A

PROJECT STUDY REPORT

ON

COMPARATIVE ANALYSIS OF VARIOUS FINANCIAL INSTITUTIONS IN THE MARKET

BY
BABLI DIXIT

Reg. No. : 111042EMBA0071

Submitted to

KARNATAKA STATE OPEN UNIVERSITY

MUKTHAGANGOTRI, MYSORE 570 006
J !"#$0%& E'()*+(,*o+

Und ! "# $%& !'($()n )*+ DEEPALI MALODIYA 0L 1"%! ! 2

S%,-("" d ,.+ BABLI DI/IT MBA

Academic Session 201232014

PREFACE
MBA program is one of the most reputed professional courses in the field of Management. There is a study project as an integral part of MBA. As a complementary to that everyone has to submit a report on the work conducted in the industry. This report is thus prepared for the study project done at . The topic of the project is, !"M#A$AT%&' A(A)*S%S "+ &A$%",S +%(A(!%A) %(ST%T,T%"(S %( T-' MA$.'T/. The organi0ation shall make all possible efforts to have a secure and safe domain. The data1information is very important and most critical to the business re2uirements3 therefore proper measures should be adopted so that the information is well secured and protected.

BAB)% 4%5%T

ACKNO5LED6EMENT
% 7&! $$ -. $(n1 ! "#8n9$ ") -. &!): 1" ;%(d <<<<<<<< 8" CCMC= R($#(9 $# >#) #8$ , n ;%(d(n; *)!1 ") -. ! &)!" )n COMPARATIVE ANALYSIS

OF VARIOUS FINANCIAL INSTITUTIONS IN THE MARKET % am also thankful to all of my teachers and friends for their support and encouragement in finding out the appropriate material for this project report, without their thankless support and efforts, making this report would have been impossible for me. % am also thankful to 66666666666666. for providing me re2uired facilities in the department.% would also like to thank the whole respondents who provide me the best knowledge and for their help and cooperation throughout the project

BAB)% 4%5%T

KARNATAKA STATE OPEN UNIVERSITY

MUKTHAGANGOTRI, MYSORE 570 006
-.o/e0, 1e.,*2*0(,e T3*4 *4 ,o 0e.,*2" ,3(, BABLI DIXIT 5e(.*+g ,3e Reg. No. %%%06$EMBA007% 3(4 4 00e442 !!" 0o)7!e,e8 ,3e 7.o/e0, 9o.: o+ ;1OM-ARATI<E ANALYSIS O= <ARIOUS =INAN1IAL INSTITUTIONS IN THE MARKET> U+8e. ,3e g *8(+0e o2 ???????????????????????????. T3e 7.o/e0, .e7o., *4 4 5)*,,e8 ,o ,3e K(.+(,(:( S,(,e O7e+ U+*@e.4*," 2o. E'()*+(,*o+ J !"#$0%&.

Reg*4,.(. AE@(! (,*o+B

GUIDE#S 1ERTI=I1ATE
I here certify that the research work embodied in the dissertation entitled Stream Flow has been under taken and completed by BABLI DIXIT bearing the Reg. No. %%%06$EMBA007% under my guidance and supervision. I also certify that he has fulfilled all the requirements under the covenant governing the submission of dissertation to the KS ! for award of MBA.

Place: Da e :

Name & Signa !"e o# $!i%e

DE1LARATION

I, Ms. BABLI DIXIT, a Final Year Management Student o !!M!, "IS#I$%S#, &ere'( de)lare t&at I &a*e dul( )om+leted m( +ro,e)t on
;1OM-ARATI<E ANALYSIS O= <ARIOUS=INAN1IAL INSTITUTIONS IN THE MARKET>

or t&e a)ademi) (ear 2-.2/2-.3. T&e in ormation su'mitted is true and original to t&e 'est o m( 0no1ledge.

BABLI DIXIT.

E/ECUTIVE SUMMARY
2

The project !omparative Analysis of various +inancial %nstitutions in the market/ was done to get the idea, as well as knowledge, benefits and use of financial advisor in the present scenario. The basic objective behind the study carried out by me is to know much more about the prospects of +inancial #lanning in the growing economy. #eople should come out of the concept of just keeping their money in Savings Account and +i7ed 4eposits and should concentrate on their financial planning to ma7imi0e returns by taking proper guidance from financial planner. Most of the advisors provide e7pertise information and knowledge about various financial products, like bonds, mutual funds, insurance, e2uity market and real estate etc. The in8depth analysis of the report will help the reader know much more about the investors and financial advisors. %nvestors having low saving potential, growth of capital acts as a primary objective behind investments. %nvestors get high level of satisfaction from e7isting financial advisors, which depicts that there is a need of financial institutions to approach these investors in a proper manner so as to provide value additions to the saving potential and portfolio. The sum up, there has been a sustained effort and dedication involved to make this study a comprehensive market study but at the same time. The researcher is open to any kind of suggestions that further needs to be considered in respect to the course of his work.

T8,? )* C)n" n"$

P! *81 A19n)>? d; - n" E7 1%"(' S%--8!. C)n" n" !hapter (o. : = ; < @ 9 ? > B :A :: := !hapter (ame %ntroduction to the %ndustry %ntroduction to the organi0ation +inancial %nstitutions in the Market 9 ;< <: 9>

!omparative Study of 4ifferent #layers in the Market ?= Analysis of the !omparison $esearch Methodology +acts and +indings Analysis and %nterpretation !onclusion $ecommendation and Suggestions Appendi7 Bibliography ?> >A >; >@ :A< ::A ::@

CHAPTER 1 INTRODUCTION TO THE INDUSTRY

FINANCIAL ADVISORS3
5

82 O' !'( >3

#lanning for a secure financial future is not easy. *et increasingly, individuals are in charge of their own financial futures. Most are aware that planning is critical, yet donCt the have time or the e7pertise to develop a plan and make the needed financial decisions. So there arises a need for +inancial Advisors to manage the individualCs wealth and the whole process of managing this wealth is known as Dealth Management. There are a number of financial advisors offering a diverse portfolio of services to suit different financial re2uirements of their clients. %n order to accomplish the task, advisors help individuals or corporate manage their wealth appropriately throughE 0(2 In' $"- n" S)?%"()n$+ 3 The financial planner helps the individuals diversify their portfolio through alternative investment plans, mutual funds, e2uities, and even save for retirement through annuities. 0((2 F(n8n1(8? P?8nn(n;+ 3 +inancial #lanning is an e7ercise aimed to ensure availability of right amount of money at the right time to meet the individualCs financial goals. +inancial institutions plan individualCs current e7penditures and save for future short8term or long8term goals by analy0ing different options available. 0(((2 R "(! - n" P?8nn(n;+ 3 The financial planner guides their clients in planning for their financial re2uirements after retirement, by helping them identify goals, researching and analy0ing different opportunities to secure funds and make investments to suits their needs. 0('2 5 8?"# M8n8; - n"+ 3 %t is a comprehensive service to optimi0e, protect and manage the financial well8being of an individual, family or corporation. %ts basic definition covers advice on loans, investments and insurance to give a broad picture of how individuals should best deploy their financial resources. A broader picture may include ta7 advice, estate planning, business planning, charity foundations and other financial needs. these companies provide the assistance of professional financial advisors. These financial

.-

'ven though one of the most significant factors in our life is the state of our personal finances, we rarely spend time on managing them since unlike businesses. The reason being, we are not accountable to any one for our personal financial goals and results. As a result we tend to get careless in our financial matters. % know we all understand the importance of savings but let us not get confused between savings and investment. Mere savings Fputting aside a portion of earningsG do not insure or guarantee achievement of future financial goals.

,2 F(n8n1(8? P?8nn ! 05 8?"# P?8nn ! @ F(n8n1(8? Ad'($)!23

..

The financial planner helps identify various ta7able and non8ta7able investments. This is not a comprehensive list of services. They may differ from one financial management company to another. "ne can select the services according to their re2uirements, be it personal or professional. A financial planner work begins with a consultation with the client, from whom the planner obtains information on the clientCs finances and financial goals. The planner then develops a comprehensive financial plan that identifies problem areas, makes recommendations for improvement, and selects appropriate investments compatible with the clientCs goals, attitude toward risk, and e7pectation or need for a return on the investment. +inancial institutions usually meet with established clients to update them on potential investments and to determine whether the clients have been through any life changesHsuch as marriage, disability, or retirementHthat might affect their financial goals. +inding clients and building a customer base is one of the most important of a financial plannerCs job, because referrals from satisfied clients are an important source of new business. Many institutions also contact potential clients by giving seminars or lectures or meet clients through business and social contacts.

0(2 N

d *)! 8 *(n8n1(8? &?8nn !+

I -olistic in outlookE !+#s consider all circumstances, family needs, goals, values, and aspirations, while making recommendations. I #rofessionalsE !+#s protect privacy, strive to maintain the highest ethical standards and continually enhance skills and credentials through continuing education. I 'ducational in natureE !+#s guide one through options and e7plain the clearly to help make the best choices. I !ommitted to successE -olistic financial planning is a process, not an event, and commit to adjusting plan as life goals change. .2

0((2 R)? )* F(n8n1(8? P?8nn !A$

82 D *(n(n; .)%! 6)8?$+ 3 A planner will take note of and record all your financial goals. *ou save for a variety of reasonsE to buy a house and a car, to educate your children, to set them up in business, to get them married, to go on vacations, and, finally, to give yourself a comfortable life in retirement. But not all of us get around to defining what JcomfortableC retirement means or JgoodC education means in money terms. ,2 S8'(n; *)! "# -+ 3 "nce these goals are written down, you can clearly see what you need to save today to meet these goals. The concept of JsavingsC changesK from Jsomething thatCs left overC to Jsomething that you target every monthC. The planner helps with your budgeting by making you write down your income and e7penses in great detail. -e helps you rationali0e wasteful e7penses and establish a system of generating surpluses every month. "nce you see the magnitude of your investment goals and the need to save properly, the desire for the latest in everything diminishes. %n other words, planning is about creating wealthKand managing it efficiently. 12 C)' !(n; R($9+ 3 The planner then assesses your insurance needs, which varies from person to person and from age to age. As a young bachelor with no dependants, youCll need disability insurance rather more than life insurance, but the minute you get married and you have a stay8at8home wife whom you support, you need life insurance as well. Dhen the kids come along and your old parents too become your dependants, the outlay on your life insurance will have to increase, as will that on disability. The planner will help you identify your insurance needs, 2uantify them and then suggest policy options. d2 P?8nn(n; *)! R "(! - n"+ 3 The planner then looks at your retirement needs and plans for the time when youCll no longer be earning. *our contributions to your '#+ and ##+ accounts will, of course, help you on that countKprovided youCve been disciplined and not made withdrawals from these accounts halfway through. 2 M89(n; I" H8&& n+ 3 The planner has taken so long just to establish what you want out of life in money terms3 even now, the actual investment is two steps away. The planner will

.3

now assess your Jrisk profileC. This is just a way to see what level of risk youCre comfortable with. %t would depend on your age and your family circumstances. *2 T)"8? F(n8n1(8? S)?%"()n$+ 3 A planner has a Jbig pictureC vision and is able to see the inter8linkages of all your goals, e7penses and investments. ;2 T# B8?8n1(n; A1"+ 3 A plannerCs responsibility doesnCt, however, end with your buying a product. -e still has to hand8hold you, for instance, when the stock market tanks or tops. %mprudent investors tend to buy when the market is high and sell in a slump. The planner educates you on the merits of a long8term approach and regular investing and helps you rebalance your portfolio.

12 F(n8n1(8? P?8nn(n;3
J+inancial planningC is the process of charting out the money course of your life. %tCs like having a financial roadmap that guides your every step till you pass on the baton to the ne7t generation. %n other words, it is a process in which an individual sets long8term financial goals through investments, ta7 planning, asset allocation, risk management, retirement planning and estate planning. Most of us approach our financial lives like the disorgani0ed traveler who gets to his destination eventually and perhaps even enjoys the rough ride. De think we have a clear roadmap in mind, but our financial lives are marked by ad8hoc decisions and capitulation to the temptations of the flavors of the financial season.

0(2 B n *("$ )* F(n8n1(8? P?8nn(n;

A sound and meticulous +inancial #lanning will have following enumerated benefitsE I Sophisticated financial advice to cope with changing life situation I (on8biased opinion on oneCs insurance needs I -elp dealing with oneCs retirement planning I "ptimum asset allocation and investment strategy formulation I 'fficient ta7 strategy and estate planning

.4

In' $"- n"$ 3

82 O' !'( >
The money you earn is partly spent and the rest is saved for meeting future e7penses. %nstead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called %nvestment. %n other words, %nvestment is Jthe act of committing money or capital to an endeavor with the e7pectation of obtaining an additional income or profit.C %tLs actually pretty simpleE investing means putting your money to work for you. 'ssentially, itLs a different way to think about how to make money. There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, or real estate Famong many other thingsG, or starting your own business. Sometimes people refer to these options as Minvestment vehicles,M which is just another way of saying Ma way to invest.M 'ach of these vehicles has positives and negatives, which will be discussed later in the thesis. The point is that it doesnLt matter which method you choose for .5

investing your money, the goal is always to put your money to work so it earns you an additional profit. 'ven though this is a simple idea, itLs the most important concept in the current scenario to understand.

,2 B8$(1 In' $"- n" O,: 1"(' $

%nvesting is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The options for investing our savings are continually increasing, yet every single investment vehicle can be easily categori0ed according to three fundamental characteristics 8 Safety, %ncome and Nrowth 8 which also correspond to types of investor objectives. Dhile it is possible for an investor to have more than one of these objectives, the success of one must come at the e7pense of others. -ere we e7amine these three types of objectives, the investments that are used to achieve them and the ways in which investors can incorporate them in devising a strategy.

.2

0(2 S8* ".

#erhaps there is truth to the a7iom that there is no such thing as a completely safe and secure investment. *et we can get close to ultimate safety for our investment funds through the purchase of government8issued securities in stable economic systems, or through the purchase of the highest 2uality corporate bonds issued by the economyLs top companies.

.3

Such securities are arguably the best means of preserving principal while receiving a specified rate of return. The safest investments are usually found in the money market and include such securities as Treasury bills FT8billsG, certificates of deposit, commercial paper

.4

or bankersL acceptance slips3 or in the fi7ed income FbondG market in the form of municipal and other government bonds, and in corporate bonds.

0((2 In1)-owever, the safest investments are also the ones that are likely to have the lowest rate of income return, or yield. %nvestors must inevitably sacrifice a degree of safety if they want to increase their yields. This is the inverse relationship between safety and yieldE as yield increases, safety generally goes down, and vice versa.

0(((2 6!)>"# )* C8&("8?

Nrowth of capital is most closely associated with the purchase of common stock, particularly growth securities, which offer low yields but considerable opportunity for increase in value. Blue8chip stocks, by contrast, can potentially offer the best of all worlds by possessing reasonable safety, modest income and potential for growth in capital generated by long8term increases in corporate revenues and earnings as the company matures.

S 1)nd8!. O,: 1"(' $ 0(2 C)$" )* In*?8"()n

"ne needs to invest wisely to meet the cost of %nflation. %nflation causes money to lose value because it will not buy the same amount of a good or a service in the future as it does now or did in the past. +or e7ample, if there was a 9O inflation rate for the e7t =A years, a $s.:AA purchase today would cost $s.;=: in =A years. $emember to look at an investmentCs JrealC rate of return, which is the return after inflation. The aim of investments should be to provide a return above the inflation rate to ensure that the investment does not decrease in value. +or e7ample, if the annual inflation rate is 9O, then the investment will need to earn more than 9O to ensure it increases in value.

0((2 T87 M(n(-(B8"()n

An investor may pursue certain investments in order to adopt ta7 minimi0ation as part of his or her investment strategy. A highly8paid e7ecutive, for e7ample, may want to seek investments with favorable ta7 treatment in order to lessen his or her overall income ta7 burden. Making contributions to an %$A or other ta78sheltered retirement plan can be an .5

effective ta7 minimi0ation strategy. By far, ta78saving is the most compelling reason for investors to set aside money for the long term.

0(((2 M8!9 "8,(?(". @ L(C%(d(".

!ommon stock is often considered the most li2uid of investments, since it can usually be sold within a day or two of the decision to sell. Bonds can also be fairly marketable, but some bonds are highly illi2uid, or non8tradable, possessing a fi7ed term. Similarly, money market instruments may only be redeemable at the precise date at which the fi7ed term ends.

0('2 R "(! - n"

Anyone who will retire needs to plan for it. There is more than one reason to save for retirement. The all important reason is the rising cost of living. %tCs called inflation. %f you start planning for retirement early on, you can bridge the gap between what you have in your hand today and what you would like to have when you retire. %f you begin saving for retirement early on in your life, you can set aside smaller amounts. *ou can also take on more risk by investing larger amounts in e2uities i.e., stocks and e2uity funds. %f you delay saving for retirement, you will have to invest larger sums of money to save for the same amount3 also the share of e2uity investments as a portion of your retirement savings will have to be lower.

2-

T.& $ )* In' $"- n"$3 82 O' !'( >

There are many ways to invest your money. "f course, to decide which investment vehicles are suitable for you, you need to know their characteristics and why they may be suitable for a particular investing objective.

2.

I 4ebt Market I Bonds I Mutual +unds I '2uity Market I %nsurance I !ash I Nold I $eal 'state I -ome )oans

22

T.& $ )* In' $"- n"$

$eturn '2uity Bonds !o. 4ebentures !o. +4s Bank 4eposits ##+ )ife %nsurance Nold $eal 'state Mutual +unds Safety -igh Moderate Moderate Moderate )ow Moderate )ow Moderate -igh -igh &olatility )ow -igh Moderate )ow -igh -igh -igh -igh Moderate -igh )i2uidity -igh -igh Moderate Moderate Moderate )ow )ow )ow )ow -igh )ow Moderate )ow )ow Moderate Moderate -igh )ow Moderate -igh !onvenience Moderate -igh )ow Moderate -igh -igh Moderate Nold )ow -igh

0(2 D ," In$"!%- n"$

4ebt instruments protect your capital, therefore the importance of a solid debt portfolio. This not only gives stability, but also offers you optimal returns, li2uidity and ta7 benefits. 4ebt products, besides safeguarding your capital, can be used to meet short, medium and long8 term financial needs.

S#)!"3T !- O&"()n$+
They are good for short term goals, you can look at li2uid funds, floating rate funds and short8term bank deposits as options for this category of investments. )i2uid funds have retuned around @O post8ta7 returns as compared to @.9O post8ta7 that your one8year >O bank fi7ed deposit gives you. So, if you have funds for investment for over a period of one year, it is better to go in for bank deposits. 82 F(7 d M8"%!(". P?8n 0FMP2+ %f you know e7actly for how much time you need to invest your surplus, a smarter option is to invest in +M#s. They are shorter8tenured debt schemes that buy and hold securities till maturity, thereby eliminating the interest rate risk. Try and opt for +M#s that offer a double inde7ation benefit. +und houses usually launch double8 inde7ation +M#s during the end of the financial year so that they cover two financial year closings.

23

M d(%- D L)n;3T !- O&"()n$+

These options typically offer low or virtually no li2uidity. They are, however, largely useful as income accumulation tools because of the assured interest rates they offer. These instruments Fsmall savings schemesG should find place in your long8term debt portfolio. 82 E-&?). P!)'(d n" F%nd 0EPF2+ #+ will also be counted as your debt component

which can be ma7imi0ed to =AO of your basic salary3 the company contributes another :=O. The contribution will yield a return of >O and will be eligible for ta7 benefits under Section >A!. ,2 P%,?(1 P!)'(d n" F%nd 0PPF2+ A withdrawal is permissible every year from the seventh financial year of the date of opening of the account and the amount of withdrawal will be limited to @AO of the balance at credit at the end of the <th year immediately preceding the year in which the amount is withdrawn or at the end of the preceding year whichever is lower. -owever, it doesnCt score too well on li2uidity. ##+ is a great investment if you have age on your side so that you can ma7imi0e the benefit by e7tending the period of holding. 12 N8"()n8? S8'(n;$ C !"(*(18" 0NSC2+ Dhile the interest component gets accrued

Fdeemed to be reinvestedG, it is returned to you along with the principal only on maturity. -ence the returns are both fi7ed and assured. %nvestments up to $s.:,AA,AAA are eligible 24

for deduction from income under Section >A!. -owever interest earnings are fully ta7able. #remature encashment is only allowed under specific circumstances such as death of the holder, forfeiture by the pledge or under courtCs order. d2 K($8n V(98$ P8"!8 0KVP2+ )i2uidity in .&# is available any time after =.9 years from the investment date, but a loss of interest has to be borne on premature li2uidation. The interest earned is fully ta7able as per your ta7 slab rate. 2 P)$" O**(1 T(D R 1%!!(n; D &)$("$ 0POTD2+ *ou can e7it a #"T4 within si7

months of starting one without receiving any interest and if with8drawn after one year then = percentage points are deducted. There are no ta7 benefits in this scheme. *2 P)$" O**(1 M)n"#?. In1)- S1# - 0POMIS2+ #remature withdrawal is permitted if deposit is more than one year old. A deduction of @O is levied from the principal amount if withdrawn prematurely. ;2 S n()! C("(B n$ S8'(n;$ S1# - 0SCS2+ The tenure is @ years and can be e7tended by another ; years. )i2uidity is available after one year but it proves costly as there is a penalty of :.@O of the amount deposited. (o ta7 break and now you need to pay T4S too. #2 B8n9 D &)$("$+ These are fle7ible, li2uid and offer good interest rates today. Make use of the two8in8one savings accounts that banks offer Fsurplus over a specified sum is transferred to a depositG to get a higher return on the money accumulating in your savings account. %n the recent Budget, the benefit of Section >A! was also e7tended to bank deposits, which are kept with scheduled banks for a minimum period of five years. The notification for this is yet to come.

0((2 B)nd$ 82 O' !'( >

25

%t is a fi7ed income instrument issued for a period of more than one year with the purpose of raising capital. The central or state government, corporations and similar institutions sell bonds. A bond is generally a promise to repay the principal along with a fi7ed rate of interest on a specified date, called the Maturity 4ate. The main attraction of bonds is their relative safety. %f you are buying bonds from a stable government, your investment is virtually guaranteed, or risk8free. The safety and stability, however, come at a cost. Because there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower than other securities.

,2 T87 S8'(n; B)nd$

These are those bonds that have a special provision that allows the investor to save on ta7. '7amples of such bonds areE aG %nfrastructure Bonds bG !apital Nains Bonds a. $ural 'lectrification !orporation F$'!G Bonds b. (ational -ighway Authority of %ndia F(-A%G c. (ational Bank for Agriculture P $ural 4evelopment d. $B% Ta7 $elief Bonds

0(((2 M%"%8? F%nd$ 82 O' !'( >

22

A mutual fund is a body corporate registered with S'B% that pools money from the individuals1corporate investors and invests the same in a variety of different financial instruments or securities such as '2uity Shares, Novernment Securities, Bonds, 4ebentures, etc. The income earned through these investments and the capital appreciations reali0ed are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual +und 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. Mutual fund units are issued and redeemed by the Asset Management !ompany FAM!G based on the fundCs net asset value F(A&G, which is determined at the end of each trading session. Mutual funds are considered to be the best investments as on one hand it provides good returns and on the other hand it gives us safety in comparison to other investments avenues.

5)!9(n; )* 8 M%"%8? F%nd 3

,2 T.& $ )* M%"%8? F%nd$

23

Mutual fund schemes may be classified on the basis of its structure and its investment objective.

B. S"!%1"%!
(E O& n3End d F%nd$ %n an open8ended fund, investors can buy and sell units of the fund, at (A& related prices, at any time, directly from the fund. This is called an open ended fund because the pools of funds is open for additional sales and repurchases. "pen ended funds have to balance the interest of investors who come in, investors who go out and investors who stay invested. ((E C?)$ d3End d F%nd$ A closed ended fund is open for sale to investors for a specific period, after which further sales are closed. Any further transaction for buying the units or repurchasing them, happen in the secondary markets, where closed end funds are listed. %n a closed ended fund, thus, the pool of funds can technically be kept constant. %nvestors in closed end funds receive either certificates or depository receipts, for their holdings in a closed end mutual fund

(((E In" !'8? F%nd$ %nterval funds combine the features of open8ended and close8ended schemes. They are open for sale or redemption during pre8determined intervals at (A& related prices.

B. (n' $"- n" ),: 1"('

(E 6!)>"# F%nd$ The aim of growth funds is to provide capital appreciation over the medium to long8 term. Such schemes normally invest a majority of their corpus in e2uities. %t has been proven that returns from stocks, have outperformed most other kind of investments held over the long term. Nrowth schemes are ideal for investors having a long8term outlook seeking growth over a period of time.

((E In1)- F%nd$

24

The aim of income funds is to provide regular and steady income to %nvestors. Such schemes generally invest in fi7ed income securities such as bonds, corporate debentures and Novernment securities. %ncome +unds are ideal for capital Stability and $egular %ncome.

(((E B8?8n1 d F%nd$ 25

The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in e2uities and fi7ed income securities in the proportion indicated in their offer documents. ('E M)n . M8!9 " F%nd$ The aim of money market funds is to provide easy li2uidity, preservation of capital and moderate income. These schemes generally invest in safer short8term instruments such as treasury bills, certificates of deposit, commercial paper and inter8bank call money. $eturns on these schemes may fluctuate depending upon the interest rates prevailing in the market.

'E L)8d F%nd$ A )oad +und is one that charges a commission for entry or e7it. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and e7it loads range from :O to =O. '(E N)3L)8d F%nd$ A (o8)oad +und is one that does not charge a commission for entry or e7it. That is, no commission is payable on purchase or sale of units in the fund.

O"# ! S1# - $
(E T87 S8'(n; S1# - $ These schemes offer ta7 rebates to the investors under specific provisions of the %ndian %ncome Ta7 laws as the Novernment offers ta7 incentives for investment in specified avenues. %nvestments made in '2uity )inked Savings Schemes F')SSG and #ension Schemes are allowed as deduction u1s >> of the %ncome Ta7 Act, :B9:.

B8n9$ '@$ -%"%8? *%nd$

3-

#A$AM'T'$S $eturns Administrative e7p. $isk %nvestment options (etwork )i2uidity Quality of assets %nterest calculation

BA(.S )ow -igh )ow )ess -igh penetration At a cost (ot transparent

M,T,A) +,(4S Better )ow Moderate More )ow but improving Better Transparent

Minimum balance between 'veryday :Ath. P ;Ath. of every month

Nuarantee

Ma7imum $s.: )akh on (one deposits

('2 EC%(". 82 O' !'( >

'2uities are often regarded as the best performing asset class vis8R8vis its peers over longer time frames. -owever e2uity8oriented investments are also capable of e7posing investors to the highest degree of volatility and risk. There are a number of factors, which affect the performance of e2uities ad studying and understanding all of them on an ongoing basis, can be challenging for most. Stock markets have always been a draw for investors for their ability to generate wealth over the long8term. +ear, greed and a short8term investment approach act as hurdles that frustrate the investor from achieving his1her investment goals. *ou need to keep in mind the risk associated with the stocks. *ou also need to diversify your e2uity portfolio i.e., include 3.

more stocks and sectors. This helps you diversify your investment risk, so even if something were to go wrong with a stock1industry in your portfolio, other stocks1industries should help you shore up your portfolio.

0'2 In$%!8n1 82 O' !'( >

)ife insurance has traditionally been looked upon pre8dominantly as an avenue that offers ta7 benefits while also doubling up as a saving instrument. The purpose of life insurance is to indemnify the nominees in case of an eventuality to the insured. %n other words, life insurance is intended to secure the financial future of the nominees in the absence of the person insured. The purpose of buying a life insurance is to protect your dependants from any financial difficulties in your absence. %t helps individuals in providing them with the twin benefits of insuring themselves while at the same time acting as a compulsory savings instrument to take care of their future needs. )ife insurance can aid your family on a rainy day, at a time when help from every 2uarter is welcome and of course, since some plans also double up as a savings instrument, they assist you in planning for such future needs like childrenCs marriage, purchase of various household items, gold purchases or as seed capital for starting a business.

life is full of dangers, but with insurance, you can at least ensure that you and your dependents donCt suffer. %tCs easier to walk the tightrope if you know there is a safety net. *ou should try and take cover for all insurable

32

life is full of dangers, but with insurance, you can at least ensure that you and your dependents donCt suffer. %tCs easier to walk the tightrope if you know there is a safety net. *ou should try and take cover for all insurable risks. %f you are aware of the major risks and buy the right products, you can cover 2uite a few bases. The major insurable risks are as followsE I )ife I -ealth I %ncome I #rofessional -a0ards I Assets I "utliving Dealth I 4ebt $epayment

T.& $ )* In$%!8n1 P)?(1( $+

82 T !- P?8n$ A term plan is the most basic type of life insurance plan. %t is the most cost8effective life insurance product. ,nlike other plans that come with an investment or savings component, term plans are products that cover only your life. This means your dependents or nominees get the sum assured on your death. A term plan offers life cover at a very nominal cost. This is due to the fact that term plan premiums include only mortality charges and sales and administration e7penses. There is no savings element.

,2 M)n . B819 P?8n 33

A money back plan aims to give you a certain sum of money at regular intervals3 simultaneously it also provides you with life cover. Money back plans are especially useful in case you need money at regular intervals for your childCs education, marriage, etc. 12 Un(" L(n9 d In$%!8n1 P?8n$ 0ULIP$2 ,)%#s basically work like a mutual fund with a life cover thrown in. They invest the premium in market8linked instruments like stocks, corporate bonds and government securities FgsecsG. The basic difference between ,)%#s and traditional insurance plans is that while traditional plans invest mostly in bonds and gsecs, ,)%#sC mandate is to invest a major portion of their corpus in stocks. -owever, investments in ,)%# should be in tune with the individualCs risk appetite. ,)%#s offer fle7ibility to the policy holder K the policy holder can shift his money between e2uity and debt in varying proportions. d2 P n$()n @ R "(! - n" P?8n$ #lanning for retirement is an important e7ercise for any individual. A retirement plan from a life insurance company helps an individual insure his life for a specific sum assured. At the same time, it helps him in accumulating a corpus, which he receives at the time of retirement.

2 End)>- n" P?8n$ %ndividuals with a low risk appetite, who want an insurance cover, which will also give them returns on maturity could consider buying traditional endowment plans. Such plans invest most of their money in specified debt instruments like corporate bonds, government securities FgsecsG and the money market.

0'(2 C8$# 82 O' !'( >

%nvestors must hold a sufficient amount of their assets in cash i.e. in li2uid form3 this will help them tide over unplanned e7penditures and other contingencies. Also one must remember that e2uity8oriented investments are made with a long8term perspective and li2uidating them to meet any contingency may prove to be a loss8making proposition 34

depending on the market conditions. -oldings in cash include amount held in savings bank accounts, li2uid funds and short8term fi7ed deposits.

0'((2 6)?d 82 O' !'( >

%n %ndia, gold has traditionally played a multi8faceted role. Apart from being used for adornment purpose, it has also served as an asset of the last resort and a hedge against inflation and currency depreciation. %ndia has more than :;,AAA tones of hoarded gold, which translates to around $s.9,@A,AAA crores. Nold is an asset class thatCs associated with safety. -owever, the ups and down that the yellow metal has seen over the last few months, has made it look similar to other market investment assets. This is due to an unprecedented demand for gold as an investment avenue since the last couple of years. Nold has attracted a high level of attention in last couple of years, with an image shift from a non8volatile asset to a hot investment avenue. The future outlook for the metal looks positive given its proven linear relationship with the crude oil and non8linear with the ,S dollar. The much8awaited gold e7change8traded funds would provide a very good vehicle to the investors and a sensible alternative to the current forms available for investment.

0'((2 R 8? E$"8" 82 O' !'( >

$eal estate is a great investment option, as it gives you capital appreciation and rental income. %tCs an investment option since it fights inflation. The fundamentals for investing in property markets remain strong in %ndia 8 relatively low interest rates, strong capital flows, high employment growth, abundant li2uidity, attractive demographics Fyoung population and migration from DestG, increase in affordability, and a large supply of stock to keep up with demand and focus on 2uality. The price you pay for a property should reflect the future rent1income at which you let it. As in the stock market, the prices in real estate are also 35

driven by sentiments. All that is re2uired to reverse a price movement is a change in sentiment.

0'(((2 H)- L)8n$ 82 O' !'( >

A home loan helps one to buy more than just a home. Buying a property is perhaps the single largest investment decision an individual has to make in his lifetime. Therefore, he needs to plan for his finances well before he decides to invest a significant amount of money in buying a home. -owever, the availability of home loans has made life a lot easier for individuals today.

32

CHAPTER 2 INTRODUCTION TO OR6ANISATION

33

A,)%" HDFC ,8n9 ?(-(" d

The -ousing 4evelopment +inance !orporation )imited F-4+!G was amongst the first to receive an Lin principleL approval from the $eserve Bank of %ndia F$B%G to set up a bank in the private sector, as part of the $B%Ls liberali0ation of the %ndian Banking %ndustry in :BB<. The bank was incorporated in August :BB< in the name of L-4+! Bank )imitedL, with its registered office in MuBBAi, %ndia. -4+! Bank commenced operations as a Scheduled !ommercial Bank in Sanuary :BB@.

V($()n
To become a world class Bank

34

M($$()n 8nd B%$(n $$ $"!8" ;.

"ur mission is to be Ma Dorld !lass %ndian BankM, benchmarking ourselves against international standards and best practices in terms of product offerings, technology, service levels, risk management and audit P compliance. The objective is to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the BankLs risk appetite. De are committed to do this while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. "ur ,%$(n $$ $"!8" ;. emphasi0es the followingE %ncrease our market share in %ndiaCs e7panding banking and financial services industry by following a disciplined growth strategy focusing on 2uality and not on 2uantity and delivering high 2uality customer service. )everage our technology platform and open scalable systems to deliver more products to more customers and to control operating costs. Maintain our current high standards for asset 2uality through disciplined credit risk management. 4evelop innovative products and services that attract our targeted customers and address inefficiencies in the %ndian financial sector. !ontinue to develop products and services that reduce our cost of funds. +ocus on high earnings growth with low volatility.

35

P!)-)" !$
-4+! is %ndiaLs premier housing finance company and enjoys an impeccable track record in %ndia as well as in international markets. Since its inception in :B??, the !orporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. %ts outstanding loan portfolio covers well over a million dwelling units. -4+! has developed significant e7pertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. Dith its e7perience in the financial markets, a strong market reputation, large shareholder base and uni2ue consumer franchise, -4+! was ideally positioned to promote a bank in the %ndian environment.

B%$(n $$ *)1%$
-4+! BankLs mission is to be a Dorld8!lass %ndian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bankLs risk appetite. The bank is committed to 4-

maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. -4+! BankLs business philosophy is based on four core values 8 "perational '7cellence, !ustomer +ocus, #roduct )eadership and #eople.

C8&("8? S"!%1"%!
As on ;:st March, =AAB the authorised share capital of -4+! Bank is $s. @@A crore. The paid8up capital as on the said date is $s. <=@, ;>,<:,ABA18 F <=,@;,><,:AB e2uity shares of $s :A18 eachG. The -4+! Nroup holds :B.;>O of the BankLs e2uity and about :?.?A O of the e2uity is held by the A4S 4epository Fin respect of the bankLs American 4epository Shares FA4SG %ssueG. =?.9B O of the e2uity is held by +oreign %nstitutional %nvestors F+%%sG and the Bank has about @,<>,??< shareholders. The shares are listed on the BoBBAy Stock '7change )imited and The (ational Stock '7change of %ndia )imited. The BankLs American 4epository Shares F A4S G are listed on the (ew *ork Stock '7change F(*S'G under the symbol L-4BL and the BankLs Nlobal 4epository $eceipts FN4$sG are listed on )u7embourg Stock '7change under %S%( (o ,S<A<:@+=AA=.

C,)& 8nd "(- $ ,8n9 8-8?;8"()n

"n May =;, =AA>, the amalgamation of !enturion Bank of #unjab with -4+! Bank was formally approved by $eserve Bank of %ndia to complete the statutory and regulatory approval process. As per the scheme of amalgamation, shareholders of !Bo# received : share of -4+! Bank for every =B shares of !Bo#. The merged entity will have a strong deposit base of around $s. :,==,AAA crore and net advances of around $s. >B,AAA crore. The balance sheet si0e of the combined entity would be over $s. :,9;,AAA crore. The amalgamation added significant value to -4+! Bank in terms of increased branch network, geographic reach, and customer base, and a bigger pool of skilled manpower.

4.

%n a milestone transaction in the %ndian banking industry, Times Bank )imited Fanother new private sector bank promoted by Bennett, !oleman P !o. 1 Times NroupG was merged with -4+! Bank )td., effective +ebruary =9, =AAA. This was the first merger of two private banks in the (ew Neneration #rivate Sector Banks. As per the scheme of amalgamation approved by the shareholders of both banks and the $eserve Bank of %ndia, shareholders of Times Bank received : share of -4+! Bank for every @.?@ shares of Times Bank.

D($"!(,%"()n n ">)!9
-4+! Bank is head2uartered in MuBBAi. The Bank at present has an enviable network of over :<:= branches spread over @=> cities across %ndia. All branches are linked on an online real8time basis. !ustomers in over @AA locations are also serviced through Telephone Banking. The BankLs e7pansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing1settlement bank to various leading stock e7changes, the Bank has branches in the centers where the (S'1BS' have a strong and active member base. The Bank also has a network of about over ;=B@ networked ATMs across these cities. Moreover, -4+! BankLs ATM network can be accessed by all domestic and international &isa1Master!ard, &isa 'lectron1Maestro, #lus1!irrus and American '7press !redit1!harge cardholder

42

The Bank also has a network of about over ;=B@ networked ATMs across these cities. Moreover, -4+! BankLs ATM network can be accessed by all domestic and international &isa1Master!ard, &isa 'lectron1Maestro, #lus1!irrus and American '7press !redit1!harge cardholders.

43

CHAPTER 4 FINANCIAL INSTITUTIONS IN THE MARKET

44

A well82ualified financial planner like a !ertified +inancial #lanner F!+#G would work with a person to prepare his plan. A !+# is finance savvy and combines the objectivity and trust, developed through years of e7perience and e7pertise in planning oneCs personal finance.

CERTIFIED FINANCIAL PLANNERCM certification or !+#!Mcertification is an international program in the field of +inancial #lanning, wealth management and financial advisory services.+inancial #lanning is one of the fastest growing careers across the world. Being one of the fastest growing economies,%ndia currently has around @ crore families with investible surplus. Assuming one financial planner is handling appro7. :,AAA lients we need at least @A,AAA !ertified+inancial #lanners in %ndia immediately. This is set to grow at a faster rate. !+#!Mcertification was rated as Nold Standard in +inancial #lanning by the DAll StreeT 45

SournAl in the year =AA9. CERTIFIED FINANCIAL PLANNERCM certification or !+#!M!ertification is a mark of e7cellence granted to individuals whomeetthe stringent standards of education, e7amination, e7perience and ethics. %t is themost prestigious and internationally accepted +inancial #lanning certification recogni0ed and respected by the global financial community. !+#!M !ertification is the highest level of certification in the field of +inancial #lanning worldwide with over :,:>,=<@ !+#!M certificants, who are widely respected by consumers, professionals and industry.

certification is for financial services professionals, customer relationship officers, insurance agents, stock brokers, those looking to e7pand their careers in the financial services business, and graduates who want to be professionally and globally recogni0ed.

42

+inancial #lanning is one of the fastest8growing professions across the world and +inancial #lanners are the most sought after professionals by a fast growing working population that earns well, and needs e7pert handling of their finances. The opportunities are aplenty with Banks, +inancial #lanning outfits, Dealth Managers, life %nsurers, Accounting +irms, Stock brokers seeking professionals with such e7pertise. +inancial #lanners offer e7pert opinions on issues related to retirement planning, estate planning, ta7 planning, investment planning, insurance planning, financial management of small businesses and trusts, stock brokering, debt and risk analysis. needless to say a career as a +inancial #lanner can prove both challenging and rewarding. recogni0ing +inancial #lanningCs occupational benefits, there are many surveys that indicate a career in +inancial #lanning as the top career choice worldwide. Most

+inancial #lanners enjoy relatively low stress, have a high earning potential and enjoy a high degree of workplace autonomy. The personal satisfaction element cannot be underestimated. &ery often, independent +inancial #lanners find that people are just overwhelmed and need direction, so itCs their job to listen, understand their situation and offer some options that will help them. %t gives them satisfaction to help people do better, not just with their finances but with blending the financial side with the other sides of clientsC lives so that they can achieve their goals.

I enhanced career and employment opportunities in +inancial Services Sector. I #ersonal satisfaction in knowing you have earned the professionCs highest standard and met the global benchmark. I Satisfied clients who appreciate the comprehensive approach to +inancial #lanning and e7tend long term relationships and referrals. I *our e7pertise and credibility as a 2ualified professional is instantly communicated. I More revenue streams by increasing your product and service offering to your clients. I enhanced Social Status by joining the league of professionals. I recognition in over =; countries across the world. I opportunities to showcase your knowledge on +inancial #lanning P Advising 43

through various media vehicles. +inancial #lanners may earn in any of the following three waysE :G A #lanner can be paid by a salary from the company for which the #lanner works3 by fees based on an hourly rate, a flat rate, or on a percentage of the assets and1or income. =G By commissions paid by a third party from the products sold to clients to carry out the +inancial #lanning recommendations. ;G By a combination of fees and commissions whereby fees are charged for the amount of work done to develop +inancial #lanning recommendations and commissions are received from any product sold. As the profession is in its nascent stage various models are being tried and tested by the +inancial #lanners in %ndia. But surely over a period of time the clear trend is towards a fee8only model like other professions, i.e. medicine, law, accountancy, etc.

44

+inancial #lanning Standards Board %ndia F+#SB %ndiaG offers the !erT%+%e4 +%(A(!%A) #)A(('$!Mcertification or !+#!M certification #rogram. +#SB %ndia is the sole licensing body that awards !+#!M certification in %ndia through an agreement with uS based +#SB, ltd. The mission of +#SB %ndia is to help benefit the public by granting the !+#!Mcertification and upholding it as the recogni0ed standard of e7cellence for #ersonal +inancial #lanning. !+#!M certification is awarded by affiliate organi0ations of +#SB, ltd. in their respective countries of operation. .indly note +#SB %ndiaCs authori0ed 'ducation #roviders are only training and administrative entities authori0ed by +#SB %ndia and not the !+#!M certification awarding bodies. +#SB %ndia reserves the rights of awarding and relin2uishing !+#!M certification as per the certification policies. +inancial #lanning Standards Board %ndia F+#SB %ndiaG is a #ublic K #rivate enterprise and a #rofessional Standards Setting body that proactively guides the development and promotion of standards for +inancial #lanning professionals to benefit the public in the country. +#SB %ndia closely works with all the stakeholdersC vi0. the Novernment, the regulators, the %ndustries1Associations, the !orporations, the Media and the Neneral #ublic to achieve its objectives. %t is a #rofessional !ertification organi0ation, part of leading Nlobal !onfederation established by prominent financial service corporations with an objective to professionali0e the concept of +inancial #lanning in %ndia. +#SB %ndia is supported by @A +inancial Services organi0ations in the country as its !harter Members.

*es, currently !+# certification is offered and recogni0ed in =; countries including Australia, Austria, Bra0il, !anada, !hina, !hinese Taipei, +rance, Nermany, -ong .ong, %ndonesia, %reland, Sapan, Malaysia, new Tealand, netherland, republic of .orea, Singapore, South Africa, Swit0erland, Thailand, united .ingdom and united States of America. +#SB, ltd. enters into licensing and affiliation agreements with non8profit organi0ations For their e2uivalentG around the world that allows the organi0ations to establish and operate the !+# certification program in a country or region. +#SB Affiliates who meet and maintain +#SBCs affiliation criteria of high 45

standards are authori0ed to administer the !+# certification program on behalf of +#SB in a country or region. +#SB %ndia is one of the Affiliates of +#SB, ltd. !+# certification undertaken in any of the affiliate country is recogni0ed globally and governed by cross border policy usage. N)"BA) !",(T "+ !+# !'$T%+%!A(TS Fas in 4ecember =AA>G !ountry1$egion (o. of !+# !ertificants

To benefit the public, +#SB regulates how !+# professionals use +#SBCs !+# or 5-

!erT%+%e4 +%nAn!%Al #lAnner marks outside the borders of the country or region in which they first received !+# certification.%ncidental ,se+#SB permits incidental use of the !+# marks by !+# professionals outside the country or region of their initial certification. %ncidental use consists of displays of the !+# marks in1onE I articles published in a new country or region. I business cards or brochures distributed while traveling abroad. I websites targeted toward stakeholders in the country or region of initial certification that are viewable outside the areaCs borders. !ross8Border ,se %f an individual wishes to hold himself or herself out as a !+# professional or use the !+# marks outside his or her country or region of initial certification for anything other than incidental use, the !+# professional can pursue one of two optionsE :. !ross8Border !ertificationE An individual using the !+# marks in more than one country or region can become cross8border certified by obtaining !+# certification from the +#SB Affiliate in the new country or region and abiding by the certification renewal re2uirements of both +#SB Affiliates. once the !+# professional has completed the process, he or she can identify himself or herself as a !+# professional in those territories as well. =. $estricted ,se of the !+# MarksE %f an individual does not want to1cannot become certified in a new territory, he or she can always communicate the fact that he or she has obtained !+# certification in the country or region of initial certification.

5.

The kinds of services +inancial %nstitutions offer can vary widely. Some institutions assess every aspect of oneCs financial life, including saving, investments, insurance, ta7es, retirement, and estate planning and help one develop a detailed strategy or plan for meeting all financial goals. The major players in the market are as followsE I *'S Bank I !itibank I ,T% Bank )imited I -SB! Bank I -4+! Bank )imited I Bajaj !apital I $eligare 'nterprises )imited

52

82 YES BANK (2 In"!)d%1"()n

*'S BA(. has been conceived in the spirit of professional entrepreneurship, with an unstinted commitment to establish a high 2uality, technology driven, state8of8the8art private %ndian Bank catering to J'merging %ndiaC. The vast banking e7perience of the #romoters, $ana .apoor and Ashok .apur who have a collective financial stake of ;>.9=O has been strengthened by the financial support of $abobank (ederland to provide *'S BA(. a strong foundation of enduring financial trust. 53

*'S BA(. looks to offer comprehensive banking and financial solutions. Dhich is why, they have inducted top 2uality -uman !apital across all the banking functions, including !orporate P %nstitutional Banking, +inancial Markets, %nvestment Banking, Business P Transactional Banking and $etail Banking P Dealth Management.

((2 S !'(1 O** !(n;$

aG Mutual +unds *'S Bank tap into the latest market trends to give the clients the access to the best Mutual +unds. bG #ortfolio Management Services The bank helps you to manage your e7isting e2uity portfolios with the help of selected fund managers thus providing the clients with professional services and customi0ed options to meet their investment needs. cG N"% Bonds They provide you with fi7ed tenure Bonds, issued by the Novernment of %ndia, which ensure regular fund inflows. dG Ta7 Saving Bonds By investing in specified bonds, the bank can help you to reduce your ta7 liability under section @<'! of the %ncome Ta7 Act. eG Subscription to %#"s The bank facilitates subscription to select %#"s in the capital market, helping you to take timely advantage of available opportunities. fG )ife %nsurance *'S BA(. has partnered with Ma7 (ew *ork )ife, one of the most reputed )ife %nsurance companies in %ndia. The banking sector can play a constructive role in being an agent of change and a creator of social and economic value. At *'S BA(., they aspire to create and share value. Ma7 (ew *ork )ifeCs internationally benchmarked training processes3 fle7ible product suite, service e7cellence and financial strength complement this outlook, which ensure that we are able to deliver the true value of life insurance to our customers. 54

*'S BA(. provides the entire suite of life insurance products, ranging from risk protection to investment8related unit linked products, for individuals, groups or select employees. gG Neneral %nsurance *'S BA(. has partnered with Bajaj Allian0 Neneral %nsurance !o to distribute their (on )ife %nsurance products to our clients.

55

,2 CITIBANK (2 In"!)d%1"()n
!itigroup in %ndia !itigroup is the single largest foreign direct investor in the financial services industry in %ndia. !ommitted to %ndia for over :AA years, !itigroup considers itself a local bank with an international perspective backed by the largest global network. Dith a staff strength of over :@,AAA, !itigroup has consolidated its position as the most innovative and comprehensive financial products and services provider in the country, and today has a customer base of over :,AAA large corporate, over ==,AAA small and medium enterprises and over @.@ million retail customers. A pioneer in consumer banking, !itibank was the first to introduce credit cards, focused consumer lending programs and electronic banking in %ndia. Today, the !itibank network comprises of ;B bank branches across =? cities and over <AA !iti!ard Banking centersKwhich combine ATMs and self8service phone and %nternet bankingHoffering !itiNold wealth management, credit cards, mortgage services, 52

Auto )oans, #ersonal )oans, Suvidha and ($% Services. Through !iti+inancial, !itigroup offers consumer finance services in the country.

((2 S !'(1 O** !(n;$

!itiNold offers the clients a comprehensive range of products to meet their transaction, savings, investment, and insurance re2uirements. The clients can select from a set of term and endowment insurance policies brought to them through bank insurance partners so that the clients needs for wealth protection are taken care of. The clients can also select from a range of asset products, namely personal, home and auto loans at special relationship pricing. !itiNold Dealth Management offers the clients an e7clusive privilege that comprises ofE aG Mutual +unds At !itiNold you can choose from a range of pre8selected Mutual +unds managed by some of the biggest names in fund management such as Alliance !apital, +ranklin Templeton %ndia, Birla Sun)ife, Turich %ndia, 4S# Merril )ynch, -4+!, %4B% #rincipal and #rudential 8 %!%!%. The funds on offer are from a rigorously compiled list that ensures only the best reaches you. bG Ta7 Advisory Services !itiNold has tied up with the leading ta7 advisory firm 8 4eloitte, -askins P Sells to help the clients with their ta7 management. 4eloitte, -askins P Sells, a member firm of 4eloitte Touche Tohmatsu F4TTG, is amongst the leading global ta7ation8consulting firms. 4TT operates from :;A countries, has more than 9,AAA partners and over BA,AAA professionals around the globe. cG $eal 'state Advisory Services %n todayLs market, real estate presents an attractive real estate investment option. To assist the clients with advice on various real estate investments, or to help them in leasing, buying or selling properties, !itiNold has tied up with a world8class real estate consulting firm 8 !hesterton Meghraj #roperty !onsultants. This service is currently available in the cities of Mumbai, .olkata and 4elhi only. !itiNold will organi0e special seminars for the clients with these consultants and the clients can also consult them one8on8one on real estate investment options.

53

dG Art Advisory Services %n todayLs market, art presents an attractive investment option. To assist the clients with advice on various art investments, or to help them in buying or selling art, !itiNold has tied up with a reputed art gallery, Apparao Nalleries. eG %nsurance Services %n todayLs market, insurance presents an attractive investment option. To assist the clients with advice on various insurance policies, or to help them in purchasing insurance, !itiNold has tied up with Birla.

12 UTI BANK LTD (2 In"!)d%1"()n

,T% Bank was the first of the new private banks to have begun operations in :BB<, after the Novernment of %ndia allowed new private banks to be established. The Bank today is capitali0ed to the e7tent of $s. =>A.:= !rores with the public holding Fother than promotersG at ?=.<; O. #resently the Bank has a very wide network of more than <@A branch offices and '7tension !ounters. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve e7cellence.

54

((2 S !'(1 O** !(n;$ ,. C8&("8? M8!9 "

aG '2uity Market !ontent !apital Market is pioneer in offer e2uity related content for ,T% BankCs portal which includesE I '2uity Market !ommentary I Stock #rice 4ata I !harting +acility I +inancial 4ata I %#" 4ata I #ortfolio Tracker bG Mutual +unds !ontent %ndian Mutual +und industry has picked up, %t is fastest growing industry, with number of growing investor, today, there are ;9 Mutual +unds and over =AA schemes with total assets of appro7imately $s. >:,AAA crores. So it has become essential for you to keep updated information on your portal. !apital Market offers you range of content solution as followsE I Mutual +und (A& I +und #rofile Sheet I 4ividend P Mobili0ation 4etails I Mutual +und K (ews I Mutual +und K (+" I Mutual +und K Tools 55

cG !ommodity Market !ommodities Market is growing in %ndia and !apital Market offers following screens pertaining to !ommodity MarketE I !ommodity prices 'nd of the day for all the e7changesE o Nainers P )osers o Top Traded &alue o Advance 4ecline I Scrolling ticker for Spot P +uture prices P Net Quote button. I !ommodity news is also updated on daily basis

d2 HSBC B8n9 (2 In"!)d%1"()n

The antecedents of the -SB! Nroup in %ndia can be traced back to "ctober :>@; when the Mercantile Bank of %ndia, )ondon and !hina was founded in Bombay Fnow MumbaiG. The ac2uisition in :B@B by The -ong .ong and Shanghai Banking !orporation )imited of the Mercantile Bank was a decisive factor in laying the foundation for todayLs -SB! Nroup. -SB! in %ndia is proud to have retained the NroupLs pioneering streak by being an active partner in the development of the %ndian banking industry 8 even giving %ndia its first ATM way back in :B>?. The organi0ationCs adaptability, resilience and commitment to its customers have further enabled it to survive through turbulent times and prosper through good times over the past :@A years.

((2 S !'(1 O** !(n;$

aG +inancial #lanning Services %nflation, falling interest rates and fluctuating market conditions re2uire you to plan your finances carefully. !elebrate important occasions in the future by managing your wealth well now. -SB!Ls +inancial #lanning Services offer assistance to secure your future. "ur financial planning services are available for e7isting -SB! customers and are free of cost. 2-

bG Mutual +unds ,se the proven e7pertise and insights of the worldLs local bank for your investments. De offer you investment options in funds that meet our selection criteria and fit your re2uirements, helping you create and increase your wealth potential in the long8term scenario. cG %nsurance *ou have probably planned your life with great care, working slowly and steadily towards fulfilling your dreams and ambitions. ,nfortunately you have no control over certain natural and man8made events that may overturn your plans. As you change so do your insurance needs. The insurance solution that is relevant to you today may be very different to the solution you re2uire years from now. %t is therefore critical for you to identify protection needs that are pertinent to you and your circumstances.

2.

2 R ?(;8! (2 In"!)d%1"()n
$eligare 'nterprises )imited was promoted by the promoters of $anba7y )aboratories )imited and it was originally incorporated as &ajreshwari !osmetics #rivate )imited/ on Sanuary ;A, :B><. The name of the company was changed to $eligare 'nterprises #rivate )imited/ on Sanuary :A, =AA9. $eligare 'nterprises )imited F$')G, is one of the leading integrated financial services groups of %ndia. $')Cs businesses are broadly clubbed across three key verticals, the $etail, %nstitutional and Dealth spectrums, catering to a diverse and wide base of clients. $') offers a multitude of investment options and a diverse bou2uet of financial services and has a pan %ndia reach in more than :@@A locations across more than <9A cities and towns.

*2 B8:8: C8&("8? (2 In"!)d%1"()n

Bajaj !apital is one of %ndiaCs leading +inancial Services companies offering +ree Advice on %nvestments, %nsurance, Ta7 Saving, $etirement #lanning, +inancial #lanning, !hildrenCs +uture #lanning and other services. They are also S'B%8approved !ategory % Merchant Bankers. Today, Bajaj !apital is a one of the largest financial planning and investment advisory companies in %ndia, with a strong presence all over the country. They offer a comprehensive range of services including financial planning and investment advice, and the entire gamut of financial instruments and investment products of almost all major companies, both public and private. %n addition, they also provide investment assistance by helping clients complete all the formalities, and help them keep regular track of their investments. 22

((2 S !'(1 O** !(n;$

aG Mutual +unds bG Ta7ation Advise cG Bonds dG #ost "ffice Schemes eG 'state #lanning fG %nsurance gG +inancial #lanning hG $etirement #lanning B8:8: C8&("8?A$ 4F0G F(n8n1(8? P?8nn(n; +inancial #lanning is becoming increasingly popular in developed countries all over the world. (ow, with a little help from Bajaj !apital, clients too can give themselves the ;9AU +inancial #lanning edgeV (ow, Bajaj !apital brings you the same service ABS"),T')* +$''V Bajaj !apitalLs ;9AU +inancial #lanning #rogramme could make a difference to all those who wish to lead a worry8free, financially secure life. ;9AU +inancial #lanning is based on the premise that every individual has certain basic financial needs that are e7pressed at various stages of life Fgetting married, buying assets like homes, vehicles, or providing for your childrenLs education and weddingG. %nstead of investing in an ad8hoc manner, ;9AU +inancial #lanning helps you take a holistic, all8round view. Briefly, ;9AU +inancial #lanning comprisesE I %nvestment #lanningE To make your wealth grow I !ash +low #lanningE To provide for assets and meet the periodic cash re2uirements Ta7 #lanningE To save on ta7es and increase your income 23

I %nsurance #lanningE To protect yourself, your family and your assets I !hildrenLs +uture #lanningE To give your children a financially secure future I $etirement #lanningE Because retirement is a time to rela7, not to get worried

;2 A?? ;!) C8&("8? Ad'($)!$ P!('8" L(-(" d 0(2 In"!)d%1"()n

Allegro Advisors is a leading %ndian full service investment bank that builds value across a spectrum of clients, including the government, corporations, financial institutions, high net8 worth individuals and professionals. I !omprehensive service offering I %nvestment Banking, !apital Markets, Asset Management P #rivate Banking I 'nsuring clientLs financial well8being

24

I Team of e7perienced advisors Allegro !apital is a comprehensive %nvestment Bank that comes with years of e7pertise in offering financial solutions and advisory services across the corporate world. Allegro !apital Advisors has offices located in key metros across %ndia. "ur teams of financial advisors and specialists have the local knowledge, contacts and awareness to create optimum solutions that meet our clientLs financial ambitions. Niving our clients the global local advantage, we have broadened our reach to =@ major cities and towns of %ndia and established strategic alliances with several renowned advisory houses and institutions, internationally.

25

0(((2 S !'(1 O** !(n;$

The investment approach begins by working closely with the clients to identify their long8 term financial goals, risk tolerance and the nature of their e7isting asset base. Additionally, allegro review each clientCs portfolio on an ongoing basis and evaluate possible adjustments in response to economic changes, market trends or client needs. Allegro ensures this highly personali0ed model of service by maintaining amongst the lowest client to advisor ratios in industry. Allegro offers one of the widest range of financial services that covers the spectrum of every need a client may have in managing his or her wealth. "ur services are categori0ed to serve diverse financial needs and the diverse investment strategies that are re2uired to grow a clientCs wealth. Allegro NrowthWE 4esigned for the young e7ecutive, it comprises a set of products and services that allow start up incomes ma7imi0e potential to grow in the long term. A special offering has been designed for working couples Allegro '2uityWE A pure e2uity offering with a uni2ue strategy that keeps in perspective capital conservation through medium and long strategies such as dividend yields, %#"s, buy8backs, value picks, sectoral picks, growth fund opportunities etc. #MS is offered selectively Allegro DealthW8 A top of the line service offering that comprises the entire basket of services that include speciali0ed e2uity advisory including personal advise from our highly reputed advisory panel across ta7ation, debt, e2uity and money markets, automatic portfolio and rebalancing management, insurance and loan advisory, access to a > hr 9 days a week helpline. #ortfolio Management Services is offered selectively.

22

0#2 IDBI B8n9 0O"# ! P%,?(1 S 1")!3Ind(8n B8n9$2 +

Ind%$"!(8? D ' ?)&- n" B8n9 )* Ind(8 0IDBI2 ($ "# " n;"# ?8!; $" ,8n9 (n "# >)!?d (n " !-$ )* d ' ?)&- n"E T# N8"()n8? S")19 E71#8n; 0NSE2= T# N8"()n8? S 1%!("( $ D &)$(")!. S !'(1 $ L"dE 0NSDL2= S")19 H)?d(n; C)!&)!8"()n )* Ind(8 0SHCIL2 8! $)- )* "# (n$"("%"()n$ >#(1# #8$ , Ind(8n F(n8n1(8? M8!9 "$E IDBI B8n9= &!)-)" d ,. IDBI 6!)%& $"8!" d (n N)' -, ! 1HHI >("# 8 ,!8n1# 8" Ind)! >("# 8n C%(". 18&("8? ,8$ )* R$E 1000 -(??()nE n ,%(?" ,. IDBIE IDBI ($ 8 $"!8" ;(1 (n' $")! (n 8 &? "#)!8 )* (n$"("%"()n$ >#(1# #8' ! ')?%"()n(B d "#

23

M8(n *%n1"()n$ )* IDBI IDBI ($ ' $" d >("# "# ! $&)n$(,(?(". )* 1)3)!d(n8"(n; "# >)!9(n; )* (n$"("%"()n$ n;8; d (n *(n8n1(n;= &!)-)"(n; 8nd d ' ?)&(n; (nd%$"!( $E I" #8$ ')?' d 8n 8&&!)&!(8" - 1#8n($- *)! "#($ &%!&)$ E IDBI 8?$) %nd !"89 $@$%&&)!"$ >(d 3 !8n;(n; &!)-)"()n8? 81"('("( $ (n1?%d(n; n"! &! n %!$#(& d ' ?)&- n" &!);!8-- $ *)! n > n"! &! n %!$= &!)'($()n )* 1)n$%?"8n1. $ !'(1 $ *)! $-8?? 8nd - d(%- n" !&!($ $= %&;!8d8"()n )* " 1#n)?);. 8nd &!);!8-- $ *)! 1)n)-(1 %&?(*"- n" )* "# %nd !&!('(? ; dE

24

IDBIJ$ !)? 8$ 8 18"8?.$" IDBIJ$ !)? 8$ 8 18"8?.$" ") (nd%$"!(8? d ' ?)&- n" n1)-&8$$ $ 8 >(d $& 1"!%)* 81"('("( $E IDBI 18n *(n8n1 8?? ".& $ )* (nd%$"!(8? 1)n1 !n$ 1)' ! d %nd ! "# &!)'($()n$ )* "# IDBI A1"E 5("# )' ! "#! &)!"*)?()E D ' ?)&- n"8? A1"('("( $ )* IDBI P!)-)"()n8? 81"('("( $ In *%?*(?- n" )* ("$ d ' ?)&- n"8? !)? = "# B8n9 1)n"(n% $ ") & !*)!- 8 >(d !8n; )* &!)-)"()n8? 81"('("( $ ! ?8"(n; ") d ' ?)&- n"8? &!);!8-- $ *)! n > n"! &! n %!$= 1)n$%?"8n1. $ !'(1 $ *)! $-8?? 8nd - d(%- n" !&!($ $ 8nd &!);!8-- $ d $(;n d *)! 811! d(" d ')?%n"8!. 8; n1( $ *)! "# %&?(*"- n" )* "# %nd !&!('(? ; dE T# $ (n1?%d $ ?*3 -&?).- n" 8nd >8; 1)n)-(1 n"! &! n %!$#(& d ' ?)&- n"= d 18d $ )* $ !'(1 ") "# Ind(8n (nd%$"!.= IDBI #8$ ;!)>n $%,$"8n"(8??. (n " !-$ )* $(B )* )& !8"()n$ 8nd

-&?).- n" (n "# (nd%$"!(8? $ 1")! *)! "# > 89 !

$ 1"()n$ )* $)1( ". "#!)%;# ')?%n"8!. 8; n1( $= $%&&)!" ") S1( n1 8nd T 1#n)?);. En"! &! n %!$J P8!9$= En !;. C)n$ !'8"()n= C)--)n K%8?(". T $"(n; C n"! $ *)! $-8?? (nd%$"!( $E T 1#n(18? C)n$%?"8n1. O!;8n($8"()n$ 5("# 8 '( > ") -89(n; 8'8(?8,? 8" 8 ! 8$)n8,? 1)$"= 1)n$%?"8n1. 8nd 8d'($)!. $ !'(1 $ ") n"! &! n %!$= &8!"(1%?8!?. ") n > 8nd $-8?? n"! &! n %!$= IDBI= (n 1)??8,)!8"()n >("# )"# ! A??3Ind(8 F(n8n1(8? In$"("%"()n$= #8$ $ " %& 8 n ">)!9 )* T 1#n(18? C)n$%?"8n1. O!;8n($8"()n$ 0TCO$2 1)' !(n; "# n"(! 1)%n"!.E TCO$ )** ! d(' !$(*( d $ !'(1 $ ") $-8?? 8nd - d(%- n" !&!($ $ (n "# $ ? 1"()n=

25

*)!-%?8"()n 8nd 8&&!8($8? )* &!): 1"$= "# (! (-&? - n"8"()n 8nd ! '( >E

En"! &! n %!$#(& D ' ?)&- n" In$"("%" R 8?($(n; "#8" n"! &! n %!$#(& d ' ?)&- n" ($ "# 9 . ") (nd%$"!(8? d ' ?)&- n"= IDBI &?8. d 8 &!(- !)? (n $ ""(n; %& )* "# En"! &! n %!$#(& D ' ?)&- n" In$"("%" )* Ind(8 *)! *)$" !(n; n"! &! n %!$#(& (n "# 1)%n"!.E I" #8$ 8?$) $"8,?($# d $(-(?8! (n$"("%" $ (n B(#8!= O!($$8= M8d#.8 P!8d $# 8nd U""8! P!8d $#E IDBI 8?$) 7" nd$ *(n8n1(8? $%&&)!" ") '8!()%$ )!;8n($8"()n$ (n 1)nd%1"(n; $"%d( $ )! $%!' .$ )* ! ? '8n1 ") (nd%$"!(8? d ' ?)&- n"E

3-

CHAPTER 4
3.

COMPARATIVE STUDY OF DIFFERENT PLAYERS IN THE MARKET

T8,? + C)-&8!($)n 8-)n; '8!()%$ *(n8n1(8? 8d'($)!$

P8!8- " !$ +ees %#" Advisory Ta7ation Advisory 4ebt #ost "ffice Schemes Bonds $eal 'state Advisory A?? ;!) X X X X X 5 UTI B8n9 5 X X 5 X 5 C("(,8 HDFC R ?(;8! n9 5 5 5 5 X 5 X X 5 5 X #art of real estate ,nbiased Advisory X 5 5 32 fund 5 5 5 5 5 X 5 5 X 5 YES B8n9 5 X 5 5 X 5 B8:8: C8&("8? 5 X X X X X

Administration Services Brokerage -ouse Target Salaried Audience Business men +inancial #lanning $etirement #lanning !ommodity Trading %nsurance

X 5 X 5 X X 5 Based on (eed Analysis

5 X X X X X 5 )%!

5 5 X X X X 5 Birla

X X X X X X 5 X

X X X X 5 5 X X

X 5 X X 5 5 5 Ma7 (ew *ork )ife 5 X

X X X X X X 5 Bajaj

$estructuring of )iabilities Deb #ortal

X 5

5 X

5 X

5 X

5 X

5 X

33

The investment approach begins by working closely with the clients to identify their long8 term financial goals, risk tolerance and the nature of their e7isting asset base. Additionally, allegro review each clientCs portfolio on an ongoing basis and evaluate possible adjustments in response to economic changes, market trends or client needs. Allegro ensures this highly personali0ed model of service by maintaining amongst the lowest client to advisor ratios in industry. Allegro offers one of the widest range of financial services that covers the spectrum of every need a client may have in managing his or her wealth. "ur services are categori0ed to serve diverse financial needs and the diverse investment strategies that are re2uired to grow a clientCs wealth.

34

The investment approach begins by working closely with the clients to identify their long8 term financial goals, risk tolerance and the nature of their e7isting asset base. Additionally, allegro review each clientCs portfolio on an ongoing basis and evaluate possible adjustments in response to economic changes, market trends or client needs. Allegro ensures this highly personali0ed model of service by maintaining amongst the lowest client to advisor ratios in industry. Allegro offers one of the widest range of financial services that covers the spectrum of every need a client may have in managing his or her wealth. "ur services are categori0ed to serve diverse financial needs and the diverse investment strategies that are re2uired to grow a clientCs wealth. 35

CHAPTER I ANALYSIS OF THE COMPARISON

32

%t can be observed from the above Table that most of the financial advisors are not charging any fees for their advisory services i.e. they are giving it free of cost because the banks F!itibank, ,T% Bank, -SB!G earn commission if the customer purchases mutual funds, insurance, from it. The broking company earns brokerage if the client purchases $B% bonds etc or if he does any e2uity trading. The bank only charges marginal fees on the custodial services.

33

-owever, -4+! Bank 8 instead of asking customers to bring in a specific amount of funds 8 charges customers on various types of services it offers. The management of wealth depends on the customerLs risk appetite, his investment objectives. "nce these are understood, the bank sends a written investment proposal on what the bank thinks the portfolio should be.

34

-owever, -4+! Bank do charge clients from $s.;@,AAA a year for tracking portfolio up to $s.;@ lakh and $s.:,AA,AAA for tracking portfolio up to $s.: crore. These services include e2uity8related services along with dedicated advisors. The bank also offers services between $s.:A,AAA and $s.=@,AAA per annum for non8interactive products. The bank, however, waives these fees if it earns money through transactions routed through the bank.

35

Ta7ation advisory is given by very few players like Allegro, Bajaj !apital, ,T% Bank. &arious banks have a tie8up model with different insurance and mutual fund companies like !itibank has with Birla so !itibank will only sell Birla insurance to their clients irrespective of the fact whether the product meets the clientCs financial goals. Allegro is one player which takes care of loan restructuring. !ommodity trading is only being handled by $eligare as a separate product as S'B% have not yet allowed commodity trading to be a part of wealth advisory services.

4-

-owever banks offer portfolio management services to customers. This means that a customer cannot give money to a private banker and ask the $M to invest on his behalf in different financial products. This service can be offered only by entities other than a bank such as $eligare, Allegro Advisors, Bajaj !apital, etc. A banker therefore will have to call every time and get a written confirmation from the client before any deal is done.

4.

CHAPTER F RESEARCH METHODOLO6Y

42

82 T("? )* "# S"%d.

!omparative analysis of various financial institutions in the market.

,2 O,: 1"(' )* S"%d.

To study the prospects of various financial products provided by different financial institutions in the market. #eople should come out of the concept of just keeping their money in Savings Account and +i7ed 4eposits and should concentrate on their financial planning to ma7imi0e returns by taking proper guidance from financial planner.

12 T.& )* R $ 8!1#
This project is more of an e7ploratory research with more of 2ualitative analysis than 2uantitative. The data collection method for this project begins with finding a sample of the population. The population for this project was the various places in Saipur. FSohari Ba0ar, M % $oad, Tonk $oad, Malviya (agar and Shotwara %ndustrial AreaG and at the -4+!slic,cscheme,jaipur. The research methodology adopted was both #rimary and Secondary. #rimary data was collected to study the investment psyche of a person, their practice on saving, investment options available and the need of financial institutions to manage individualCs wealth. Questionnaire was designed to ascertain the investorCs behavior as well as to depict the future prospects and growth momentum of the wealth management industry.

d2 S8-&? S(B 8nd - "#)d )* $ ? 1"(n; $8-&? D8"8 C)?? 1"()n M "#)d$ D In$"!%- n"$
The instrument for data collection was a structured 2uestionnaire targeted towards people who do investments. This 2uestionnaire was designed to know the investment psyche of a person while investing in the financial products. The mode of communication was informal P friendly conversation, which does not limit discussion within a well8defined boundary.

43

D8"8 C)?? 1"()n S)%!1 $ (2 P!(-8!. R $ 8!1#

$esearch was done to get a detail overview of the wealth management industry and study the need for financial planner in the current scenario. Questionnaire was designed to study the investment psyche of a person, their practice on saving, different investment options available and the need of financial institutions to manage individualCs wealth. This project is mainly based on first hand observation in the market, the way financial planning functions, scope of financial planning and the need of a certified financial planner.

((2 K% $"()nn8(! D $(;n

A structured 2uestionnaire was designed covering both open and close ended 2uestions, to study the perception of people regarding investment avenues and the concept of financial planner. YSpecimen of the 2uestionnaire is attached in A(('5,$' AZ.

(((2 S 1)nd8!. R $ 8!1#

&arious sources of information were collected for attaining clarity on the prospects of wealth management industry and the various financial institutions in the market. The source also includes basic investment objectives and the various types of investment avenues open to an individual. -owever the following sources were considered for information gatheringE I !ompanies websites I Articles and reports available on the web I (ews papers like 'conomics Times and %nvestment %nsurance Maga0ines I &arious other sources mentioned in the references, in A(('5,$' B

('2 P)&%?8"()n 1)n$(d ! d *)! ! $ 8!1#

Sample 4etails :AA people belonging to different fields, who do investment, were asked to fill the 2uestionnaire, on the basis of which an attempt is made to study the prospects of +inancial 44

#lanning in the market. The sample unit consists of those people who are trading in secondary markets, mutual funds, initial public offer, insurance, debt instruments as they can give the accurate information about financial planning. A sampling frame has been developed so that everyone in the target population has an e2ual chance of being sampled. #ersonal %nformationE I Se7 $atioE +rom the total :AA respondents :@ were females and >@ were males.

#ersons Male +emale

$atio >@ :@

S 7 R8"() )* S8-&? $

Males +emales

2 S1)& )* S"%d.
45

There e7ist a potential growth in the wealth management industry and thus this project authenticates the feasibility of financial institutions in the market. '7panding needs and proliferation of financial products are making it difficult for individuals to invest without planning. Most are aware that planning is critical3 yet donCt have the time or the e7pertise to develop a plan P therefore the role of +inancial #lanner comes in picture.

*2 L(-("8"()n )* "# S"%d.

The scope of the research was limited to top ? wealth management companies, namely *'S Bank, !itibank, ,T% Bank, -SB! Bank, -4+! Bank, Bajaj !apital and $eligare 'nterprises )imited. The sample area was primarily in Saipur. FSohari Ba0ar, M % $oad, Tonk $oad, Malviya (agar and Shotwara %ndustrial AreaG and at the -4+!S)%!,!8scheme ,opposite jaiclub,Saipur and accordingly the response is presumed to represent whole of %ndia. The sample si0e comprised of :AA respondents from different fields and income group, and their responses are presumed to represent the wealth management mark

The score allotted by the different respondents on different parameter might not be with the same yardstick, as individuals are subjective in nature as well as the environment round them differs, which play a critical role in building up a perception.

42

CHAPTER 7 FACTS AND FINDIN6S

43

%t can be observed that most of the financial advisors are not charging any fees for their advisory services i.e. they are giving it free of cost because the banks F!itibank, ,T% Bank, -SB!G earn commission if the customer purchases mutual funds, insurance, from it. The broking company earns brokerage if the client purchases $B% bonds etc or if he does any e2uity trading. The bank only charges marginal fees on the custodial services. -owever, -4+! Bank 8 instead of asking customers to bring in a specific amount of funds 8 charges customers on various types of services it offers. The management of wealth depends on the customerLs risk appetite, his investment objectives. "nce these are understood, the bank sends a written investment proposal on what the bank thinks the portfolio should be. Ta7ation advisory is given by very few players like Bajaj !apital, ,T% Bank. &arious banks have a tie8up model with different insurance and mutual fund companies like !itibank has with Birla so !itibank will only sell Birla insurance to their clients irrespective of the fact whether the product meets the clientCs financial goals. Allegro is one player which takes care of loan restructuring. !ommodity trading is only being handled by $eligare as a separate product as S'B% have not yet allowed commodity trading to be a part of wealth advisory services. -owever banks cannot offer portfolio management services to customers. This means that a customer cannot give money to a private banker and ask the $M to invest on his behalf in different financial products. This service can be offered only by entities other than a bank such as $eligare, Bajaj !apital, etc. A banker therefore will have to call every time and get a written confirmation from the client before any deal is done.

44

CHAPTER L ANALYSIS AND INTERPRETATION

45

Niven below are the graphical representations of the responses received on 2uestions asked through the 2uestionnaire. The interpretation derived and the model adopted will be e7plained in detail in the later part of the report. "n asking the following 2uestions, the replies were received accordinglyE

LE1E 5#8" ($ .)%! ),: 1"(' , #(nd (n' $"- n"$M

%nvesting is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The 2uestionnaire asked the respondents to reveal their objective behind investments, majority of the respondents disclosed growth of capital as their prime objective while safety of capital stands secondary. This response reflects the investor willingness to take calculated risks for growth of their capital "bjective Behind %nvestment (o of $espondents Fin OG

Nrowth of !apital Ta7 Minimi0ation Safety of !apital $etirement )i2uidity Beating %nflation "thers

<9.=> :<.A@ :@.? :<.>> =.<> ;.;: ;.;:

5-

The research has highlighted that growth of capital is the most important factor which they consider wile investing as evident by the response wherein <9.;O of the respondents voted for the same. -owever, it can also be seen that :@.?O of the investors prefer safety of their capital as their secondary objective which depicts that investors give greater emphasis to the returns and willing to adjust with safety of capital. )i2uidity is the least important factor as only =.@O of the respondents voted for it which signifies that the financial planner should designed the portfolio giving more importance to growth and safety of capital as per individual financial goals while li2uidity should have the minimum focus. %n our sample, inflation has only been given ;.;O of the total sample which reflects that people are still not giving much consideration to inflation even due to a sharp rise in the inflation rate.

5.

LE2E S(n1 ># n 8! .)% (n' $"(n; (n *(n8n1(8? (n$"!%- n"$M

The respondents were asked as from when they have started investing in financial instrument so as to ascertain the average period of e7perience of an investor in the market. The responses were then graphically which indicates that majority of the investors i.e. <>.=O of the respondents have been investing for more than := months and signifies that the responses revealed are from e7perienced and 2ualified investors which adds to the credibility and reliability of the research. Months )ess than ; months ; to 9 month 9 to > months > to := months More than := months (o of $espondents Fin OG :A.>< :;.=@ B.9< :>.A? <>.:B

9A @A <A ;A =A :A A )ess than ; months ; to 9 month 9 to > months M)n"#$ > to := months More than := months Series:

LE4E D) .)% &?8n .)%! (n' $"- n"$M

To evaluate the level of importance the investor gives on detailed financial planning to arise in their investment decision, the respondents were asked to reveal whether their 52

N) )* R $&)nd n"$ 0(n N2

investments are result of a careful planning or itCs a mere word of mouth. As many individuals follow word of mouth leaving behind the fact that every individual has different financial goals, they tend up in making wrong decisions for their investments. Most are aware that planning is critical, yet donCt have the time or the e7pertise to develop a plan and make the needed financial decisions. "n analy0ing the response ><O of the persons plan their investments while only :9O take investment decisions on ad hoc basis. "pinion of $espondents *es (o (o of $espondents Fin OG >< :9

R $&)n$ )n P?8n "# (! In' $"- n"

*es (o

LE4E 5#8" ($ .)%! &!81"(1 )n $8'(n; -)n .M

53

To determine the saving habits of the investors, the 2uestionnaire en2uired the respondents as about their practice of savings. The greater the inclination of saving the more will be the funds available for investment. Around <?.@O of the respondents try to save from their income, while only =B.?O of the respondents always make an effort to save some part of their income. "pinion of $espondents 4onCt believe in Savings -igh '7penses Try to Save Always Save Some "thers (o of $espondents Fin OG :.B> :B.> <?.@= =B.? .BB

R $&)n$ )n &!81"(1 )* $8'(n; -)n .

@A <A N) )* R $&)nd n"$ 0(nN2 ;A =A :A A 4onCt believe in -igh '7penses Savings Try to Save Always Save Some "thers Series:

O&(n()n )* R $&)nd n"$

"nly =O of the respondents donCt believe in savings, which substantiate high importance of savings in %ndian households. -owever, it was also observed that majority of the women respondents had high inclination for savings and try to save the ma7imum out of their available income.

LEIE H)> -%1# "#)%;#" #8' .)% ;(' n ") $8'(n; *)! ! "(! - n"M
Anyone who will retire needs to plan for it. There is more than one reason to save for retirement. The all important reason is the rising cost of living. %ts called inflation, which

54

simply put, means that purchasing power of money falls over time, so you buy less for the same amount of money or you have to pay more for the same 2uantity of goods. "n analy0ing the level of importance the respondents give on saving for retirement, majority i.e. <?O of the respondents give some importance while only :>O give a lot of importance to saving for retirement. This depicts non serious attitude of %ndians while planning for their retirement. O&(n()n )* R $&)nd n"$ Some A )ot &ery )ittle (one N) )* R $&)nd n"$ 0(n N2 <? :> :> :?

R $&)n$ )n S8'(n;$ *)! R "(! - n"

Some A )ot &ery )ittle (one

LEFE 5# n d) .)% 1)n$(d ! )n $#)%?d $"8!" &?8nn(n; *)! ! "(! - n"M

%f you start planning for retirement early on, you can bridge the gap between what you have in your hand today and what you would like to have when you retire. Dhat to keep in mind 55

while saving for retirement depends a lot on our age and how much money you are willing to set aside every month. %f you begin saving for retirement early on in your life, you can set aside smaller amounts. #lanning for retirement in early age of employment is depicted on analy0ing the responses as ;@.>O start planning below the age of ;A years, while <=.:O of the respondents feel, the ideal age to be above <A years.

O&(n()n )* R $&)nd n"$ Below ;A ;: K <A <: K @A Above @A

N) )* R $&)nd n"$ 0(n N2 ;@.?B ==.:: ==.:: =A

R $&)n$ )n 8; &! * ! n1 ") &?8n *)! ! "(! - n"

Below ;A ;:8 <A <: 8 @A

LE7E 5#8" d) .)% * (n' $"- n"M

? ($ 1)n$(d ! d ") , "# O*%nd8- n"8??. $8* A *)!- )*

"n en2uiring from the respondent about what are the fundamental secure forms of investments, ;@.<O of the respondents feel that investing in property is the safest form of investment followed by %nsurance. The least secured form of investment as revealed by respondents is investment in e2uity as secondary market is subject to huge volatility P uncertainty. 52

%t can be seen from the response that people are more willing to put their money in property or real estate in spite of the economy e7periencing a major climb in the property prices. About :<.<O of the respondents feel that Bank deposits is also the safe form of investments as it gives assured returns on the sum invested. "pinion of $espondents Bank 4eposit #roperty #ostal 4eposit Nold %nsurance Bonds Mutual +und '2uity (o of $espondents Fin OG :<.;? ;@.;; ?.?> ;.@B :@.@? :=.@? ?.:B =.BB

R $&)n$ )n *%nd8- n"?. $8* *)!- )* (n' $"- n"

<A ;@ ;A =@ =A :@ :A @ A Bank 4eposit #roperty #ostal 4eposit Nold %nsurance Bonds Mutual +und '2uity

N) )* R $&)nd n"$ 0(nN2

Series:

O&(n()n )* R $&)nd n"$

LELE H)> d) .)% "89 *(n8n1(8? d 1($()n$M

An individualCs decision has a vital role to play in achieving investment objectives and thereby making investments in a systematic manner. 4ecisions can make or break investment avenues as wrong decisions would merely lead to wrong investments resulting in major loss. "n en2uiring from the respondents about how they take their financial decisions, majority of the respondents take their financial decisions independently which depicts they are not taking any advisory services from financial e7perts. There are majority of respondents who feel that they can handle their portfolio on their own and hence make their own decisions regarding investments. 53

"pinion of $espondents %ndependently +riends Broker !A Bank +inancial Advisor "thers

(o of $espondents Fin OG <> => : ? : :: <

R $&)n$ ! ;8!d(n; "89(n; *(n8n1(8? d 1($()n$

9A @A N) )* R $&)nd n"$ 0(nN2 <A ;A =A :A A
!A Br ok er Ba nk ds en de ntl y +ri en Ad vis or "t he rs

Series:

%nd ep

O&(n()n )* R $&)nd n"$

LEHE D) .)% #8' 8n. In$%!8n1 P)?(1.M

)ife is full of dangers, but with insurance, you can at least ensure that you and your dependents donCt suffer. The purpose of buying insurance is to protect your dependants from any financial difficulties in your absence. %t helps individuals in providing them with the twin benefits of insuring themselves while at the same time acting as a compulsory savings instrument to take care of their future needs. The research has highlighted that majority of the respondents are availing insurance policy which signifies that people are much aware about the advantages with an insurance policy which can cover their life as well as prove to be as a savings instrument. "pinion of $espondents (o of $espondents Fin OG 54

+in an cia l

*es (o

?@ =@

R $&)n$ ") #8'(n; 8n (n$%!8n1 &)?(1.

*es (o

Around ?@O of the respondents do have insurance policy, while =@O of the respondents are still not availing this type of investment.

LE10E I* . $= >#. d(d .)% ,%. 8n In$%!8n1 P)?(1.M

"n en2uiring from the respondents about why they bought insurance policy, majority of the respondents bought insurance as a security against death which depicts people have ensured that their dependents donCt suffer incase of any uncertainty as life insurance indemnifies the nominees in case of an eventuality to the insured. By having insurance policy, the financial future of the nominees is secured in the absence of the person insured. "f the respondents who possessed insurance, ;<O of the respondents had purchased insurance mainly as a security against death while ;:O had bought it primarily as a savings product. "ver ?O of the respondents purchased insurance as a word8of8mouth due to high demand of the product and it was also observed that around =>O of the respondents bought insurance to save ta7. "pinion of $espondents +or Saving Ta7 (o of $espondents Fin OG => 55

+or Savings +or Security Against 4eath "thers

;: ;< ?

R $&)n$ *)! ,%.(n; 8n (n$%!8n1 &)?(1.

<A ;A N) )* R $&)nd n"$ 0(nN2 =A :A A +or Saving Ta7 +or Savings +or Security Against 4eath "thers Series:

O&(n()n )* R $&)nd n"$

LE11E A! .)% 8>8! 8,)%" "# 1)n1 &" )* F(n8n1(8? Ad'($)!$M

There are a number of financial advisors offering a diverse portfolio of services to suit different financial re2uirements of the individuals. %n order to accomplish the task, these companies provide the assistance of professional financial advisors. The advisors educate individuals on the merits of a long8term approach and regular investing and help to rebalance their portfolio. "n analy0ing the response ?>O of the respondents were aware about financial advisors while around ==O of the respondents were still not aware about professional financial advisors which depicts there lays a scope to penetrate these people and inform them regarding the services offered by various financial institutions.

.--

"pinion of $espondents *es (o

(o of $espondents Fin OG ?> ==

R $&)n$ )n 8>8! n $$ )* *(n8n1(8? 8d'($)!$

*es (o

LE12E D) .)% 1%!! n"?. 8'8(? *(n8n1(8? 8d'($)! $ !'(1 $@&!('8" $ !'(1 $M

,8n9(n;

Majority of the respondents are currently not availing financial advisor services, which reveal the concept of financial advisors is not that much developed in the %ndian market. %ndividuals are earning and paying high ta7es thus ignoring the ta7ation benefits, which they can avail by proper computation of ta7es. %ndividuals usually rely on !hartered Accountants leaving behind the fact that they are e7perts in Accounting and not in wealth management so there is a need for +inancial Advisors. -ence, there is a re2uirement for one stop shop for all the financial needs of an individual. According to the response, it can be seen that 99O of the respondents are not availing any financial advisory services while only ;<O are taking financial advisory services. Thus thereCs much scope left for the financial management companies to target these large number of people who are totally unaware about the whole concept.

"pinion of $espondents *es

(o of $espondents Fin OG ;< .-.

(o

99

R $&)n$ ") 8'8(?(n; *(n8n1(8? 8d'($)!. $ !'(1 $

*es (o

LE14E I* . $= *!)- >#)-M

To find out the various companies from where the investors get financial advisory services P make their decisions regarding investments. This would reveal the preference the respondents have for different companies. "n analy0ing the response, ?;.;;O of the respondents were primarily availing financial advisors services from !itibank and when they were asked the reason behind, they replied !itibank provides free advisory services and has got a strong brand name. Secondly ;9O of the respondents were taking financial advisory services from -4+! Bank followed by others which include ,T% Bank, SB%, %!%!% Bank, etc which catered around ;;.;O of the total sample. "pinion of $espondents !iti Bank -4+! Bank Allegro Advisors Bajaj !apital -SB! Bank *es Bank $eligare "thers (o of $espondents Fin OG ?;.;; ;9.9? =A :;.;; :9.9? :A ;.;; ;;.;; .-2

R $&)n$
>A N) )* ! $&)nd n"$ 0(nN2 ?A 9A @A <A ;A =A :A A !iti Bank -4+! Bank

! ;8!d(n; $)%!1

)* *(n8n1(8? 8d'($)!.

Series:

Allegro Advisors

Bajaj !apital

-SB! Bank

*es Bank

$eligare

"thers

O&(n()n )* ! $&)nd n"$

LE14E 5#8" 8! "# &!)d%1"$ .)% 8! ; ""(n; *!)- .)%! $ !'(1 &!)'(d !M
According to our response, around ==O of the respondents are availing advices on insurance products followed by mutual funds which hold :<.9O of the total sample. This depicts there is a huge demand for insurance in the %ndian economy as compared to other financial instruments. %t can also be inferred that individuals have started taking advises regarding ta7 planning and loans restructuring. "pinion of $espondents Mutual +und %#" '2uity #ost "ffice Schemes %nsurance #roperty Ta7 #lanning )oan Administration Nold Art (o of $espondents Fin OG :<.9; >.:; >.:; ::.;> =:.B@ ?.;= ::.;> B.?9 <.A? =.<< A.>:

.-3

insurance products followed by mutual funds which hold :<.9O of the total sample. This depicts there is a huge demand for insurance in the %ndian economy as compared to other financial instruments. %t can also be inferred that individuals have started taking advises regarding ta7 planning and loans restructuring.

.-4

LE1I &?8n )* (n' $"- n"$M

To evaluate the level of importance the investor gives on detailed financial planning to arise in their investment decision, the respondents were asked to reveal whether their investments are result of a careful planning or itCs a mere word of mouth. As many individuals follow word of mouth leaving behind the fact that every individual has different financial goals, they tend up in making wrong decisions for their investments.

.-5

LE1F5#(1# ".& )* *81")!(n; .)% &! * !M

FaG $ecourse FbG (on8$ecourse

An8?.$($ 8nd In" !&! "8"()n+3 :.=A customers prefer recourse factoring. =. $emaining :A customers prefer non recourse factoring.

.-2

CHAPTER H CONCLUSION

.-3

This part of research paper determines the prospects of financial advisors in the market with relevance to the information derived from analysis of the responses. +easibility of financial institutions can be studied by both financial feasibility and marketing feasibility.

82 F(n8n1(8? F 8$(,(?(".
+inancial feasibility will study the need of financial advisors due to changes in the inflation rate, loans, insurance charges, etc which investors usually ignored so by availing the financial advisory services, one can e7pect unbiased advise on the entire spectrum of personal finance and thereby adding value to the investorCs current portfolio and potential savings. The statistics regarding the investments are discussed below so as to show the trend of various factors in the %ndian economy.

(2 6!)>(n; E1)n)-.
The anticipated growth rate of 9 8 ? percent in =AA>8AB, acknowledges the momentum of development in the %ndian economy. The odds are loaded heavily in favor of a continuation of the growth momentum and a virtuous cycle of growth and savings, that appears to be already underway, is likely to accelerate that pace. %ndia is the worldCs second most populous country with a little over : billion people and the :Ath in terms of economic si0e, representing around 9O of world N4#. The impact of :@ years of economic reform finally appears to have kicked in and allowed %ndia to emerge as an attractive investment destination in the global arena %ndia, with an anticipated growth rate of 9 to ? O for the year =AA>8AB, supported by robust growth in the %ndian industries and service sector would build a strong business scenario which would increase the economic activity in the country, evident from increased employment opportunities and entrepreneurship projects. As wealth management provide investors with commentary, research, and practical ideas that bridge the gap between theory and practice in contemporary global business, it would result in increase in the demand for financial advisors in the country, thereby authenticating the prospects of financial advisors in the %ndian market .-4

((2 S"!)n; F(n8n1(8? M8!9 "

%ndiaLs financial markets have undergone rapid changes since the country eBBArked on a program of economic reforms in :BB:. They have embraced technology, seen a substantial increase in the variety and volume of transactions, and witnessed the emergence of new securities and new instruments. %ndia witnesses growing number of venture capitalist bank which do not hesitate in investing in new projects and bear high risk with the entrepreneur. Therefore, the financial market scenario in %ndia is conducive for procurement of funds for launching the business maga0ine in the market.

(((2 In*?8"()n
%nflation is moving at around <O and the savings account is giving an interest of ;.@O per annum which signifies that inflation is merely eating up the money in the bank account so individuals should come out of just keeping their money in their bank accounts and should invest in the financial instruments to fetch higher returns.

,2 M8!9 " F 8$(,(?(".

Marketing feasibility involves determining the prospects of financial advisors in the growing economy like %ndia. The study includes assessing the need of financial institutions to achieve all the individualCs financial goals and keeping these goals in mind how do they recommend certain investment options in the market in order to provide value additions to individualCs current portfolio P savings potential. +or assessing the satisfaction level of investors who are availing financial advisory services, the performance of the current players in the markets will be studied and their strength and weakness will be analy0ed, %f the investorCs satisfaction level from the current advisor is less, then greater will be the feasibility of prospects of financial advisors in the %ndian market.

.-5

..-

After analy0ing the response, marketing feasibility e7ist on the basis of following discoveries.

1E 6!)>"# )* C8&("8? ($ "# M8:)! O,: 1"(' , #(nd In' $"- n"$
%t was observed that <9.;O of the respondents do investments for achieving growth of capital i.e. revenue ma7imi0ation. Safety of capital was considered secondary objective behind investments as only :@.?O of the respondents think about their safety of capital i.e. assured returns which reflects that investors are more concerned for growth rather than safety irrespective of their financial goals in life. A financial advisor can take care of all the financial goals in keeping three goals in mind, he can recommend certain investment options ranging from mutual funds, insurance, %#", post8office schemes, secondary markets, etc

2E L)> $8'(n; P)" n"(8?

"ut of the total sample, around <>O of the respondents said that they try to save money which depicts low saving potential among the %ndian investors. They are not in the habit of saving on a regular basis as it was observed that only =B.?O always save some portion of their take home salary. The financial advisor should promote regular savings among the investors so as to open various investment channels for them to fetch good returns.

4E In' $")!$ "89(n; F(n8n1(8? D 1($()n$ Ind & nd n"?.

%nvestors are taking their financial decisions independently without doing any financial planning which reflects the need for financial advisors who will take note of and record all the financial goals and will simultaneously work out the money value for each of the goals. Additionally, financial advisors can also set aside some money for contingencies K medical and other emergencies in li2uid form and invest the rest in diversified portfolio so that the risk gets distributed.

4E H(;# A>8! n $$ )* F(n8n1(8? Ad'($)!$ (n "# Ind(8n M8!9 "

Majority of the investors i.e. ?>O of the respondents were aware about the concept of financial advisors but among them, very few investors have actually gone for availing these services which shows lack of trust and confidence in the services provided by the financial advisors in the eyes of general public. The financial advisors should find out the ...

deficiencies and flaws in the current services being provided to the investors and attempt at suggesting ways and means to remedy the same.

IE H(;# L ' ? )* S8"($*81"()n *!)- E7($"(n; F(n8n1(8? Ad'($)!$

Majority of the investors were very satisfied with the services provided by the e7isting service providers which primarily include !itibank, -4+! Bank, -SB! Bank, etc. Thus it becomes evident that the satisfaction level of the investors is high from the e7isting advisors and thereby validates the prospects of financial advisors in the %ndian market.

12 T $" )* H.&)"# $($ D C)n1?%$()n

As it could be seen from the above factors that investors are having low saving potential, growth of capital acts as a primary objective behind investments, investors taking financial decisions independently, high level of satisfaction from e7isting financial advisors, which depicts that there is a need of financial institutions to approach these investors in a proper manner so as to provide value additions to the saving potential and portfolio. The hypothesis holds true that there e7ist a potential growth in the wealth management industry which represents huge prospects of financial advisors in the growing economy like %ndia. To conclude, the above research substantiates both financial and marketing feasibility for the prospects of financial advisors in the %ndian market.

..2

CHAPTER 10 RECOMMENDATION AND SU66ESTIONS

..3

"n studying the peculiarities of the wealth management industry and analy0ing the responses of the investors on their perception and e7pectation from a financial advisor, the following points are recommended which a general financial advisor should consider while approaching the people. %ndia is seeing a maturing financial environment. %nterest rates have fallen and unlike in the past, options to attract savings e7ist through a spate of financial products and services that have differing risk1growth and asset accretion propositions. %t is becoming increasingly obvious to people that their money, in real terms, would fall in value if they were to keep their money in the bank. And hence the keenness to find out the right avenue that would help grows their savings or assets. Dhile this is becoming a universally undeniable desire, the fact is that some people donCt have the knowledge and inclination to understand the financial markets and others donCt have the time to follow them. This then leads to financial decisions being taken by individuals based on either relationship hearsay or the sales call of a vendor.

82 Un,(8$ d Ad'($)!.
%nvestment Advisory Services are in this business of managing the assets of individuals and corporations. -owever, the distinct model of services should enables the advisors to offer unbiased advise on the entire spectrum of personal finance, keeping the clients interest foremost while doing so. The investment strategies developed across perpetuity should outline a detailed financial plan with fre2uent reviews of investment decisions made to ensure that portfolios are in line with what was planned.

,2 C !"(*( d F(n8n1(8? P?8nn !

+inancial planning is a new animal in the %ndian market. The big thing to happen is the coming to %ndia of the !ertified +inancial #lanner F!+#G mark, owned by the Board of Standards in the ,S and licensed out to non8profit associations in :> countries, including the ,S, !anada, Australia and the ,.. )eading financial playersKasset management companies, banks, mutual funds and insurance companies, forms these associations.

..4

Another player in this space is the (S'Cs !ertification of +inancial Markets F(!+MG, an arm of the (ational Stock '7change that tests and certifies insurance and mutual fund agents. A third institution, the Association of Mutual +unds FAM+%G, is encouraging its agents to morph from distributors to advisors. Apart from the institutions, some individuals and small companies have set up practice anticipating that the market will move from an ad8hoc approach to a planned one.

..5

12 F(n8n1(8? P?8nn(n; S#)%?d B En1)%!8; d

%t is a process in which an individual sets long8term financial goals through investments, ta7 planning, asset allocation, risk management, retirement planning and estate planning. Most of us approach our financial lives like the disorgani0ed traveler who gets to his destination eventually and perhaps even enjoys the rough ride. De think we have a clear roadmap in mind, but our financial lives are marked by ad8hoc decisions and capitulation to the

..2

temptations of the flavors of the financial season. "ne of the myths regarding financial planning is that only rich individuals and -(%s can undertake this. This perception e7ists because most players in the market target these people, as they are very profitable customers. -owever, anyone can use financial planning. %n fact, individuals should use effective financial planning to build their wealth over the years.

..3

CHAPTER 11 APPENDI/+ KUESTIONNAIRE

..4

(ameE [[[[[[[[[[[[[[[[[[[[[[[[[[[ AgeE [[[[[[[[[[[[[ "ccupationE [[[[[[[[[[[[[[[[[[[[[[[[[[[ Se7E [[[[[[[[[[[[ Annual %ncomeE [[[[[[[[[[[[[[[[[[[[[[[[[[[ !ityE [[[[[[[[[[[[[

:. Dhat is your objective behind investments\ FaG Safety of !apital FbG $etirement FcG Beating %nflation FdG Ta7 Minimi0ation FeG )i2uidity FfG Nrowth of !apital 8 $eturns FgG "thers Fplease specifyG [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

=. Since when are you investing in financial instruments\ FaG )ess than ; months FbG ; months K 9 months FcG 9 months K > months FdG > months K := months FeG More than := months FfG "thers Fplease specifyG [[[[[[[[[[[[[[

;. 4o you plan your investments\ FaG *es FbG (o, why [[[[[[[[[[[[[[[[[[[[[[[[[

<. Dhat is your practice on saving money\ FaG % donCt believe in saving. FbG %Cd like to save, but my e7penses P financial commitments do not permit me. FcG % try to save whenever P wherever possible. FdG % always save some percentage of my take8home salary without e7ception. FeG "thers Fplease specifyG [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ @. -ow much thought have you given to saving for retirement\ FaG &ery little FbG Some FcG A lot FdG (one

..5

9. Dhen do you prefer one should start planning for retirement\ FaG ,nder ;A FbG ;: K <A FcG <: K @A FdG Above @A

@. Dhat do you feel is considered to be the Jfundamentally safeC form of investment\ FaG Bank deposits FbG #roperty1)and FcG #ostal deposits FdG Nold FeG )ife insurance policies FfG Novernment bonds FgG Mutual funds FhG '2uity1Shares FiG "thers Fplease specifyG [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

9. -ow do you take financial decisions\ FaG %ndependently FbG Advise from friends 1 relatives FcG Broker FdG Advise from a !hartered Accountant FeG Advise from a Bank FfG +inancial Advisors FgG "thers Fplease specifyG [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

?. 4o you have any %nsurance #olicy\ FaG *es FbG (o

>. %f yes, why did you buy an %nsurance #olicy\ FaG As a means of saving FbG As a means of saving ta7 FcG +or security against death FdG "thers Fplease specifyG [[[[[[[[[[[[[[

B. Are you aware about the concept of +inancial Advisors\ FaG *es FbG (o

.2-

:A. 4o you currently avail financial advisor services1private banking services\ FaG *es FbG (o, why [[[[[[[[[[[[[[[[[[[[[[[[[ ::. %f yes, from whom\ FaG !itibank FbG -4+! Bank FcG Allegro !apital Advisors FdG Bajaj !apital FeG -SB! Bank FfG *'S Bank FgG $eligare FhG others Fplease specifyG [[[[[[[[[[[[[[

:=. Dhat are the products you are getting from your service provider\ FaG Mutual +unds FbG %nitial #ublic "ffer F%#"G FcG Secondary Market FdG #ost "ffice Schemes14ebt FeG %nsurance FfG $eal 'state1#roperty FgG Ta7 #lanning FhG )oans FiG Administrative Services FjG Nold FkG Art1#aintings FlG "thers Fplease specifyG [[[[[[[[[[[[[[

.2.

CHAPTER 12 BIBLIO6RAPHY

.22

The following companies and associationCs web sites were referred while collecting information used in the research. :. %nternet Source I httpE11www.yesbank.in I httpE11www.citibank.co.in1 I httpE11www.utibank.com1 I httpE11www.hsbc.co.in I httpE11www.religarewealthcare.com I httpE11www.hdfcbank.com I httpE11www.bajajcapital.com I httpE11www.online.citibank.co.in

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