have moved up, the units are sold to restore target value and vice versa. It is superior to RCA as it enables the investor to book profits and rebalance the portfolio.

Research Methodology Primary Objectives

To find out whether LIC agent believe in Financial Planning or not. What are their beliefs about the financial planning? What do they think about financial planning?

Secondary objective
To find out whether LIC agent manage the cash flow of clients by using various cash management technique. To find out whether LIC agent solves the investment & planning issues or not of clients. To find out whether LIC agent does Retirement planning or not. To find out whether LIC agent does tax planning or not. To find out whether LIC agent does Estate Planning or not.

Research Design:
I have used the Descriptive Research Design for the purpose of survey, as it will enable me to describe the characteristics of a particular individual or a group of LIC agents and their role towards financial planning in financial advisory business.

Sampling Method:
I have used the non probability sampling method of Quota sampling in different areas of Ahmedabad city, as it would give better idea about the different categories of LIC agents what are their beliefs about financial planning.

Sample Size:
It would be better to have a sample of 150 people to have better idea and representativeness of the population being surveyed.

Research Instrument:
I have used primary data collection method. A detailed questionnaire, BOP (Business Opportunity Presentation) is be used for purpose survey and it is attached with this proposal.

Data analysis tool:

Since it is better to greater validity of the results found it is better to use the statistical software using computers i.e. SPSS (Statistical Package for Social Science)

 In SPSS I used T-test, Mean, Median, Mode, Frequency Table, Cross Tabulation.

Data analysis and Interpretation

Q.1 Do you believe that financial planning should cover all areas of financial needs of clients? One Sample t-Test: Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are agree that financial planning should cover all areas of financial needs of clients i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement that financial planning should cover all areas of financial needs of clients? i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics One-Sample Test Mea Std. Std. Error Test Value = 4 N n Deviation Mean t df Sig. (2Mean 95% Confidence Covert financial tailed) Differenc 150 4.10 .81 Interval of the 6.60E-02 needs e Difference Lower Cover financial 1.514 149 needs .132 1.00E-01 -3.05E-02 .23 Upper

Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.132 which is grater than 0.05, it means that the null hypothesis H0 is accepted and it can be said that there is significant difference between calculated mean and hypothesized mean.

Q.2 (A) Do you believe that each and every financial decision affected other areas of finance?

Affect Financial Areas Frequenc Yes No Total y 136 14 150 Valid Percent 90.7 9.3 100.0 Cumulative Percent 90.7 100.0

Percent 90.7 9.3 100.0

Valid

A c in n lA a ffe tF a cia re s
N o

Ye s

INFERENCE: Out of 150 LIC agents

136(91%) LIC agents are believe that each and every financial decision affected other areas of finance like risk management, tax plan, estate plan, investment plan etcand

14(9%) LIC agents are believe that each and every financial decision is not affected other areas of finance,

So we can say that majority LIC agents are believe that each and every financial decision affected other areas of finance like.

Q.2 (B) If yes which financial areas are affected of financial decision? One Sample t-Test:

Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (3). In other words, we hypothesize that the LIC agents are agree that each and every financial decision affected other areas of finance i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement that each and every financial decision affected other areas of finance. i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics N Risk Mgmt. Retirement Plan Tax Plan Estate Plan Mea n Std. Deviation 1.16 1.14 1.85 1.22 Std. Error Mean 9.46E-02 9.34E-02 .15 9.95E-02

150 3.97 150 3.77 150 3.91 150 3.46

One-Sample Test Test Value = 3

95% Confidence t df Sig. (2- Mean tailed) Difference .97 .77 .91 .46 Interval of the Difference Lower Risk Mgmt. Retirement Plan Tax Plan Estate Plan Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.000 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is more than 3(3.46) and less than 4(3.97), which is between, agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement. 10.292 149 .000 8.211 6.047 4.623 149 .000 149 .000 149 .000 .79 .58 .61 .26 Upper 1.16 .95 1.21 .66

Q.3 Do you believe that my clients should adopt more easily to life changes (financial) in order to feel more secure?

One Sample t-Test: Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are agree that clients should adopt more easily to life changes (financial) in order to feel more secure. i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement that clients should adopt more easily to life changes (financial) in order to feel more secure. i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics N Feel More Secure Mea n Std. Deviation 1.06 Std. Error Mean 8.64E-02

150 4.23

One-Sample Test Test Value = 4

95% Confidence t df Sig. (2tailed) Mean Difference Interval of the Difference Lower Feel More Secure Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.008 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is 4.23 and which is between agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement. 2.701 149 .008 .23 6.26E-02 Upper .40

Q.4

How do you manage cash flow of your clients? Cash flow mgmt Valid Cumulative Percent 69.3 Frequency Percent Percent 104 69.3 69.3

Valid Sound Risk Managemen t

Insurance Techniques Total 46 150 30.7 100 30.7 100 100

Frequency

Insurance Techniques,46, 31% SoundRisk Management, 104,69%

SoundRisk Management InsuranceTechniques

INFERENCE:

Out of 150 LIC agents 46(31%) LIC agents are use insurance techniques like insurance, government securities, bank deposit etc for manage the cash flow of his clients and 104(69%) LIC agents are use sound risk management like equity, mutual funds, ULIP schemes ETC for manage the cash flow of his clients, So we can say that majority LIC agents are use sound risk management technique for manage the cash flow of his clients

Q.5 (A) Do you believe in creating and managing accumulation of wealth, to generate future capital cash flow for your clients?

Generate Future Capital Cumulative Valid Yes No Total Frequency 142 8 150 Percent 94.7 5.3 100.0 Valid Percent 94.7 5.3 100.0 Percent 94.7 100.0

GenerateFutureCapital
N o

Yes

INFERENCE: Out of 150 LIC agents

142(95%) LIC agents are believe in creating and managing accumulation of wealth, to generate future capital cash flow for his clients and

8 (5%) LIC agents are not believe in creating and managing accumulation of wealth, to generate future capital cash flow for his clients

So we can say that majority LIC agents are believe in creating and managing accumulation of wealth, to generate future capital cash flow for his clients

Q.5 (B) If yes where do you invest?

Suggestion For Investment

160 140 No. of Respondents 120 100 80 60 40 20 0 Mutual Fund Equity Post Bank Debt Insurance 36 83 64 41 13 Series1 135

Inve stme nt Products

INFERENCE:

Out of 150 LIC agents 135 LIC agents suggest insurance is the best investment product for investment, 83 LIC agents suggest mutual funds are the best investment product for investment, 64 LIC agents suggest equity is the best investment product for investment, 36 LIC agents suggest deposit in post is the best for investment, 41 LIC agents suggest deposit in bank is the best for investment, 13 LIC agents suggest debt like debenture, government securities etc is the best investment product for investment, So we can say that according to preferences of LIC agents insurance, mutual funds, equity is best investment product for investment.

Q.6

Do you believe in planning to ensure financial independent

at retirement?

One Sample t-Test: Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are agree that planning to ensure financial independent at retirement. i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement that planning to ensure financial independent at retirement. i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics N Independence At Retirement Mea n Std. Deviation .63 Std. Error Mean 5.17E-02

150 4.61

One-Sample Test Test Value = 4

95% Confidence t df Sig. (2Mean Interval of the Difference Lower Independence At Retirement Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.000 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is 4.61 and which is between agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement. 11.729 149 .000 .61 .50 Upper .71 tailed) Difference

Q.7 Do you believe that financial planning fulfills the goal of my clients? One Sample t-Test:

Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are agree that financial planning fulfills the goal of my clients. i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement that financial planning fulfills the goal of my clients. i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics N Fulfills The Goals Mea n Std. Deviation .84 Std. Error Mean 6.89E-02

150 4.41

One-Sample Test Test Value = 4

95% Confidence t df Sig. (2tailed) Mean Difference Interval of the Difference Lower Fulfills The Goals Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.000 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is 4.41 and which is between agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement. 5.900 149 .000 .41 .27 Upper .54

Q.8 (A) Do you believe that planning is necessary for conservation and distribution of assets?

Conservation & Distribution of Assets Cumulative Percent 93.3 100.0

Frequency Yes Valid No Total 140 10 150

Percent 93.3 6.7 100.0

Valid Percent 93.3 6.7 100.0

Conservation&DestributionOfAssets
No

Yes

INFERENCE: Out of 150 LIC agents

140(93.3%) LIC agents are believe that planning is necessary for conservation and distribution of assets and 10 (6.7%) LIC agents are not believe that planning is necessary for conservation and distribution of assets, So we can say that majority LIC agents are believe that planning is

necessary for conservation and distribution of assets.

Q.8 (B)

If yes which kind of financial product would you suggest

for conservation and distribution of assets of your clients?

Suggestion Of Conservation And Distribution Of Assets

140 120 No.OF Respondance 100 82 80 64 60 40 20 0 Mutual fund Equity Post Bank Debt Insurance 36 40 12 Series1 133

Investment Product

INFERENCE:
Out of 150 LIC agents

133 LIC agents suggest insurance is the best financial product for conservation and distribution of assets. 83 LIC agents suggest mutual funds are the best financial product for conservation and distribution of assets. 64 LIC agents suggest equity is the best financial product for conservation and distribution of assets. 36 LIC agents suggest deposit in post is the best financial product for conservation and distribution of assets. 41 LIC agents suggest deposit in bank is the best financial product for conservation and distribution of assets. 13 LIC agents suggest debt like debenture, government securities etc is the best financial product for conservation and distribution of assets.

So we can say that according to preferences of LIC agents insurance, mutual funds, equity is the best financial product for conservation and distribution of assets. .

Q.9 (A) Do you have plan for tax saving of your clients? Plan for Tax Saving

Frequenc y Valid Yes 150

Percent 100.0

Valid Percent 100.0

Cumulative Percent 100.0

PlanForTaxSaving

Yes

INFERENCE: 150(100%) LIC agents has tax saving plan for solving the tax issues of his clients,

So we can say that all LIC agents has different types of tax saving plan for solving many tax issues of his clients.

Q.9 (B) if yes which kind of tax saving financial product would you suggest for your clients?

S u g g e stio n fo r T ax S av in g
160 140 120 100 80 60 40 20 0
un d

150 103 47 28 S eries 1 42 5 4

No.of Respondents

UL IP

NS E

PP F

Mu tua l F

Ins ur an ce

In ve stm e n t P ro d u ct

INFERENCE: Out of 150 LIC agents

EL SS

Ot he r

150 LIC agents suggest insurance is the best investment product for tax saving, 103 LIC agents suggest ULIP schemes are the best investment product for tax saving, 47 LIC agents suggest mutual funds are the best investment product for in tax saving, 42 LIC agents suggest deposit in post is the best for investment tool for tax saving, 28 LIC agents suggest NSE is the best investment tool for tax saving, 5 LIC agents suggest ELSS schemes is the best investment product for tax saving, So we can say that according to preferences of LIC agents

insurance, ULIP schemes is best investment product for tax saving.

Q.10

Which of the below mentioned details of your clients is

necessary?

One Sample t-Test: Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are mentioned all details of the clients. i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not mentioned all details of the clients. i.e. H1: x , i.e. H1: x 4 Significance level: 0.05 One-Sample Statistics N C Age C Gender C Occupation C Marital Status C No. Of Children Gender Of Children C No. Of Dependence C Other income One-Sample Test Test Value = 4 t df Sig. (2- Mean tailed) Difference 95% Confidence Interval of the Difference Mea n Std. Deviation .49 .71 .49 .66 .70 .90 .93 .93 Std. Error Mean 4.03E-02 5.83E-02 3.98E-02 5.39E-02 5.68E-02 7.37E-02 7.60E-02 7.55E-02

150 4.72 150 4.65 150 4.73 150 4.63 150 4.60 150 4.48 150 4.46 150 4.49

Lower C Age C Gender 17.880 149 .000 11.206 149 .000 .72 .65 .73 .63 .60 .48 .46 .64 .54 .65 .53 .49 .33 .31

Upper .80 .77 .81 .74 .71 .63 .61

C Occupation 18.444 149 .000 C Marital Status C No. Of Children Gender Of Children C No. Of Dependence C Other income 11.759 149 .000 10.571 149 .000 6.512 6.049 149 .000 149 .000

6.532

149 .000

.49

.34

.64

Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.000 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is more than 4(4.46) and less than 4(4.73), which is between, agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement.

Q.11

Do you ask for the expected return of the clients?

Expected Return Frequency Percent Valid Percent Yes Valid No Total 148 2 150 98.7 1.3 100.0 98.7 1.3 100.0 Cumulative Percent 98.7 100.0

INFERENCE: Out of 150(98.7%) LIC agents 142 LIC agents ask expected return of his clients

Only 8(1.3%) LIC agents not believe in asking about the expected return of his clients

Q.12 It is indispensable to know the risk appetite of the client One Sample T-Test:

Null Hypothesis (HO): There is no significant difference between calculated mean and hypothesized mean (4). In other words, we hypothesize that the LIC agents are agree with the statement It is indispensable to know the risk appetite of the client i.e. Ho : x = = 4 Alternative Hypothesis (H1): There is significant difference between calculated mean and hypothesized mean. In other words the LIC agents are not agree with the statement It is indispensable to know the risk appetite of the client i.e. H1: x , i.e. H1: x 4 Significance level: 0.05

One-Sample Statistics N C Know The Risk Mea n Std. Deviation .81 Std. Error Mean 6.65E-02

150 4.43

One-Sample Test Test Value = 4

95% Confidence t df Sig. (2tailed) Mean Difference Interval of the Difference Up Lower C Know The Risk Inference: Here the test is performed at 95% significance level and the p-value comes out as 0.00 which is less than 0.05, it means that the null hypothesis H0 is rejected and it can be said that there is significant difference between calculated mean and hypothesized mean. As our mean is 4.43 and which is between agree and strongly agree. So, we can say that LIC agent are agreed but not strongly agree with the statement. pe r 6.516 149 .000 .43 .30 .56

Q.13

Do you offer to plan for the children education?

Education Plan Frequency Percent Less than 1 year 2-3 years 3-5 years 5-7 years More than 7 years other Total 6 2 19 9 112 2 150 4 1.3 12.7 6 74.7 1.3 100 Valid Percent 4 1.3 12.7 6 74.7 1.3 100 Cumulative Percent 4 5.3 18 24 98.7 100

Vali d

Education Plan
No.of Respondents 120 100 80 60 40 20 0 Less than1 year 2-3 years 3-5 years 5-7 years M ore than7 years other 19 6 2 9 2 Frequency 112

Years of plan

INFERENCE: Out of 150 LIC agents

112 LIC agents offer more than 7 years educations plan of his clients, 19 LIC agents offer 3-5 years educations plan of his clients, 9 agents offer 5-7 years educations plan of his clients, 2 LIC agents offer 2-3 years educations plan of his clients, 6 LIC agents offer less than 1 years educations plan of his clients,

So we can say that majority LIC agents offer long-term education plan like 5-7 years, more than 7 years plan etc of his clients.

Q.14

Do you offer to plan for daughter marriage? Marriage Plan Frequency Percent Valid Percent Cumulativ e Percent

Less than 1 year 2-3 years 3-5 Valid years 5-7 years More than 7 years other Total 5 3.3 3.3 3.3

7 17 5

4.7 11.3 3.3

4.7 11.3 3.3

8 19.3 22.7

114 2 150

76 1.3 100

76 1.3 100

98.7 100

M arrig P e lan
No.of Respondents 12 0 10 0 80 60 40 20 0 Less than1 year 2-3 years 3-5 years 5-7 years M ore than7 years other 17 5 7 5 2 Frequency 114

Years of P lan

INFERENCE: Out of 150 LIC agents

114 LIC agents offer more than 7 years marriage plan of his clients, 17 LIC agents offer 3-5 years marriage plan of his clients, 5 agents offer 5-7 years marriage plan of his clients, 7 LIC agents offer 2-3 years marriage plan of his clients, 5 LIC agents offer less than 1 years marriage plan of his clients,

So we can say that majority LIC agents offer long-term marriage plan like 5-7 years, more than 7 years plan etc of his clients.

Experience
Experience

Freque ncy 0-3 years 4-7 years 8-11 years More than 11 years Total 28 25 32

Percent 18.7 16.7 21.3

Valid Percent 18.7 16.7 21.3

Cumulative Percent 18.7 35.3 56.7

Valid

65 150

43.3 100

43.3 100

100

Experience
70 No.of Respondents 60 50 40 30 20 10 0 0-3years 4-7years 8-11years Morethan 11years 28 25 32 Frequency 65

Years

Inference: The table represents survey of 150 LIC agents we found that 65 LIC Agents having more than 11 years experience 32 LIC Agents having 8-11 years experience

25 LIC Agents having 4-7 years experience 28 LIC Agents having 0-3 years experience

So we can say that we include LIC agents that come into all kinds of experience category.

Age
Age

Frequenc Percen y 21-30 31-40 Valid 41-50 More than 5o year Total 26 65 41 18 150 t 17.3 43.3 27.3 12.0 100.0

Valid Percent 17.3 43.3 27.3 12.0 100.0

Cumulative Percent 17.3 60.7 88.0 100.0

Inference: The table represents survey of 150 LIC agents we found that 65 LIC agents come into 31-40 years age category, 41 LIC agents come into 41--50 years age category,

26 LIC agents come into 21-30 years age category, 18 LIC agents come into more than 50 age category,

So we can say that taking survey of all kind of LIC agents, which comes into different age category.

AREAS

Area

Frequency Percent 1 2 Valid 3 4 5 Total 30 30 30 30 30 150 20.0 20.0 20.0 20.0 20.0 100.0

Valid Percent 20.0 20.0 20.0 20.0 20.0 100.0

Cumulative Percent 20.0 40.0 60.0 80.0 100.0

INFERENCE: Out of 150 LIC agents we selected 30 LIC agents in 5 diversify area in Ahmedabad city in table 1 represents Relief road area of Ahmedabad. 2 represents Vasana area of Ahmedabad, 3 Represents Ashram road area of Ahmedabad, 4 represents Rkhiyal area op Ahmedabad, 5 represent Isanpur area of Ahmedabad.

Income

Income Frequenc Percen Valid y Less than 10000 10001-20000 Valid 20001-30000 30001-40000 More than 40000 Total 45 53 21 18 13 150 t 30.0 35.3 14.0 12.0 8.7 100.0 Percent 30.0 35.3 14.0 12.0 8.7 100.0 Cumulative Percent 30.0 65.3 79.3 91.3 100.0

INFERENCE: Out of 150 LIC agents 53 LIC agents come into 10001-20000 earning category, 45 LIC agents come into less than 10000 earning category, 21 LIC agents come into 20001-30000 earning category, 18 LIC agents come into 30001-40000 earning category, 13 LIC agents come into more than 400000 earning category.

Gender

Gender Frequency Percent Valid Percent Cumulative Percent Male Valid Female Total 133 17 150 88.7 11.3 100.0 88.7 11.3 100.0 88.7 100.0

INFERENCE: Out of 150 LIC agents 133 are male and remaining 17 are female in this survey.

Other Occupation

Other Occupation Frequency Percent Valid Percent Job Valid Practice Total 1 149 150 .7 99.3 100.0 .7 99.3 100.0 Cumulative Percent .7 100.0

INFERENCE: Out of 150 LIC agents only one LIC agent is practicing along with job, remaining are independent

Cross Tabulation between Cash flow Mgmt. And different Age of LIC agents

C ro s s T a b u la tio n b e tw e e n C a s h F lo w M g m t. & A g e .
50 45 40 35 30 25 20 15 10 5 0 46 2 1 -3 0 24 18 16 8 2 S o u n d R is k In su ra n c e T e c h n iq u e s Management M e th o d s 19 17 3 1 -4 0 4 1 -5 0 M o re th a n 5 o ye a r

No.of Res[pondents

INFERENCE: 65 LIC agents come into 31-40 age category out of 65 LIC agents 46 use sound risk management techniques and remaining 19 LIC agents use insurance techniques for managing cash flow of his clients 41 LIC agents come into 41-50 age category out of 41 LIC agents 24 use sound risk management techniques and remaining 17 LIC agents use insurance techniques for managing cash flow of his clients, 26 LIC agents come into 21-30 age category out of 26 LIC agents 18 use sound risk management techniques and remaining 8 LIC agents use insurance techniques for managing cash flow of his clients 18 LIC agents come into more than 50 year age category out of 18 LIC agents 16 use sound risk management techniques and remaining 2 LIC agents use insurance techniques for managing cash flow of his clients So we can say that majority LIC agents that come into different age category use sound risk management techniques for managing cash flow of his clients

Cross Tabulation between Cash flow Mgmt. And different Experience of LIC agents

C ro ss T ab u latio n b etw e en C a sh F lo w M g m t. & E xp erien ce o f R esp o n d en ts

45 40 35 30 25 20 15 10 5 0 42 0 -3 ye a rs 23 7 8 8 4 -7 ye a rs 8 -1 1 ye a rs More th a n 1 1ye a rs

No.of Respondents

21

24 17

Sou n d R isk Man a g e me n t

In su ra n ce T e ch n iq u e s

M e th o d s

INFERENCE:

65 LIC agents come into more than 11 years experience category out of 65 LIC agents 42 use sound risk management techniques and remaining 23 LIC agents use insurance techniques for managing cash flow of his clients

32 LIC agents come into 8-11 experience category out of 32 LIC agents 24 use sound risk management techniques and remaining 8 LIC agents use insurance techniques for managing cash flow of his clients

25 LIC agents come into 4-7 experience category out of 25 LIC agents 17 use sound risk management techniques and remaining 8 LIC agents use insurance techniques for managing cash flow of his clients

28 LIC agents come into 0-3 year experience category out of 28 LIC agents 21 use sound risk management techniques and remaining 7 LIC agents use insurance techniques for managing cash flow of his clients

So we can say that majority LIC agents that come into different experience category use sound risk management techniques for managing cash flow of his clients

Cross Tabulation Areas and Investment products

C r o s s ta b u la tio n b e tw e e n a r e a & in v e s te n t p r o d u c t
35 30 No.of Respondents 25 19 20 18 6 18 1 14 14 4 1 12 15 11 11 10 5 0 M u t u a l F u n d E q u it y P ost B ank Debt In s u ra n c e P ro d u c ts 29 29 27 7 2 23

rlie f ro a d va s n a a s h ra m ro a d

9 78 7

89897

is a n p u r 44 212 ra k h ia l

INFERENCE: Out of 150 LIC agents, which come from different areas of Ahmedabad, chart shows their preferences towards investment products. First preference given to the insurance Second preference given to the mutual funds Third preference given to the equity Fourth preference given to the bank Fifth preference given to the post Last preference given to the debt

So we can say that LIC agents of different areas of Ahmedabad believe that insurance, mutual funds, equity is the best investment product for investment

Cross Tabulation Educations and Investment products

C ro sstab u latio n b e tw e e n E d u catio n & In v e stme n t P ro d u cts
1 00 80 No.of Respondents 60 40 53 43 25 29 5 5 2 B an k 2 3 D ebt 8 26 15 13 In s uranc e 90 und e rgraduate graduate pos tgra duate profes s ionalq ulifie d other

12 8 20 14 13 2 1 1 5 4 2 0 MF E qu ity P os t

In ve stm e n t P ro d u c ts
INFERENCE: Out of 150 LIC agents, which come from different educations category, chart shows their preferences towards investment products. First preference given to the insurance Second preference given to the mutual funds Third preference given to the equity Fourth preference given to the bank Fifth preference given to the post Last preference given to the debt

So we can say that LIC agents of different education category believe that insurance, mutual funds, equity is the best investment product for investment

Cross Tabulation Age and Investment products

C ro s s ta b u la tio n b e tw e e n a g e & in v e s tm e n t p r o d u c ts
70 60 no. of respondents 50 40 30 20 13 10 0 MF E q u ity P os t B ank Debt In s u ra n c e Iin v e stm e n t p ro d u c ts 36 23 28 8 6 16 12 2 16 3 1 6 6 2 7 15 11 13 22 31 36 17 60 2 1 to 3 0 3 1 to 4 0 4 1 to 5 0 m o re th a n 5 0

INFERENCE: Out of 150 LIC agents, which come from different age category, chart shows their preferences towards investment products. First preference given to the insurance Second preference given to the mutual funds Third preference given to the equity Fourth preference given to the bank Fifth preference given to the post Last preference given to the debt

So we can say that LIC agents of different age category believe that insurance, mutual funds, equity is the best investment product for investment

FINDINGS
With the interaction of LIC agents, we find out they believe that financial planning is necessary for getting investment decision. Majority LIC agents believe that financial planning should cover all areas of financial needs of clients. They believe that each and every financial decision affect other areas of finance. They also believe that their clients should adopt more easily to life changes (financial) in order to feel more secure. Majority LIC agents use sound risk management technique to manage the cash flow of their clients. LIC agents are believes in creating and managing accumulation of wealth, to generate future capital cash flow for clients. According to preferences of LIC agents insurance, mutual funds, equity is best investment product for investment. They believe in planning to ensure financial independent at retirement.

They also believe that financial planning fulfills the goal of my clients.

Majority

LIC agents

believe that planning is necessary for

conservation and distribution of assets. LIC agents have different types of tax saving plan for solving many tax issues of his clients. According to preferences of LIC agents insurance, ULIP schemes is best investment product for tax saving. Majority LIC agents ask expected return of his clients. They indispensable try to know the risk appetite of the client. Majority LIC agents offer long-term education plan like 5-7 years, more than 7 years plan etc of his clients. They also offer long-term marriage plan like 5-7 years, more than 7 years plan etc of his clients. Majority LIC agents, which come into different age category use sound, risk management techniques for managing cash flow of his clients. And also which come into different experience category use sound, risk management techniques for managing cash flow of his clients.

CONCLUSION
Financial planning providing direction and meaning to take financial decision of clients of respondents. LIC agents believe that financial planning is necessary for getting any investment decision According to LIC agents insurance, mutual funds, equity, is the best financial products for investment Insurance and ULIP schemes preferable for tax saving purpose. LIC agents have insurance, ULIP, only for tax saving purpose, they have no any idea about other tax saving products like ELSS, tax savings mutual funds etc They believe that in planning to ensure financial independent at retirement. LIC agents believe that planning is necessary for conservation and distribution of assets? Before investment LIC agents believe It is indispensable to know the risk appetite of the client

 Allowing the person to understand how each financial decision affects the other areas of finance; and Financial planning play major role to take any investment decision.

RECOMMENDATION
For company For tax saving purpose LIC agents use ULIP scheme that is

similar to MF so, the company should try to convert them as a mutual fund advisor Encourage the LIC agent by providing a long term plan As a financial planning is very complex process so, company

should train advisor in such a way that will reduce the complexity & make investment process easy For LIC agent Good knowledge of financial product and options, their risk-return profile, & strong understanding of the behavior & track record of various investment Familiarity with taxation & estate planning issues An understanding of the various stages in a clients life & wealth cycle & asset allocation that make sense for each of this stages

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