Chapter 1 Objective and Scope of the study

Objective of study
To study the prospects of Financial Planning in the growing economy like India. People should come out of the concept of just keeping their money in Savings Account and Fixed eposits and should concentrate on their financial planning to maximi!e returns "y taking proper guidance from financial planner.

Financial Planning
Financial planning is the process of charting out the money course of your life. It#s like having

a financial roadmap that guides your every step till you pass on the "aton to the next generation. In other words$ it is a process in which an individual sets long%term financial goals through investments$ tax planning$ asset allocation$ risk management$ retirement planning and estate planning. &ost of us approach our financial lives like the disorgani!ed traveler who gets to his destination eventually and perhaps even enjoys the rough ride. 'e think we have a clear roadmap in mind$ "ut our financial lives are marked "y ad%hoc decisions and capitulation to the temptations of the flavors of the financial season

Scope of Financial Planning

Sometimes it so happens that when one consulted with a financial advisor in the past he felt that he was asked to "uy something he didn#t fully understand. &ay"e he felt that products were recommended without consideration for his overall financial situation. In cases like this$ comprehensive$ holistic$ fee%only financial planning eliminates such concerns. A person receives o"jective advice targeted to his needs and goals. (ne of the myths regarding financial planning is that only rich individuals and )*Is can +ndertake this. This perception exists "ecause most players in the market target these people$ as they are very profita"le customers. )owever$ anyone can use financial planning. In fact$ individuals should use effective financial planning to "uild their wealth over the years. there are financial planners who service small individuals too. )owever$ individuals need to remem"er the financial planners charge for the services they render$ so they should "e ready to pay for the advice.

Chapter 2 Literature Revie ! "ndustry Overvie

1# "ntroduction to Financial $dvisors

1#1# Overvie Planning for a secure financial future is not easy. ,et increasingly$ individuals are in charge of their own financial futures. &ost are aware that planning is critical$ yet don#t the have time or the expertise to develop a plan and make the needed financial decisions. So there arises a need for F"%$%C"$L $&'"SORS to manage the individual#s wealth and the whole process of managing this wealth is known as 'ealth &anagement. There are a num"er of financial advisors offering a diverse portfolio of services to suit different financial re-uirements of their clients. In order to accomplish the task$ these companies provide the assistance of professional financial advisors. These financial advisors help individuals or corporate manage their wealth appropriately through.

1#1#1#

"nvest(ent Solutions) The financial planner helps the individuals diversify their

portfolio through alternative investment plans$ mutual funds$ e-uities$ and even save for retirement through annuities.

1#1#2.

Financial Planning) Financial Planning is an exercise aimed to ensure availa"ility of

right amount of money at the right time to meet the individual#s financial goals. Financial planners plan individual#s current expenditures and save for future short%term or long%term goals "y analy!ing different options availa"le.

1#1#*#

Retire(ent Planning. The financial planner guides their clients in planning for their

financial re-uirements after retirement$ "y helping them identify goals$ researching and analy!ing different opportunities to secure funds and make investments to suits their needs.

1#1#+#

,ealth -anage(ent. It is a comprehensive service to optimi!e$ protect and manage

the financial well%"eing of an individual$ family or corporation. Its "asic definition covers advice on loans$ investments and insurance to give a "road picture of how individuals should "est deploy their financial resources. A "roader picture may include tax advice$ estate planning$ "usiness planning$ charity foundations and other financial needs

/ven though one of the most significant factors in our life is the state of our personal finances$
4

we rarely spend time on managing them since unlike "usinesses. The reason "eing$ we are not accounta"le to any one for our personal financial goals and results. As a result we tend to get careless in our financial matters. I know we all understand the importance of savings "ut let us not get confused "etween savings and investment. &ere savings 0putting aside a portion of earnings1 do not insure or guarantee achievement of future financial goals 1#2# Financial Planner .,ealth Planner ! Financial $dvisor/ The financial planner helps identify various taxa"le and non%taxa"le investments. This is not a comprehensive list of services. They may differ from one financial management company to another. (ne can select the services according to their re-uirements$ "e it personal or professional. A financial planner work "egins with a consultation with the client$ from whom the planner o"tains information on the client#s finances and financial goals. The planner then develops a comprehensive financial plan that identifies pro"lem areas$ makes recommendations for improvement$ and selects appropriate investments compati"le with the client#s goals$ attitude toward risk$ and expectation or need for a return on the investment. Financial planners usually meet with esta"lished clients to update them on potential investments and to determine whether the clients have "een through any life changes2such as marriage$ disa"ility$ or retirement2that might affect their financial goals. Finding clients and "uilding a customer "ase is one of the most important of a financial planner#s jo"$ "ecause referrals from satisfied clients are an important source of new "usiness. &any planners also contact potential clients "y giving seminars or lectures or meet clients through "usiness and social contacts. Role of Financial Planner0s a1 efining your 3oals
"1 Saving for them. c1 4overing 5isk
d1 Planning for

e1 &aking It )appen f1 Total Financial Solutions g1 The 6alancing Act

2# "nvest(ents
2#1# Overvie

The money you earn is partly spent and the rest is saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment. In other words$ Investment is the act of committing money or
capital to an endeavor with the expectation of obtaining an additional income or profit. #

It7s actually pretty simple. investing means putting your money to work for you. /ssentially$ it7s a different way to think a"out how to make money. There are many different ways you can go a"out making an investment. This includes putting money into stocks$ "onds$ mutual funds$ or real estate 0among many other things1$ or starting your own "usiness. Sometimes people refer to these options as 8investment vehicles$8 which is just another way of saying 8a way to invest.8 /ach of these vehicles has positives and negatives$ which will "e discussed later in the thesis. The point is that it doesn7t matter which method you choose for 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$ it7s the most important concept in the current scenario to understand. 2#2# 1asic "nvest(ent Objectives Investing is a conscious decision to set money aside for a long enough period in an avenue that suits your risk profile. The options for investing our savings are continually increasing$ yet every single investment vehicle can "e easily categori!ed according to three fundamental characteristics % Safety$ Income and 3rowth % which also correspond to types of investor o"jectives. 'hile it is possi"le for an investor to have more than one of these o"jectives$ the success of one must come at the expense of others. )ere we examine these three types of o"jectives$ the investments that are used to achieve them and the ways in which investors can incorporate them in devising a strategy. a1 Safety "1 Income c1 9 3rowth of 4apital

2#2#+# Secondary Objectives

a1 4ost of Inflation "1 Tax &inimi!ation c1 &arketa"ility : ;i-uidity d1 5etirement

*# 2ypes of "nvest(ents
Overvie There are many ways to invest your money. (f course$ to decide which investment vehicles are suita"le for you$ you need to know their characteristics and why they may "e suita"le for a particular investing o"jective. < e"t &arket < 6onds < &utual Funds < /-uity &arket < Insurance < 4ash < 3old < 5eal /state

+# Financial Planners in the -ar3et

A well%-ualified financial planner like a 4ertified Financial Planner 04FP1 would work with a person to prepare his plan. A 4PF is finance savvy and com"ines the o"jectivity and trust$ developed through years of experience and expertise in planning one#s personal finance. The kinds of services Financial Planners offer can vary widely. Some planners assess every aspect of one#s financial life$ including saving$ investments$ insurance$ taxes$ 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 follows. < < < < < < < < ,/S 6ank 4iti"ank +TI 6ank ;imited )S64 6ank 5eligare /nterprises ;imited ) F4 6ank ;imited 6ajaj 4apital Allegro 4apital Advisors Private ;imited

+#1# 45S 1$%6 +#1#1# "ntroduction

,/S 6A*= has "een conceived in the spirit of professional entrepreneurship$ with an unstinted commitment to esta"lish a high -uality$ technology driven$ state%of%the%art private Indian 6ank catering to >/merging India#. The vast "anking experience of the Promoters$ 5ana =apoor and Ashok =apur who have a collective financial stake of 9?.@AB has "een strengthened "y the financial support of 5a"o"ank *ederland to provide ,/S 6A*= a strong foundation of enduring financial trust ,/S 6A*= looks to offer comprehensive "anking and financial solutions. 'hich is why$ they have inducted top -uality )uman 4apital across all the "anking functions$ including 4orporate C Institutional 6anking$ Financial &arkets$ Investment 6anking$ 6usiness C Transactional 6anking and 5etail 6anking C 'ealth &anagement.

+#1#2# Services
,/S 6A*= is committed to helping you grow your money. Their dedicated team of financial experts devises personali!ed investment plans$ keeping your specific goals in mind. They provide you with o"jective recommendations for efficient portfolio allocation$ and also ensure increased protection from potential risks. 3uided "y the knowledge that strategic planning is the key to helping you achieve your financial goals$ the "ank experts follow a regulated approach to provide you with a customi!ed investment plan. From &utual Funds to Insurance$ the "ank helps you to capitali!e on all the availa"le opportunities. They also intend to shortly expand their suite of wealth management products to include art$ real estate and jewellery advisory. < 4orporates C institutions < 6usiness "anking < 4orporate finance < 5etail "anking < Investment "anking < Financial markets < Transaction "anking

+#2# C"2"1$%6
+#2#1# "ntroduction
4itigroup in India 4itigroup is the single largest foreign direct investor in the financial services industry in India. 4ommitted to India for over DEE years$ 4itigroup considers itself a local "ank with an international perspective "acked "y the largest glo"al network. 'ith a staff strength of over DF$EEE$ 4itigroup has consolidated its position as the most innovative and comprehensive financial products and services provider in the country$ and today has a customer "ase of over D$EEE large corporate$ over AA$EEE small and medium enterprises and over F.F million retail customers. A pioneer in consumer "anking$ 4iti"ank was the first to introduce credit cards$ focused consumer lending programs and electronic "anking in India. Today$ the 4iti"ank network comprises of 9G "ank "ranches across AH cities and over IEE 4iti4ard 6anking centersJwhich com"ine AT&s and self%service phone and Internet "anking2offering 4iti3old wealth management$ credit cards$ mortgage services$ Auto ;oans$ Personal ;oans$ Suvidha and *5I Services. Through 4itiFinancial$ 4itigroup offers consumer finance services in the country.

+#2#2# Services
4iti"ank has a well%organi!ed system of 'ealth &anagement services in India that give you unparalleled advantage and opens up the opportunity to maximi!e your wealth. The 4itigold 'ealth &anagement is an innovative feature to complement 4iti"ank and their range of "anking services in India. The 4itigold 'ealth &anagement process assures that 4iti"ank#s "anking services in India are comprehensive and have "een designed keeping the long%term "enefits and convenience of the customer in mind.

+#2#*# Service Offerings

a1 &utual Funds "1 Tax Advisory Services c1 5eal /state Advisory Services d1 Art Advisory Services e1 Insurance Services

+#*# 72" 1$%6 L2&# +#*#1# "ntroduction

+TI 6ank was the first of the new private "anks to have "egun operations in DGGI$ after the 3overnment of India allowed new private "anks to "e esta"lished. The 6ank today is capitali!ed to the extent of 5s. A?E.DA 4rores with the pu"lic holding 0other than promoters1 at HA.I9 B. Presently the 6ank has a very wide network of more than IFE "ranch offices and /xtension 4ounters. The 6ank has strengths in "oth retail and corporate ban3ing and is committed to adopting the "est industry practices internationally in order to achieve excellence.

+#*#*# Service Offerings by 72" 1$%6

a1 58uity -ar3et Content 4apital &arket is pioneer in offer e-uity related content for +TI 6ank#s portal which includes. < /-uity &arket 4ommentary < Stock Price ata < 4harting Facility < Financial ata < IP( ata < Portfolio Tracker "1 -utual Funds Content Indian &utual Fund industry has picked up$ It is fastest growing industry$ with num"er of growing investor$ today$ there are 9@ &utual Funds and over AEE schemes with total assets of approximately 5s. ?D$EEE crores. So it has "ecome essential for you to keep updated information on your portal. 4apital &arket offers you range of content solution as follows. < &utual Fund *AK < Fund Profile Sheet < ividend C &o"ili!ation etails < &utual Fund J *ews < &utual Fund J *F( < &utual Fund J Tools

10

+#+# 9S1C 1an3

+#+#1# "ntroduction The antecedents of the )S64 3roup in India can "e traced "ack to (cto"er D?F9 when the &ercantile 6ank of India$ ;ondon and 4hina was founded in 6om"ay 0now &um"ai1. The ac-uisition in DGFG "y The )ong=ong and Shanghai 6anking 4orporation ;imited of the &ercantile 6ank was a decisive factor in laying the foundation for today7s )S64 3roup. )S64 in India is proud to have retained the 3roup7s pioneering streak "y "eing an active partner in the development of the Indian "anking industry % even giving India its first AT& way "ack in DG?H. The organi!ation#s adapta"ility$ resilience and commitment to its customers have further ena"led it to survive through tur"ulent times and prosper through good times over the past DFE years.
+#:# Religare 5nterprises Li(ited

+#:#1# "ntroduction
5eligare /nterprises ;imited 0A 5an"axy Promoter 3roup 4ompany1 through 5eligare Securities ;imited$ 5eligare Finvest ;imited$ 5eligare 4ommodities ;imited and 5eligare Insurance 6roking ;imited provides integrated financial solutions to its corporate$ retail and wealth management clients. Today$ we provide various financial services which include Investment 6anking$ 4orporate Finance$ Portfolio &anagement Services$ /-uity C 4ommodity 6roking$ Insurance and &utual Funds. Plus$ there#s a lot more to come your way. 5eligare is proud of "eing a truly professional financial service provider managed "y a highly skilled team$ who have proven track record in their respective domains. 5eligare operations are managed "y more than AEEE highly skilled professionals who su"scri"e to 5eligare philosophy and are spread across its country wide "ranches. Today$ we have a growing network of more than DFE "ranches and more than 9EE "usiness partners spread across more than D?E cities in India and a fully operational international office at ;ondon. )owever$ our target is to have 9FE "ranches and DEEE "usiness partners in 9EE cities of India and more than H International offices "y the end of AEE@. 5eligare is a truly professional financial service provider managed "y a team of highly skilled professionals who have proven track record in their respective domains. 5eligare has the widest reach through its 5egional$ Lonal and 6ranch (ffices spread across the length C "readth of the country.

11

+#;# 9&FC 1an3 +#;#1# "ntroduction

The )ousing evelopment Finance 4orporation ;imited 0) F41 was amongst the first to receive an 7in principle7 approval from the 5eserve 6ank of India 056I1 to set up a "ank in the private sector$ as part of the 56I7s li"erali!ation of the Indian 6anking Industry in DGGI. The "ank was incorporated in August DGGI in the name of 7) F4 6ank ;imited7$ with its registered office in &um"ai$ India. The "ank is committed to maintain the highest level of ethical standards$ professional integrity$ corporate governance and regulatory compliance. ) F4 6ank7s "usiness philosophy is "ased on four core values % (perational /xcellence$ 4ustomer Focus$ Product ;eadership and People.

+#;#*# Service Offerings

&utual Funds Insurance /-uity Financial Planning

+#<# 1ajaj Capital +#<#1# "ntroduction

6ajaj 4apital is one of India#s leading Financial Services companies offering Free Advice on Investments$ Insurance$ Tax Saving$ 5etirement Planning$ Financial Planning$ 4hildren#s Future Planning and other services. They are also S/6I%approved 4ategory I &erchant 6ankers# Today$ 6ajaj 4apital is a one of the largest financial planning and investment advisory companies in India$ 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$ "oth pu"lic and private. In addition$ they also provide investment assistance "y helping clients complete all the formalities$ and help them keep regular track of their investments.

12

+#=# $llegro Capital $dvisors Private Li(ited +#=#1# "ntroduction

Allegro Advisors is a leading Indian full service investment "ank that "uilds value across a spectrum of clients$ including the government$ corporations$ financial institutions$ high net% worth individuals and professionals. 4omprehensive service offering Investment 6anking$ 4apital &arkets$ Asset &anagement C Private 6anking /nsuring client7s financial well%"eing Team of experienced advisors

Allegro 4apital is a comprehensive Investment 6ank that comes with years of expertise in offering financial solutions and advisory services across the corporate world. Allegro 4apital Advisors has offices located in key metros across India. (ur teams of financial advisors and specialists have the local knowledge$ contacts and awareness to create optimum solutions that meet our client7s financial am"itions. 3iving our clients the glo"al local advantage$ we have "roadened our reach to AF major cities and towns of India and esta"lished strategic alliances with several renowned advisory houses and institutions$ internationally.

+#=#2# Services
Allegro#s Services are "roadly classified into. 4apital &arkets advisory services 4orporate Finance Services Investment Advisory Services covering retail and corporate investment and wealth management services$ Portfolio &anagement Services$ Secondary market execution services and Insurance Advisory Services

13

Figure +#;) $llegro Service Offerings

14

Chapter * Research -ethodogy

15

Research -ethodology
1# Objective

To study the prospects of Financial Planning in the growing economy like India. People should come out of the concept of just keeping their money in Savings Account and Fixed eposits and should concentrate on their financial planning to maximi!e returns "y taking proper guidance from financial planner.
2# Proble(

/xpanding needs and proliferation of financial products are making it difficult for individuals to invest without planning. &ost are aware that planning is criticalM yet don#t have the time or the expertise to develop a plan C therefore the role of Financial Planner comes in picture.
*# 9ypothesis

There exist a potential growth in the wealth management industry and thus this project authenticates the feasi"ility of financial planners in the market.
+# Research &esign

This project is more of an exploratory research with more of -ualitative analysis than -uantitative. The data collection method for this project "egins with finding a sample of the population. The population for this project was the entire elhi$ 3urgaon and *oida. The research methodology adopted was "oth primary and secondary. Primary data was collected to study the investment psyche of a person$ their practice on saving$ investment options availa"le and the need of financial planners to manage individual#s wealth. Nuestionnaire was designed and Interviews "oth direct and through telephone were undertaken$ to ascertain the investor#s "ehavior as well as to depict the future prospects and growth momentum of the wealth management industry$ on which the hypothesis was tested.

:# &ata Collection -ethods > "nstru(ents

The instrument for data collection was a structured -uestionnaire targeted towards people who do investments. This -uestionnaire was designed to know the investment psyche of a person while investing in the financial products. Karious "anks and private wealth advisors were also interviewed to get an in%depth knowledge of their services and how they provide value

16

additions to the customer#s existing portfolio and savings potential. The interview helped us to know what all services are offered "y the company to push the product to the end consumer. The mode of communication was informal C friendly conversation$ which does not limit discussion within a well%defined "oundary. This helps in listening to the financial advisors and learning as to what they have to say$ "ecause a lot of importance needs to "e given to this$ as they are the people who stay in the market the whole day and know it "etter than any"ody else. Informal C friendly conversation also allows the mask$ that one wears when doing "usiness$ to "e dropped to accommodate free flow of thoughts and ideas.

;# &ata Collection Sources ;#1# Pri(ary Research

5esearch was done to get a detail overview of the wealth management industry and study the need for financial planner in the current scenario. Nuestionnaire was designed to study the investment psyche of a person$ their practice on saving$ different investment options availa"le and the need of financial planners to manage individual#s wealth. This project is mainly "ased on first hand o"servation in the market$ the way financial planning functions$ scope of financial planning and the need of a certified financial planner.

;#1#1# "ntervie s
Interviews had "een taken with the relationship managers of various "anks$ private wealth management companies$ "oth direct and indirect i.e. through telephone. The interview ena"led a detail understanding of the ortfolio management services and also highlights their service offerings$ on which they differ from one another. The interview further helped in the design of the -uestionnaire.

;#1#2# ?uestionnaire &esign

A structured -uestionnaire was designed covering "oth open and close ended -uestions$ to study the perception of people regarding investment avenues and the concept of financial planner. OSpecimen of the -uestionnaire is attached in A**/P+5/ AQ. This -uestionnaires also re-uired the respondents to mention the degree of importance he:she give to the following parameters while going for a financial advisor$ where the degree varied

17

from >A"solute Importance# to "eing >Indifferent#. < 6rand *ame < 4harges < Flexi"ility < (verall Services < 4lientele < Transparency < 5eference < Kalue Additions < *4F&:A&FI 4ertified The respondents was also asked regarding their o"jective "ehind investments and their practice on saving money for investment such as retirement$ paying off their loans lia"ilities. The -uestionnaire also stressed on the role of financial planning$ future of financial advisors$ products offered "y different financial planners and perception and satisfaction level of customers who are currently availing these services. Individuals decision while they make investments were also asked as there are many people who takes their decisions independently or advice from chartered accountant.

Secondary Research
Karious sources of information were collected for attaining clarity on the prospects of wealth management industry and the various financial planners in the market. The source also includes "asic investment o"jectives and the various types of investment avenues open to an individual. 6 )owever the following sources were considered for information gathering. < 4ompanies we"sites < Articles and reports availa"le on the we" < Investment &aga!ines < Karious other sources mentioned in the references$ in A**/P+5/

18

<# Population considered for research

<#1# &e(ographic Seg(entation < Age. AF to @E ,ears < Sex. &ale:Female < Socio%/conomic 4lassification 0S/41. 6elonging to S/4 A$ 6 and 4 portion of the society. < Income 3roup. Income a"ove 5s.9$EE$EEE p.a.

<#2# @eographic Seg(entation

< *ew elhi < *45. *oida and 3urgaon

=# Sa(pling Fra(e
=#1# Probability Sa(pling) Simple 5andom Sampling =#2# $rea of Sa(pling 4orporate executives$ 6usinessman$ Students and Professionals 0Faculty1 were considered. < /ra 3roup$ *ew elhi < Pentair 'ater System$ *ew elhi < +TI 6ank$ *ew elhi < )ewitt Associates$ 3urgaon < /valueserve.com Pvt. ;td.$ 3urgaon < Allegro 4apital Advisors Pvt. ;td.$ 3urgaon < Tata 4onsultancy Services$ *oida < (nline Nuestionnaires

:#=#*# Sa(ple &etails

DEE people "elonging to different fields$ who do investment$ were asked to fill the -uestionnaire$ on the "asis of which an attempt is made to study the prospects of Financial Planning in the market. The sample unit consists of those people who are trading in secondary markets$ mutual funds$ initial pu"lic offer$ insurance$ de"t instruments as they can give the accurate information a"out financial planning. A sampling frame has "een developed so that everyone in the target population has an e-ual chance of "eing sampled.
19

Personal "nfor(ation)
<

SeA Ratio. From the total DEE respondents DH were females and ?9 were males$ as also

shown in Fig.F.D "elow.

Figure :#1) SeA Ratio of the Sa(ple

17%

female male

83%

<

@eographical &istribution. &ajority of the respondents were from elhi followed

"y *oida and 3urgaon as shown in Fig.F.A.

noida 15% gurgoan 13% noida gurgoan delhi delhi 72%

Figure F.A. 3eographical distri"ution of the sample

20

<

Occupational Structure. Samples include responses from 6usinessmen and a good

num"er of service classes which includes 4hartered Accountant$ /ngineer$ 6anker$ 4/($ Software professionals$ etc so as to include their perception and awareness regarding financial planners.

businessmen 11% servicemen businessmen servicemen 89%

Figure F.9. (ccupational Structure of the sample <

"nco(e Levels) Income levels were classified into F levels$ namely "elow less than D

lacs$ D.F to 9 lacs$ 9 to I.F lacs$ I.F to @ lacs and a"ove @ lacs.

less than 1.5 lac 21%

above6 lac 10%4.5 to6.0lac 20% 3.0 to 4.5 lac 12%

above6 lac 4.5 to6.0lac 3.0 to 4.5 lac 1.5 to 3.0 lac less than 1.5 lac

1.5 to 3.0 lac 37%

Figure F.I. 4lassification of Income ;evels of the Sample

21

<

$ge @roup) Income levels were classified into ? levels so as to know which age group

is much aware a"out the wealth management concept.

80 70 60 50 40 30 20 10 0 20 25 26 30 31 35 36 40 41 45 46 50 51 55 56! "eries1

Figure F.F. 4lassification of Age 3roup of the Sample

22

Chapter + &ata "nterpretation

23

;# $nalysis of the Response

3iven "elow are the graphical representations of the responses received on -uestions asked through the -uestionnaire. The interpretation derived and the model adopted will "e explained in detail in the later part of the report. received accordingly. ;#1# ,hat is your objective behind invest(ents B Investing is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The -uestionnaire asked the respondents to reveal their o"jective "ehind investments$ majority of the respondents disclosed growth of capital as their prime o"jective while safety of capital stands secondary. This response reflects the investor willingness to take calculated risks for growth of their capital as also highlighted in Figure @.D. (n asking the following -uestions$ the replies were

safet' of ca%ital retirement beating inflation ta( minimi)ation li&iudit' gro$ th of ca%ital #thers 0 3.31 10 2.48 3.31

15.7 14.88

14.05

"eries1

46.28

20

30

40

50

Figure @.D. ("jective "ehind Investments The research has highlighted that growth of capital is the most important factor which they consider wile investing as evident "y the response wherein I@.9B of the respondents voted for the same. )owever$ it can also "e seen that DF.HB of the investors prefer safety of their capital as their secondary o"jective which depicts that investors give greater emphasis to the returns and willing to adjust with safety of capital. ;i-uidity is the least important factor as only A.FB 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 li-uidity should have the minimum focus. In our sample$ inflation has only "een given 9.9B of the total sample which reflects that people are still not giving much consideration to inflation even due to a sharp rise in the

24

;#2# Since hen are you investing in financial instru(entsB The respondents were asked as from when they have started investing in financial instrument so as to ascertain the average period of experience of an investor in the market. The responses were then graphically represented in Figure @.A which indicates that majority of the investors i.e. I?.AB of the respondents have "een investing for more than DA months and signifies that the responses revealed are from experienced and -ualified investors which adds to the credi"ility and relia"ility of the research.

60 50 40 30 20 10.84 10 0 *3 monts 3 6 months 6 8 months 8 12 months 12! months 18.07 13.25 9.64 "eries1 48.19

Figure @.A. 5eader#s response on since when are they investing

;#*# &o you plan your invest(entsB

25

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 it#s a mere word of mouth. As many individuals follow word of mouth leaving "ehind the fact that every individual has different financial goals$ they tend up in making wrong decisions for their investments. &ost are aware that planning is critical$ yet don#t have the time or the expertise to develop a plan and make the needed financial decisions. (n analy!ing the response ?IB of the persons plan their investments while only D@B take investment decisions on ad hoc "asis$ as also disclosed in Figure @.9 "elow.

no 16%

'es no

'es 84%

Figure @.9. 5eader#s response on whether they plan their investments

;#+# ,hat is your practice on saving (oneyB

26

To determine the saving ha"its of the investors$ the -uestionnaire en-uired the respondents as a"out their practice of savings. The greater the inclination of saving the more will "e the funds availa"le for investment. Around IH.FB of the respondents try to save from their income$ while only AG.HB of the respondents always make an effort to save some part of their income$ as depicted in Figure @.I

50 45 40 35 30 25 20 15 10 5 0

47.52

29.7 19.8 "eries1

1.98 don+belive in high saving e(e%enses tr' to save al$a's save some %

0.99 others

Figure @.I. 5eader#s response on practice on saving money

(nly AB of the respondents don#t "elieve in savings$ which su"stantiate high importance of savings in Indian households. )owever$ it was also o"served that majority of the women respondents had high inclination for savings and try to save the maximum out of their availa"le income.

;#:# 9o (uch thought have you given to saving for retire(entB 27

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. Its called inflation$ which simply put$ means that purchasing power of money falls over time$ so you "uy less for the same amount of money or you have to pay more for the same -uantity of goods. (n analy!ing the level of importance the respondents give on saving for retirement$ majority i.e. IHB of the respondents give some importance while only D?B give a lot of importance to saving for retirement$ as highlighted in figure @.F "elow. This depicts non serious attitude of Indians while planning for their retirement.

none 17% none some 47% ver' little 18% ver' little a lot some a lot 18%

Figure @.F. 5eader#s response on ttho ught to saving for retirement

;#;# ,hen do you consider one should start planning for retire(entB

28

If you start planning for retirement early on$ you can "ridge the gap "etween what you have in your hand today and what you would like to have when you retire. 'hat to keep in mind while saving for retirement depends a lot on our early on in your life$ you can set aside smaller amounts. Planning for retirement in early age of employment is depicted on analy!ing the responses as 9F.?B start planning "elow the age of 9E years$ while IA.DB of the respondents feel$ the ideal age to "e a"ove IE years$ as revealed in Figure @.@ "elow. age and how much money you are willing to set aside every month. If you "egin saving for retirement

30*

35.79

31 40

22.11 "eries1

41 50

22.11

!50 0 10

20 20 30 40

Figure @.@. 5eader#s response on age preference to plan for retirement

;#< ,hat do you feel is considered to be the Cfundamentally safe for( of invest(entB

29

(n en-uiring from the respondent a"out what are the fundamental secure forms of investments$ 9F.IB of the respondents feel that investing in property is the safest form of investment followed "y Insurance as depicted in Figure @.H "elow. The least secured form of investment as revealed "y respondents is investment in e-uity as secondary market is su"ject to huge volatility C uncertainty. It can "e seen from the response that people are more willing to put their money in property or real estate in spite of the economy experiencing a major clim" in the property prices. A"out DI.IB of the respondents feel that 6ank deposits is also the safe form of investments as it gives assured returns on the sum invested.

40 35 30 25 20 15 10 5 0

35.33

14.37 7.78 3.59

15.57

12.57 7.19 2.99

"eries1

go ld

bo nd s

ba n, de %o sit s %r o% %o er t' ste ld e% os its

ur an ce

Figure @.H. 5eader#s response on fundamentally safe form of investment

30

m ut ule

ins

e& uit '

fu nd

@.H. 9o do you ta3e financial decisionsB

An individual#s decision has a vital role to play in achieving investment o"jectives and there"y making investments in a systematic manner. ecisions can make or "reak investment avenues as wrong decisions would merely lead to wrong investments resulting in major loss. (n en-uiring from the respondents a"out 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 experts. There are majority of respondents who feel that they can handle their portfolio on their own and hence make their own decisions regarding investments.

60 50 40 30 20 10 0

48 28 11 1
or s ot he rs ba n,

"eries1 7 4

1
br o, er en ds en tl' -.

in de %e nd

Figure @.?. 5eader#s response regarding taking financial decisions (n analy!ing the response I?B of the respondents take their financial decisions independently while only DDB of the respondents take investment decisions from financial advisors$ as also disclosed in Figure @.? a"ove. This opens up the door for various financial advisors who can target these investors and can give advisory services on various investment avenues there"y helping people to achieve their financial goals easily.

31

f in an c

ia la

dv is

fri

;#=# &o you have any "nsurance PolicyB ;ife is full of dangers$ "ut with insurance$ you can at least ensure that you and your dependents don#t suffer. The purpose of "uying insurance is to protect your dependants from any financial difficulties in your a"sence. It helps individuals in providing them with the twin "enefits 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 a"out the advantages with an insurance policy which can cover their life as well as prove to "e as a savings instrument.

no 25% 'es no 'es 75%

Figure @.G. 5eader#s response to having an insurance policy Around HFB of the respondents do have insurance policy$ while AFB of the respondents are still not availing this type of investment$ as depicted in Figure @.G a"ove.

;#D# "f yesE hy did you buy an "nsurance PolicyB

32

(n en-uiring from the respondents a"out why they "ought insurance policy$ majority of the respondents "ought insurance as a security against death which depicts people have ensured that their dependents don#t suffer incase of any uncertainty as life insurance indemnifies the nominees in case of an eventuality to the insured. 6y having insurance policy$ the financial future of the nominees is secured in the a"sence of the person insured. (f the respondents who possessed insurance$ 9IB of the respondents had purchased insurance mainly as a security against death while 9DB had "ought it primarily as a savings product. (ver HB of the respondents purchased insurance as a word%of%mouth due to high demand of the product and it was also o"served that around A?B of the respondents "ought insurance to save tax$ as depicted in Figure @.DE "elow.

40 35 30 25 20 15 10 5 0

34

31

28

"eries1 7

securit' of death

means of saving means of saving ta(

others

Figure @.DE. 5eader#s response for "uying an insurance policyR

;#1F# $re you a are about the concept of Financial $dvisorsB

33

There are a num"er of financial advisors offering a diverse portfolio of services to suit different financial re-uirements of the individuals. In order to accomplish the task$ these companies provide the assistance of professional financial advisors. The advisors educate individuals on the merits of a long%term approach and regular investing and help to re"alance their portfolio. (n analy!ing the response H?B of the respondents were aware a"out financial advisors while around AAB of the respondents were still not aware a"out professional financial advisors which depicts there lays a scope to penetrate these people and inform them regarding the services offered "y various financial planners.

no 22%

'es no

'es 78%

Figure @.DD. 5eader#s response on awareness of Financial Advisors

;#11# &o you currently avail financial advisor services!private ban3ing servicesB

34

&ajority of the respondents are currently not availing financial advisor services$ which reveal the concept of financial advisors is not that much developed in the Indian market. Individuals are earning and paying high taxes thus ignoring the taxation "enefits$ which they can avail "y proper computation of taxes. Individuals usually rely on 4hartered Accountants leaving "ehind the fact that they are experts in Accounting and not in wealth management so there is a need for Financial Advisors. )ence$ there is a re-uirement for one stop shop for all the financial needs of an individual. According to the response$ it can "e seen that @@B of the respondents are not availing any financial advisory services while only 9IB are taking financial advisory services. Thus there#s much scope left for the financial management companies to target these large num"er of people who are totally unaware a"out the whole concept$ as depicted in Figure @.DA "elow.

'es 34% 'es no no 66%

Figure @.DA. 5eader#s response to availing financial advisory services

;#1*# "f yesE fro( ho(B

35

To find out the various companies from where the investors get financial advisory services C make their decisions regarding investments. This would reveal the preference the respondents have for different companies. (n analy!ing the response$ H9.99B of the respondents were primarily availing financial advisors services from 4iti"ank and when they were asked the reason "ehind$ they replied 4iti"ank provides free advisory services and has got a strong "rand name. Secondly 9@B of the respondents were taking financial advisory services from ) F4 6ank followed "y others which include +TI 6ank$ S6I$ I4I4I 6ank$ etc which catered around 99.9B of the total sample.

80 70 60 50 40 30 20 10 0
re lig

73.33

36.67 16.67 3.33 10 13.33 20

33.33

"eries1

2a 5a 5c a% .l ita le l gr o ad vis or s cit ib an ,

36

1-

Figure @.D9. 5eader#s response regarding source of financial advisory

5eligare only catered to 9.9B of the total sample as this company has just started its operation in elhi C 3urgaon$ as depicted in Figure @.D9 a"ove.

;#1+# ,hat are the products you are getting fro( your service providerB

/" 2

/0

34 "

ot he rs

ba n,

ar e

ba n,

ba n,

There are num"er of financial advisors offering a diversified portfolio of services to suit different financial re-uirements of the investors. The advisory on financial products may differ from one financial planner to another yet one can select the services according to their re-uirements. According to our response$ around AAB of the respondents are availing advices on insurance products followed "y mutual funds which hold DI.@B of the total sample. This depicts there is a huge demand for insurance in the Indian economy as compared to other financial instruments. It can also "e inferred that individuals have started taking advises regarding tax planning and loans restructuring as depicted in Figure @.DI "elow.

mutual fund e&uit' insurance 7.32 ta( %lanning admin art 0 4.07 2.44 0.81 5 10 11.38 9.76 8.13 8.13 11.38

14.63

21.95 "eries1

15

20

25

37

Figure @.DI. 5eader#s response on products rendered "y advisors

+#1F# $nalysis of the Co(parison

it can "e o"served from Ta"le I.G that most of the financial advisors are not charging any fees for their advisory services i.e. they are giving it free of cost "ecause the "anks 04iti"ank$ +TI 6ank$ )S641 earn commission if the customer purchases mutual funds$ insurance$ from it. The "roking company earns "rokerage if the client purchases 56I "onds etc or if he does any e-uity trading. The "ank only charges marginal fees on the custodial services. )owever$ ) F4 6ank % instead of asking customers to "ring in a specific amount of funds % charges customers on various types of services it offers. The management of wealth depends on the customer7s risk appetite$ his investment o"jectives. (nce these are understood$ the "ank sends a written investment proposal on what the "ank thinks the portfolio should "e. )owever$ ) F4 6ank do charge clients from 5s.9F$EEE a year for tracking portfolio up to 5s.9F lakh and 5s.D$EE$EEE for tracking portfolio up to 5s.D crore. These services include e-uity%related services along with dedicated advisors. The "ank also offers services "etween 5s.DE$EEE and 5s.AF$EEE per annum for non%interactive products. The "ank$ however$ waives these fees if it earns money through transactions routed through the "ank. Taxation advisory is given "y very few players like Allegro$ 6ajaj 4apital$ +TI 6ank. Karious "anks have a tie%up model with different insurance and mutual fund companies like 4iti"ank has with 6irla so 4iti"ank will only sell 6irla insurance to their clients irrespective of the fact whether the product meets the client#s financial goals. Allegro is one player which takes care of loan restructuring. 4ommodity trading is only "eing handled "y 5eligare as a separate product as S/6I have not yet allowed commodity trading to "e a part of wealth advisory services. )owever "anks cannot offer portfolio management services to customers. This means that a customer cannot give money to a private "anker and ask the 5& to invest on his "ehalf in different financial products. This service can "e offered only "y entities other than a "ank such as 5eligare$ Allegro Advisors$ 6ajaj 4apital$ etc. A "anker therefore will have to call every time and get a written confirmation from the client "efore any deal is done.

38

Chapter :

Li(itations

39

;#1=# Li(itation of the research

< The scope of the research was limited to top ? wealth management companies$ namely YES
Bank, apital. itibank, !"# Bank, $SB Bank, %llegro apital %dvi&or&, $'F Bank, (eligare, and Ba)a)

< The sample area was primarily in elhi$ 3urgaon and *oida$ and accordingly the response is presumed to represent whole of India. < The sample si!e comprised of AEE respondents from different fields and income group$ and their responses are presumed to represent the wealth management market. < The score allotted "y the different respondents on different parameter might not "e with the same yardstick$ as individuals are su"jective in nature as well as the environment round them differs$ which play a critical role in "uilding up a perception.

40

Chapter ;

Conclusion and Findings

41

42

<# Conclusion
This part of research paper determines the prospects of financial advisors in the growing economy like India with relevance to the information derived from analysis of the responses. Feasi"ility of financial planners can "e studied "y "oth financial feasi"ility and marketing feasi"ility.
<#1# Financial Feasibility

Financial feasi"ility will study the need of financial advisors due to changes in the inflation rate$ loans$ insurance charges$ etc which investors usually ignored so "y availing the financial advisory services$ one can expect un"iased advise on the entire spectrum of personal finance and there"y adding value to the investor#s current portfolio and potential savings. The statistics regarding the investments are discussed "elow so as to show the trend of various factors in the Indian economy.

<#1#1# @ro ing 5cono(y

The anticipated growth rate of ?.D percent in AEEF%E@$ as per India#s AEEF%E@ /conomic survey$ acknowledges the momentum of development in the Indian 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 "e already underway$ is likely to accelerate that pace. 'hile the worry a"out rising crude prices$ which escalates imports and significantly contri"ute to the "urgeoning current account deficit$ appears to "e somewhat misplaced$ the possi"le risks to an otherwise rosy outlook arise from inflation$ interest rates and fiscal stance. India is the world#s second most populous country with a little over D "illion people and the DEth in terms of economic si!e$ representing around @B of world 3 P in AEEI. The impact of DF years of economic reform finally appears to have kicked in and allowed India to emerge as an attractive investment destination in the glo"al arena$ which is evident from the country#s swelling forex reserve 0D9@ "illion +S and increasing1.

43

2able <#1) "ndia 5cono(y 9ighlightsE 2FF2GF:

2able <#1) "ndia 5cono(y 9ighlightsE 2FF2GF: Population 0million1 3 P 0+S "illion1 5eal 3 P growth 0B1 3 P per capita 0+SS1 Inflation 0B1 /xports 0+S "illion1 Imports 0+S "illion1

2FF2 DE9H FE@ I.9 I?H 9.G I9.? FD.I

2FF* DEFF FFF ?.D FA@ I.G FA.H @D.I

2FF+ DEHA @DF H.9 FH9 F.E AA.D A?.H

India$ with an anticipated growth rate of ?B for the year AEEF%E@$ supported "y ro"ust growth in the Indian industries and service sector would "uild a strong "usiness 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 "ridge the gap "etween theory and practice in contemporary glo"al "usiness$ it would result in increase in the demand for financial advisors in the country$ there"y authenticating the prospects of financial advisors in the Indian market.

<#1#2# Strong Financial -ar3et

India7s financial markets have undergone rapid changes since the country em"arked on a program of economic reforms in DGGD. They have em"raced technology$ seen a su"stantial increase in the variety and volume of transactions$ and witnessed the emergence of new securities and new instruments. 4urrently$ market is experiencing a flood of li-uidity$ with different sources of funds availa"le depending on the re-uirement of the person. Also with 56I$ dilution of restrictions on foreign "orrowings$ Indian companies can now "orrow funds from a"road at attractive interest rates. India witnesses growing num"er of venture capitalist "ank which do not hesitate in investing in new projects and "ear high risk with the entrepreneur. Therefore$ the financial market scenario in India is conducive for procurement of funds for

44

launching the "usiness maga!ine in the market.

<#1#*# "nflation
Inflation is moving at around I.9E and the savings account is giving an interest of 9.FB per annum which signifies that inflation is merely eating up the money in the "ank account so individuals should come out of just keeping their money in their "ank account sand should invest in the financial instruments to fetch higher returns.

Figure <#1) 2rends in "nflation

<#2# -ar3et Feasibility

&arketing feasi"ility involves determining the prospects of financial advisors in the growing economy like India. The study includes assessing the need of financial planners to achieve all the individual#s 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 individual#s current portfolio C savings potential. For assessing the satisfaction level of investors who are availing financial advisory services$ the performance of the current players in the markets will "e studied and their strength and weakness will "e analy!ed$ If the investor#s satisfaction level from the current advisor is less$

45

then greater will "e the feasi"ility of prospects of financial advisors in the Indian market. To assess the marketing feasi"ility$ various "anks and private wealth advisors were also interviewed "oth direct and indirect i.e. through telephone to get an in%depth knowledge of their services and how they provide value additions to the customer#s existing portfolio and savings potential. The interview helped us to know what all services are offered "y the company to push the product to the end consumer. The interview further helped in the design of the -uestionnaire. A structured -uestionnaire was designed covering "oth open and close ended -uestions$ to study the perception of investors towards their preferred "rand of financial advisors and what they desire from the company. After analy!ing the response as done in chapter @$ marketing feasi"ility exist on the "asis of following discoveries.

<#2#1# @ro th of Capital is the -ajor Objective 1ehind "nvest(ents

It was o"served from Figure @.D that I@.9B of the respondents do investments for achieving growth of capital i.e. revenue maximi!ation. Safety of capital was considered secondary o"jective "ehind investments as only DF.HB of the respondents think a"out 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 thee goals in mind$ he can recommend certain investment options ranging from mutual funds$ insurance$ IP($ post%office schemes$ secondary markets$ etc.

<#2#2# Lo Saving Potential

As depicted in Figure @.I$ out of the total sample$ around I?B of the respondents said that they try to save money which depicts low saving potential among the Indian investors. They are not in the ha"it of saving on a regular "asis as it was o"served that only AG.HB 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. The savings for retirement among the investors is also very less as depicted in Figure @.F a"ove$ which reflects the a"sence of the "enefits in retirement planning. Investors are merely postponing planning for retirement "ut they forget that if successful plans are made then they

46

don#t need to "e worried a"out their future and can spend lavishly even after their retirement.

<#2#*# "nvestors ta3ing Financial &ecisions "ndependently

Investors are taking their financial decisions independently without doing any financial planning as depicted in Figure @.?$ 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 J medical and other emergencies in li-uid form and invest the rest in diversified portfolio so that the risk gets distri"uted.

<#2#+# 9igh $ areness of Financial $dvisors in the "ndian -ar3et

&ajority of the investors i.e. H?B of the respondents as represented in Figure @.DD were aware a"out the concept of financial advisors "ut among them$ very few investors have actually gone for availing these services which shows lack of trust and confidence in the services provided "y the financial advisors in the eyes of general pu"lic. The financial advisors should find out the deficiencies and flaws in the current services "eing provided to the investors and attempt at suggesting ways and means to remedy the same.

<#2#:# 9igh Level of Satisfaction fro( 5Aisting Financial $dvisors

&ajority of the investors were very satisfied with the services provided y the existing service providers which primarily include 4iti"ank$ ) F4 6ank$ )S64 6ank$ Allegro 4apital Advisors$ etc. Thus it "ecomes evident that the satisfaction level of the investors is high from the existing advisors and there "y validates the prospects of financial advisors in the Indian market.
<#* 2est of 9ypothesis > Conclusion

As it could "e seen from the a"ove factors that investors are having low saving potential$ growth of capital acts as a primary o"jective "ehind investments$ investors taking financial decisions independently$ high level of satisfaction from existing financial advisors$ which depicts that there is a need of financial planners 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 exist a potential growth in the wealth management industry which represents huge prospects of financial advisors in the growing economy like India. To conclude$ the a"ove research su"stantiates "oth financial and marketing feasi"ility for the
47

prospects of financial advisors in the Indian market.

Chapter =

Reco((endation

48

=# Reco((endations
(n studying the peculiarities of the wealth management industry and analy!ing the responses of the investors on their perception and expectation from a financial advisor$ the following points are recommended which a general financial advisor should consider while approaching the people. India is seeing a maturing financial environment. Interest rates have fallen and unlike in the past$ options to attract savings exist through a spate of financial products and services that have differing risk:growth and asset accretion propositions. It is "ecoming increasingly o"vious to people that their money$ in real terms$ would fall in value if they were to keep their money in the "ank. And hence the keenness to find out the right avenue that would help grows their savings or assets. 'hile this is "ecoming a universally undenia"le desire$ the fact is that some people don#t have the knowledge and inclination to understand the financial markets and others don#t have the time to follow them. This then leads to financial decisions "eing taken "y individuals "ased on either relationship hearsay or the sales call of a vendor.
=#1# 7nbiased $dvisory

Investment Advisory Services are in this "usiness of managing the assets of individuals and corporations. )owever$ the distinct model of services should ena"les the advisors to offer un"iased 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 fre-uent reviews of investment decisions made to ensure that portfolios are in line with what was planned. I#d like to add here that the financial advisory should not only "e un"iased with respect to an asset class "ut it should also "e independent of "iases across manufacturers within an asset class.

=#2# "nvest(ent in Foreign -ar3ets

A recent pioneering initiative is to facilitate for the clients investments in foreign markets$ adding to the advisory capa"ility that spreads across the widest range of asset classes in the country. (ne needs to "e cautious while investing and it is now important to hire a financial planner to plan your wealth "etter.

49

=#*# Certified Financial Planner

Financial planning is a new animal in the Indian market $ "ut this "east is already attracting a lot of

attention. The "ig thing to happen is the coming to India of the 4ertified Financial Planner 04FP1 mark$ owned "y the 6oard of Standards in the +S and licensed out to non%profit associations in D? countries$ including the +S$ 4anada$ Australia and the +=. ;eading financial playersJasset management companies$ "anks$ mutual funds and insurance companies$ forms these associations. Another player in this space is the *S/#s 4ertification of Financial &arkets 0*4F&1$ an arm of the *ational Stock /xchange that tests and certifies insurance and mutual fund agents. A third institution$ the Association of &utual Funds 0A&FI1$ is encouraging its agents to morph from distri"utors to advisors. Apart from the institutions$ some individuals and small companies have set up practice anticipating that the market will move from an ad%hoc approach to a planned one.
=#+# Financial Planning Should 1e 5ncouraged
Financial planning is the process of charting out the money course of your life. It#s like having

a financial roadmap that guides your every step till you pass on the "aton to the next generation. In other words$ it is a process in which an individual sets long%term financial goals through investments$ tax planning$ asset allocation$ risk management$ retirement planning and estate planning. &ost of us approach our financial lives like the disorgani!ed traveler who gets to his destination eventually and perhaps even enjoys the rough ride. 'e think we have a clear roadmap in mind$ "ut our financial lives are marked "y ad%hoc decisions and capitulation to the temptations of the flavors of the financial season. (ne of the myths regarding financial planning is that only rich individuals and )*Is can undertake this. This perception exists "ecause most players in the market target these people$ as they are very profita"le customers. )owever$ anyone can use financial planning. In fact$ individuals should use effective financial planning to "uild their wealth over the years.
=#:# $ areness of the 1enefits of Planning 5arly for Retire(ent

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. It#s called inflation. If you start planning for retirement early on$ you can "ridge the gap "etween what you have in your hand today and what you would like to have when you retire. If you "egin saving for retirement
50

early on in your life$ you can set aside smaller amounts. ,ou can also take on more risk "y investing larger amounts in e-uities i.e.$ stocks and e-uity funds. If you delay saving for retirement$ you will have to invest larger sums of money to save for the same amountM also the share of e-uity investments as a portion of your retirement savings will have to "e lower. The older you are when you start$ the more risk averse you will have to "e. ,our retirement portfolio will actually "e a mix of stocks$ de"t securities$ index funds and other money market instruments. This mix will change as you do$ moving increasingly toward low%risk guaranteed investments as you age. +nless planned well$ retirement phase will "e a downhill ride. People should come out of the concept of just keeping their money in "anks C should concentrate on doing financial planning to maximi!e their returns "y taking proper guidance from financial planner.

51

Appendix
Nuestionnaire 6i"liography

52

?75S2"O%%$"R5

%a(e ) Occupation

TTTTTTTTTTTTTTTTTTTTTTTTTTT

$ge) TTTTTTTTTTTTT SeA ) HHHHHHHHHHHH City) TTTTTTTTTTTTT

) HHHHHHHHHHHHHHHHHHHHHHHHHHH

$nnual "nco(e) TTTTTTTTTTTTTTTTTTTTTTTTTTT

D. 'hat is your o"jective "ehind investmentsR 0a1 Safety of 4apital 0"1 5etirement 0c1 6eating Inflation 0d1 Tax &inimi!ation 0e1 ;i-uidity 0f1 3rowth of 4apital % 5eturns

0g1 (thers 0please specify1 TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT A. Since when are you investing in financial instrumentsR 0a1 ;ess than 9 months 0"1 9 months J @ months 0c1 @ months J ? months 0d1 ? months J DA months 0e1 &ore than DA months 0f1 others 0please specify1 TTTTTTTTTTTTTT 9. o you plan your investmentsR

0a1 ,es 0"1 *o$ why TTTTTTTTTTTTTTTTTTTTTTTTT I. 'hat is your practice on saving moneyR 0a1 I don#t "elieve in saving. 0"1 I#d like to save$ "ut my expenses C financial commitments do not permit me. 0c1 I try to save whenever C wherever possi"le. 0d1 I always save some percentage of my take%home salary without exception. 0e1 (thers 0please specify1 TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT F. )ow much thought have you given to saving for retirementR 0a1 Kery little 0"1 Some 0c1 A lot 0d1 *one

53

@. 'hen do you prefer one should start planning for retirementR 0a1 +nder 9E 0"1 9D J IE 0c1 ID J FE 0d1 A"ove FE H. 'hat do you feel is considered to "e the > f*ndamentally &afe form of InvestmentR 0a1 6ank deposits 0"1 Property:;and 0c1 Postal deposits 0d1 3old 0e1 ;ife insurance policies 0f1 3overnment "onds 0g1 &utual funds 0h1 /-uity:Shares 0i1 (thers 0please specify1 TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT ?. )ow do you take financial decisionsR 0a1 Independently 0"1 Advise from friends : relatives 0c1 6roker 0d1 Advice from a 4hartered Accountant 0e1 Advise from a 6ank 0f1 Financial Advisors 0g1 (thers 0please specify1 TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT G. o you have any Insurance PolicyR

0a1 ,es 0"1 *o DE. If yes$ why did you "uy an Insurance PolicyR 0a1 As a means of saving 0"1 As a means of saving tax 0c1 For security against death 0d1 others 0please specify1 TTTTTTTTTTTTTT DD. Are you aware a"out the concept of Financial AdvisorsR 0a1 ,es 0"1 *o DA. o you currently avail financial advisor services:private "anking servicesR

0a1 ,es 0"1 *o$ why TTTTTTTTTTTTTTTTTTTTTTTTT

54

D9. If yes$ from whomR 0a1 4iti"ank 0"1 ) F4 6ank 0c1 Allegro 4apital Advisors 0d1 6ajaj 4apital 0e1 )S64 6ank 0f1 ,/S 6ank 0g1 5eligare 0h1 others 0please specify1 TTTTTTTTTTTTTT DI. 'hat are the products you are getting from your service providerR 0a1 &utual Funds 0"1 Initial Pu"lic (ffer 0IP(1 0c1 Secondary &arket 0d1 Post (ffice Schemes: e"t 0e1 Insurance 0f1 5eal /state:Property 0g1 Tax Planning 0h1 ;oans 0i1 Administrative Services 0j1 3old 0k1 Art:Paintings 0l1 others 0please specify1 TTTTTTTTTTTTTT DF. 'hich all areas you think should "e a part of Financial PlanningR TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT

(Thank You for your Cooperation & Time)

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1"1L"O@R$P94
The following companies and association#s we" sites were referred while collecting Information used in the research. Referred 1oo3s) G Uain$ P.=. =han. &., 0AEEI1$ FI*A*4IA; &A*A3/&/*T$ Tata &c 3raw%)ill Pu"lications$ Page DH.91 to DH.D9 =othari$ 4.5 0AEEF1$ 5/S/A54) &/T)( (;(3,$ *ew Age International Pu"lications$ Page A to A@. Pandian$ Punithavathy 0AEEF1$ S/4+5IT, A*A;,SIS A* P(5TF(;I( &A*A3/&/*T$ Kikas Pu"lications$ Page 9H to HE. Referred Iournals and (agaJines (utlook &oney$ DF August AEE@ (utlook &oney$ 9D August AEE@ (utlook &oney$ 9D Uuly AEE@ Investors India$ Uuly AEE@ Investors India$ August AEE@ Investment &onitor$ Uune AEE@ alal Street$ August AEE@ Allegro 4apital Advisors Pvt ;td J &arket Activity Referred ,ebsites) G < http.::www.yes"ank.in < http.::www.citi"ank.co.in: < http.::www.uti"ank.com: < http.::www.hs"c.co.in < http.::www.religarewealthcare.com < http.::www.hdfc"ank.com < http.::www."ajajcapital.com < http.::www.alllegroadvisors.com

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