PROJECT REPORT

ON

Wealth Management Sector

An Analysis Of Existing
And
Potential Market

AT

AXIS BANK LTD.

AHEMDABAD
Submitted By:
Ankit kanungo (MBA-III SEM), In Partial Fulfillment for Degree of
Master of Business Administration during the year 2008-09

AMITY BUSINESS SCHOOL, AMITY UNIVERSITY

RAJASTAN, JAIPUR
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ACKNOWLEDGEMENT

It is a matter of great satisfaction and pleasure to

present this report on Analysis of Wealth Management
taking Axis bank as basis. I take this opportunity to owe my
thanks to all those involved in my training.

This project report could not have been completed

without the guidance of our COORDINATOR - MBA, Dr.
SHEELA SRIVASTVA & project guide Dr. AMIT DIWIDI.
Their timely help & encouragement helped me to complete
this project successfully.

I thank Mrs. VINEET AGRAWAL (VICE PRESIDENT-

HR) for giving me opportunity to work at AXiS BANK, as a
FINANCE TRAINEE.

I am thankful to Ms. PAMPA GHOSH (MANAGER –

WEALTH MANAGEMENT) and MR. SAURABH TRIPATHI
(DGM, WEALTH MANAGEMENT) for their encouragement and
able guidance at every stage of my training work.

I express my gratitude towards staff of WEALTH

MANAGEMENT DEPARTMENT -AXIS BANK, those who
have helped me directly or indirectly in completing the
training.
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WEALTH MANAGEMENT
SECTOR

AN ANALYSIS

OF

EXISTING AND POTENTIAL

MARKET
COMPANY GUIDE : FACULTY
GUIDE :

Ms. Pampa Ghosh Dr. Amit Diwidi

(Manager) (Prof.)

Wealth Management Department Amity Business

School
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AXIS BANK (DELHI) Jaipur

INDEX

No. Particulars Page No

1 Executive Summary

2 Objective & Scope of Project

3 Company Profile

4 Theoretical Background**

5 Projections

6 Bibliography
 6

**
1. INTRODUCTION

2. CONCEPT OF WEALTH MANAGEMENT

• Wealth Management Range

• Key Elements of Wealth Management Services
• Key Challenge Area

3 Solution Framework

4. Wealth Management – An Emerging Sector

5. Core Elements of Wealth Management Services

• Packaged at various levels

 Advisory
 Investment Processing (transaction oriented)
 Custody, Safekeeping and Asset Servicing
 End-to-end Investment Lifecycle Management

• Key function areas

 Financial Planning
 7

 Client Profiling
 Investment Objective

 Portfolio Strategy Definition / Asset Allocation

 Defining Portfolio Strategies and Portfolio Modeling

 Determination of Portfolio Constituents and Allocation

of Assets

 Strategy Implementation

 Portfolio Management

 Portfolio Administration

 Performance Evaluation and Analytics

 Strategy Review and Alignment

 Recalibration of Portfolio Strategy

 Rebalancing, Reallocation and Divestment of Assets

6. Key Challenge Areas

• Highly Personalized and Customized Services.

• Personal relationship driving the business.
• Evolving Client Profile.
• Client Involvement Level.
• Passion Investment (Philanthropy and Social Responsibility).
• Limited Leveraging Capabilities of Technology (as an enabler).
• Technical Architecture and Technology Investment.
• Intricate Knowledge of Cross-functional Domain.
 8

7. Solution Framework

• Quality of Service Level

• Universal Service Offering
• Investment in People Processes
• Price not a True Differentiator
• Unconventional Delivery Channel and Communication
• Flexibility of Technical Architecture
 9

8. SERVICES PROVIDED BY WEALTH MANAGEMENT

INSTITUTIONS

• Custodian Services
• Trust Services
• Retirement Plan Services

9. ADVANTAGES AND LIMITATIONS

10. Consumer Point Of View :

Wealth Management

• PMS vs Wealth manager and fund manager.

• Is PMS for you?
• How to choose a PMS.
• Investment philosophy.
• Scheme benchmarks.
• Minimum investment.
• Returns.
• Cost structure.
• Frequency of disclosure.
• Broking house.
• Assets under management (AUM).

11. CONCEPT OF ASSET CLASSES

• Asset Mix
•
• List Of Different Asset Class

 Fixed Deposits
 Merits and Demerits
 Interest rates on FDs
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 Effective Return

 MUTUAL FUND

 Open-end fund
 Exchange-traded funds
 Equity funds
 Capitalization
 Bond funds
 Money market funds
 Funds of funds
 Hedge funds

 Equity investment

 Direct holdings and pooled funds

 Commodities Market
 ART FUND

 Diversified portfolio
 Tie-ups with galleries
 REAL ESTATE FUND
 Insurance Product

 General Insurance
 Unit Linked Insurance Plan (ULIP)

 Structured Product

 Composition
 Risks

 GOLD

 Factors influencing the gold price

 gold becomes desirable in times of
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 Bank failures
 Low or negative real interest rates
 War, invasion, looting, crisis

 Currency
 Portfolio composition of currency

12. Companies providing Wealth management services

• Kotak securities

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILOSPHY
• Morgan Stanley

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILOSPHY

• Moti Lal Oswal

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILOSOPHY

• Religare Wealth Management

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 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILOSOPHY

• Standard chartered

 INTRODUCTION

 PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE
 INVESTMENT PHILOSPHY

• Abn Amro Wealth Management

 INTRODUCTION

 PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSPHY

• HSBC Financial Planning Services

 PRODUCTS

 ASSET CLASSES USED

 13

 ASSET SIZE

 INVESTMENT PHILOSOPHY
 14

• Citi Bank

 INTRODUCTION
 PRODUCTS
 ASSET SIZE
 ASSET CLASSES USED
 INVESTMENT PHILSPOHY

• ICICI Wealth Management

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILSPOHY

13. AXIS BANK & WEALTH MANAGEMENT

• Procedure for entertaining a client in AXIS BANK

• Coustmer Profiling at Axis Bank

 Upto 30 years of age

 30-45 years of age
 45-60 years of age
 over 60 years

14. WEALTH MANAGEMENT : INDIAN CONCERN

• Position of India in Wealth Management

• Risk aversion of Indian customers
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15. MIDDLE EAST & WEALTH MANAGEMENT

16. WEALTH MANAGEMENT ON GLOBAL PRESPECTIVE

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EXECUTIVE SUMMARY
Axis Bank Wealth Management provides discretionary wealth
management service, in which wealth managers give
recommendations to customers and invest according to
customer discretion.
My Project is the study of Wealth Management Sector,An
Analysis Of Existing And Potential Market.

The study was conducted at the main branch of AXIS

BANK,CP,NEW DELHI.
The project was of 6 weeks duration.
During the project I had taken the guidance of Wealth
managers & staff to collect the data, & also made use of
Company’s various reports. The data collected were then
compiled, tabulated and analyzed.

Apart from objectives, Some of the points which is considered in this

topic to make project report more comprehend are :-

1. What a customer expects from a wealth management service

provider.

2. Solution framework for wealth management.

3. Key Challenge Areas.

4. Core Elements of Wealth Management Services.

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OBJECTIVES
1) Through the past results, to identify the potential of wealth
management sector.
2) Understanding company’s procedure in wealth management
department.
3) To know the comparative position of the companies offering
wealth management services.
4) To have a general notion on different asset classes available
in financial market.
5) To have a conceptualized view on wealth mangagment
services.
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COMPANY PROFILE

Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the
Unit Trust of India (UTI - I), Life Insurance Corporation of India
(LIC) and General Insurance Corporation of India (GIC) and
other four PSU insurance companies, i.e. National Insurance
Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance
Company Ltd.
The Bank today is capitalized to the extent of Rs. 358.56 crores
with the public holding (other than promoters) at 57.60%.
The Bank’s Registered Office is at Ahmedabad and its Central
Office is located at Mumbai. Presently, the Bank has a very
wide network of more than 701 branch offices and Extension
Counters. The Bank has a network of over 2854 ATMs providing
24 hrs a day banking convenience to its customers. This is one
of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking
and is committed to adopting the best industry practices
internationally in order to achieve excellence.
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Theoretical Background
INTRODUCTION

The term Wealth management also now a days having very

importance. So many Banking companies are engaged in the business
of Wealth management. The premier insurance industry is now
booming because so many bankers are also adopting and playing safe
in the business of insurance the term called is Bancassurance. Now a
days Wealth Management has very craze in the business world. In a
survey it was found that India had 100,000 miolliners day end of year
2006 is now grow up by 21% from a year earlier (Asia pacific Wealth
report).

Wealth management services area in financial sector has been

witnessing more attention during last couple of years.
Capgemini Merrill Lynch Wealth Report 2007 cites number of
HNWIs globally to be around 9.5 million with wealth held by
them totaling to US$37.2 trillion in year 2006. Value of wealth
held by HNWIs represents an increase of around 11.4% since
2005.
Considering long-term high value business proposition,
number of banks and niche players has started offering full
range of wealth management services targeted to HNWIs and
emerging affluents.
While growing volume of premium services to affluent clients
becomes the key driver for most of the service provider firms,
many unique elements inherent to wealth management
services requires completely different service offering model
than the existing model for transactional services. Greatly
accustomed in offering commoditized financial services so far,
demand of unconventional form of service model poses a big
challenge in charting growth path for these wealth
management firms.

CONCEPT OF WEALTH MANAGEMENT

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The term Wealth management formed with two words Wealth &
Management. The Meaning of Management They have already seen in
the steering introduction. The meaning of Wealth is – Funds, Assets,
investments and cash it means the term Wealth management deft with
funds Asset, instrument, cash and any other item of similar nature.
While defining Wealth Management They have to think in planned
manner. “Wealth Management is an all inclusive set of strategies that
aims to grow, manage, protect and distribute assets in a much
planned systematic and integrated manner”.
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WEALTH MANAGEMENT RANGE

The Indian market has been segmented by Wealth management

service providers into five categories, namely:

• Ultra-high net worth, or Ultra-HNW (in excess of US$30 million), will have a
total population of 10,500 households by 2012.
• Super high net worth (between US$10 and $30 million) will have a total
population of 42,000 households by 2012.
• High net worth (between US$1 million and $10 million) will have a total
population of 320,000 by 2012.
• Super affluent (between US$125,000 and $1 million) will have a total population
of 350,000 households by 2012.
• Mass affluent (between US$25,000 and $125,000) will have a total population of
1.8 million households by 2012.

Mass market (between US$5,000 and $25,000) will have a total

population of 39 million households by 2012.

The range of Wealth management can be expressed by this exhibit

chart.
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CAREER
STUDENT START OF CAREER RETIREMENT
ESTABLISHED
* Deposit based comfort * Comfort A/c with credit limit * Premium A/c * Premium A/c
A/c
* Gold Card * Platinum Card
Liquidity * Credit cards * Platinum Card
Management * Overnight money A/c* Overnight money A/c
(Cash Mgt) * Money Market & Fixed Income Fund* Money Market & Fixed Income Fund
* Near Money Market Fund * Near Money Market Fund
* ZINS Plus * ZINS Plus
* Special Investments
* Top portfolio* Top portfolio* Top portfolio
Wealth
* Flagship portfolio* Flagship portfolio* Flagship portfolio
Formation
* Titan portfolio * Titan portfolio* Titan portfolio
(Savings Plans)
* Capital formation benefit funds
* Absolute Return Portfolio
Wealth * Holding and Private Equities
Optimization * Modular Wealth Management
(Lump sum * Individual Wealth Management
Investment) * Premium Portfolio
* Titan Portfolio

Key Elements of Wealth Management Services

Wealth management services involve fiduciary responsibilities
in providing professional investment advice and investment
management services to a client. Depending on the mandate of
the services given to the Wealth Manager, wealth management
services could be packaged at various levels:
a) Advisory
b) Investment Processing (transaction oriented)
c) Custody, Safekeeping and Asset Servicing
d) End-to-end Investment Lifecycle Management

Wealth management services comprises of following key

function areas of:
(a) Financial Planning
(b) Portfolio Strategy Definition/ Asset Allocation / Strategy
Implementation
 24

© Portfolio Management –Administration, Performance Evaluation

and Analytics
(d) Strategy Review and Modification.
25
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Key Challenge Area

Wealth management firms face many challenges in formulating
winning services offering meeting the client needs. Some of
key challenges faced by wealth management firms are:
1. Highly Personalized and Customized Services
2. Personal relationship driving the business
3. Evolving Client Profile
4. Client Involvement Level
5. Passion Investment (Philanthropy and Social Responsibility)
6. Limited Leveraging Capabilities of Technology(as an enabler)
7. Technical Architecture and Technology Investment
8. Intricate Knowledge of Cross-functional Domain

Solution Frame work

A HNWI client expects exclusiveness in services and key to
success for a firm lies in offering exclusiveness in services
delivery (high quality services on most personalized basis),
going beyond client expectations.
A solution framework with considered inclusion of following
key elements would help firms in meeting and exceeding client
needs towards sustainable business growth:
1. Quality of Service Level: Highly focused around client needs,
a broad framework of service offering would be revolving
around: Anticipate, Analyze, Advice, Act and Monitor cycle.

2. Universal Service Offering

3. Investment in People Processes
4. Price not a True Differentiator
5. Unconventional Delivery Channel and Communication

6. Flexibility of Technical Architecture: Against the background

of lack of clarity on business model and involved process, A
loosely oriented technical architecture with optionality and mix
of Build – Buy – Integrate components would be considered as
a good beginning point.
To meet the information technology requirements, a firm has
several alternatives (or combination of alternatives) to
consider:
• Integrated solution approach: Developing in-house applications to meet end-to-end
new business requirements.
• Service Bureau /ASP Model: Information technology service providers offering
integrated end-to-end processing infrastructure and services including core of
business processes of wealth management.
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• Stand-alone commercial software product/solutions: Pre-packaged solutions that can

be focused to specific part of services or provide comprehensive end-to-end
processing.
 28

To provide enough resilience and high business relevance, any

of the considered option and associated technical structure
should keep due provisions for the following key elements:
• Rule based processing to manage complex business rules and service definitions.
• Client profile / data management to cater a profile driven solution offering.
• Complex decision support and client oriented analytics.
• Flexibility to incorporate manual processing interfaces in applications.
 29

Wealth Management – An Emerging Sector

Wealth management services area in financial sector, hitherto
used to be the preserve of some top multinational banks and
financial firms- offering exclusive services to a select few, has
been witnessing more attention during last couple of years.
A booming economy, rising stock prices and an increase in
income and spending power have brought sharp focus on this
sector. With an increasing population of High Net worth
Individuals (HNWIs)1, the unsaid tagline of earlier days -
“Don’t call us. We’ll call you (if you are that wealthy!)” seems
to be completed altered in recent times. Considering long-term
high value business proposition, number of banks, financial
firms and niche players has started offering full range of
wealth management services targeted to HNWIs and emerging
affluents.
As per recently published Capgemini Merrill Lynch Wealth
Report 2007, number of HNWIs around the world and value of
their assets has been continuously rising. Number of HNWIs
globally is estimated to be around 9.5 million in year 2006, an
increase of over 8.35% over previous year. HNWI wealth totals
US$37.2 trillion, representing an increase of around 11.4%
since 2005. As per report, number of HNWIs in India is
increasingly growing – at a rate higher than other region of
world. Number of HNWIs in India is estimated to be around
100,000 in year 2006 - an increase of over 20.5% over previous
year. Though, in absolute terms the above number appears
pretty miniscule (if we compare that with the number of retail
investors in India2), however, in terms of value it really makes
a really huge sum of serviceable investment3.
While growing volume of premium services to affluent clients
becomes the key driver for most of the service provider firms,
many unique elements inherent to wealth management
services requires completely different service offering model
than the existing model for transactional services. To meet the
client service expectations accurately, servicing model and
framework has to be deeply oriented with high level of client
satisfaction. It is not a surprise that many of successful firms
in wealth management sector draw lessons from successful
service leaders from hospitality, entertainment and retailing
industries, to learn the trick of enhanced client satisfaction.
Greatly accustomed in offering commoditized financial services
so far, demand of unconventional form of service model poses
a big challenge in charting growth path for these wealth
management firms.
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Core Elements of Wealth Management

Services

In most basic sense, wealth management services involve fiduciary

responsibilities in providing professional investment advice and
investment management services to Institutions, funds
(Pension/mutual/Hedge), corporations, trusts as well as HNWIs. In the
present context of our discussion,we would keep our focus limited to
HNWIs.

Some of analogous terms used for wealth management could be

considered as Portfolio Management, Investment Management and
many times Fund Management or Asset Management.

• Depending on the mandate of the services given to the Wealth Manager, wealth
management services could be Packaged at various levels

a) Advisory
Wealth manger’s role is limited to the extent of providing guidance on investment
/ financial planning and tax advisory, based on client profile. Investment decisions
are solely taken by the client, as per his /her own judgment.

b) Investment Processing (transaction oriented)

Client engages wealth manager to execute specific transaction or set of
transactions. Investment planning, decision and further management remain
vested with the client.
c) Custody, Safekeeping and Asset Servicing
Client is responsible for investment planning, decision and execution. Wealth
manager is entrusted with management, administration and oversight of
investment process.
d) End-to-end Investment Lifecycle Management
Wealth manager owns the whole gamut of investment planning, decision,
execution and management, on behalf of the client. He is mandated to make
financial planning, implement investment decisions and manage the investment
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throughout its life .Wealth management services comprises of following Key

function areas :
a) Financial Planning
b) Portfolio Strategy Definition / Asset Allocation
c) Strategy Implementation
d) Portfolio Management
e) Strategy Review and Alignment

a) Financial Planning

 Client Profiling

Client profiling takes in account multitude of behavioural,

demographic and investment characteristics of a client that
would determine each client’s wealth management
requirements. Some of key characteristics to be evaluated for
defining client’s investment objective are:
• Current and future Income level
• Family and life events
• Risk appetite / tolerance
• Taxability status
• Investment horizon
• Asset Preference /restriction
• Cash flow expectations
• Religious belief (non investment in sin sector like - alcohol, tobacco, gambling firms,
or compliant with Sharia laws)
• Behavioural History (Pattern of past investment decisions)
• Level of client’s engagement in investment management (active / passive)
• Present investment holding and asset mix
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 Investment Objective

Based on the client profile, investment expectations and

financial goals of the client could be clearly outlined. Defining
investment objectives helps to identify investment options to
be considered for evaluation. Investment objective for most of
the investors could be generally considered amongst the
following:
• Current Income
• Growth (Capital Appreciation)
• Tax Efficiency (Tax Harvesting)
• Capital Preservation (often preferred by elderly people to make sure they don’t
outlive their money.)

b)Portfolio Strategy Definition / Asset Allocation

Defining Portfolio Strategies and Portfolio Modeling

After establishing investment objectives, a broad framework
for harnessing possible investment opportunities is
formulated. This framework would factor for risk-return trade-
off of considered options, investment horizon and provide a
clear blueprint for investment direction.
Investment strategy helps in forming broad level envisioning
of asset class (Securities, Forex, Commodity, Real State,
Reference and Indices, Art/Antique and Lifestyle Assets (Car,
Boat,Aircraft)), market, geography, sector and industry. Each
of these asset classes is to be comprehensively evaluated for
inclusion in portfolio model, in view of defined investment
objectives.
While defining the strategy, consideration of client preference
or avoidance for specific asset class, risk tolerance, religious
beliefs is the key element, which would come into picture.
Thus, for a client with a belief of avoidance of investment in
sin industries (alcohol, tobacco, gambling etc.) is to be duly
taken care of. Likewise, for a client looking for Sharia-
compliant investment, strategy formulation should consider
investment options meeting with the client expectations.

Determination of Portfolio Constituents and Allocation

of Assets
 33

Guided with the investment strategy, constituents in portfolio

model are determined, which would directly and efficiently
contribute towards client’s investment objectives. Thus, a
broad level investment guidance of – “investment in fixed
income in emerging market” would further determine
classification within Fixed Income such as Govt. or corporate
bonds, fixed or variable rate bonds, Long or short maturity
bonds, Deep discounted or Par bonds, Asset backed or other
debt variants. Return profile, risk sensitivity and co-relation of
constituents within portfolio model would help to
determine the size (weightage) of each individual constituent
in the portfolio.

c) Strategy Implementation
Having decided the portfolio constituents and its composition,
transactions to acquire specific instruments and identified
asset class is initiated. As acquisition cost would be having
bearing on overall performance of the portfolio, many times
process of asset acquisition may be spread over a period of
time to take care of market movement and acquire the asset at
favourable price range.
d) Portfolio Management

Portfolio Administration
Portfolio Administration involves handling of investment
processes and asset servicing. This would also require tax
management, portfolio accounting, fee administration, client
reporting, document management and general administration
relating with portfolio and client. This function would involve
back office administration and custodial services to manage
transaction processes (trading and settlement) - interfacing
with brokers/dealers/agents, Fund managers, Custodians, Cash
Agent and many other market intermediaries.

Performance Evaluation and Analytics

Performance evaluation of the portfolio is an ongoing process.
Portfolio return is continuously monitored and analyzed with
respect to defined portfolio objectives. Analysis dimension
could be varied – simple and complex. These may include -
absolute return, relative return (in comparison to chosen
benchmark), trend, pattern, cost impact, tax impact,
concentration, lost opportunity and other form of sensitivity
and what-if analysis. Any deviation of portfolio performance
observed during performance evaluation would lead to
strategy review and any possible alignment of portfolio strategy.
 34

e)Strategy Review and Alignment

Recalibration of Portfolio Strategy

Based on performance evaluation and future outlook of the
investment, portfolio strategy is evaluated on periodic basis.
To keep it aligned with the defined investment objectives,
portfolio strategy is suitably re-calibrated from time to time.
Many times, review of portfolio strategy would be necessitated
due to change in client profile or expectations.

Rebalancing, Reallocation and Divestment of Assets

Any re-calibration of strategy and consequent change in
portfolio model would require rebalancing of the assets in
portfolio. This would be achieved through rebalancing the
asset
(divesting over-allocated part and acquiring under allocated),
relocation (from one sector the other or from one instrument
to other instrument in the same class) or complete divestment.
 35

Key Challenge Areas

While immense business potentiality of this emerging sector is
a driving point for most of the firms, they face many
challenges in formulating winning services offering meeting
the client needs. In the following section, we would briefly take
a look on the key challenges area in the present context.
• Highly Personalized and Customized Services

Unlike other stream of financial services, mostly being

transactional / commoditized in nature, wealth management
services require client specific solution and service offering.
No one solution exactly meets the needs of other client. In a
situation of highly personalized and customized nature of
service offering, developing any form of generic service model
does not support growth of the business.
• Personal relationship driving the business

To meet client expectation of personal attention, mode of

communication in wealth management services tends to be
highly personalized. Thus, the conventional grids of
communication, such as call centre, data centre does not fit
well. Success of wealth management services heavily draws on
personal interaction with the dedicated relationship manager,
who takes care of whole investment management lifecycle for
bunch of clients on one-to-one basis. This essentially requires
service firm to invest heavily in human processes to groom and
retain a team on competent relationship managers with cross
functional skills.
• Evolving Client Profile

The biggest challenge in providing wealth management service

offering is to factor and reckon the evolving nature of client
profile, in terms of investment objective, time horizon, risk
appetite and so on. Thus, a service model developed for a
particular client cannot remain static over a period of time.
Any
service model has to be flexible enough to consider the
dynamic nature of client profile and expectations arising out of
it.
• Client Involvement Level
 36

The conventional adage – the more money you have, more

effort is needed to manage it – proves to be otherwise in case
of HNWIs. Generally, client involvement in managing the
finance remains on the lower side. This brings onus of
managing the whole gamut of investment and due
performance single-handedly on the shoulders of investment
manager.
 37

• Passion Investment (Philanthropy and Social Responsibility)

In the recent years a trend has been observed that bulk of

investments by HNWIs has been directed towards passion
investments (art, antique, jewellery, coins, unique assets,
luxury), philanthropy and social/community causes.
As per World Wealth report, 11% of HNW investors worldwide
contributed to philanthropic causes with a contribution over
7% of their wealth in year 2006. Ultra-HNWIs contribution was
even more - 17% of Ultra-HNW investors that gave to
philanthropy contributed over 10% of their wealth. In total,
this equates to more than US$285 billion globally. Against this
backdrop, new breed of HNWIs expect to strategically manage
the wealth and personal resources allocated to philanthropy
purpose, in order to maximize its impact. This demands a
relationship manager not just to be a passive financial advisor
rather a passionate partner sharing interest and inclination of
the associated client.
• Limited Leveraging Capabilities of Technology (as an enabler)

In the recent times, we have witnessed technology a key

enabler to help business to expand its market reach with
reduced cost of services offering. Online banking and online
trading/brokerage services are the best examples in this
regard. Technology leveraging has helped services firm to
achieve universal proliferation of market with substantially
reducing transaction cost. As business rules and service
definitions to guide the applications tends to be quite
composite in wealth management services, leveraging the
capabilities of technology to meet the business requirement
may not be highly feasible in the initial years.
• Technical Architecture and Technology Investment

As business architecture is still evolving, a proven basis of

resilient technical architecture and framework to support the
emerging business greatly remains missing. In absence of this
framework, any investment commitment towards application
development / system implementation would be fraught with
severe risk.
• Intricate Knowledge of Cross-functional Domain

By very nature of wealth management, it not just involves

matters of plain vanilla finance but has intricate relationship
with many elements of domestic / international law, taxation
and regulatory norms. In order to provide sound investment
 38

guidance, a relationship manager is required to have intricate

knowledge of domestic/cross-border finance, accounting, legal
and taxation subjects.
 39

Solution Framework
Generic services offering model is going to draw big blank in
case of wealth management services. A HNWI client expects
exclusiveness in services in a normal manner. In highly
competitive market, key to success for a firm lies in offering
exclusiveness in services delivery (high quality services on
most personalized basis), going beyond the client
expectations.
A solution framework with considered inclusion of following
key elements would help firms in meeting and exceeding client
needs towards sustainable business growth.
• Quality of Service Level

Quality of service level provided by the service provider firm

would the key determinant of growth and success in client
acquisition, client satisfaction and client retention aspects.
In a sense, service offering could be developed in the form of
partnership with the client based on trust and integrity, where
the relationship manager remains highly responsive to client
sensitivities and expectations.
Without over-emphasizing, a satisfied client would provide
multitude of opportunities of growth of business – through
deepening the relationship, direct / indirect referencing as well
as cross selling of products. In the other situation of deficiency
in service level, he would not hesitate to move the business
to another firm. This keeps strong emphasis on continued
engagement with the client on the aspects of client
expectation and servicing, rather than showing extra attention
only during the period of client acquisition. Focused around
client needs, a broad framework of service offering during
whole lifecycle of client investment management would be
revolving around: Anticipate, Analyze, Advice, Act and Monitor
cycle.

.
40
 41

• Universal Service Offering

To meet the client needs in holistic manner, product and

service offering range of the firm should be wide enough to
cover the investment spectrum across its lifecycle. In an ideal
situation, a client would expect to deal with a single firm to
get complete range of investment management services.
However, for various business considerations of the service
provider firm, in many situations it may not be a viable
proposition to offer those services. While universal service
offering with assortment of services under single umbrella is
not attainable in house, it could be achieved through active
partnership and affiliation. But, due consideration is required
that quality of service level provided by partners/affiliates
does not get compromised in any manner. Any shortcoming in
service quality, even if caused by partner/affiliate’s services,
would be ultimately impairing client satisfaction towards the
firm.
• Investment in People Processes
As relationship manager remains the face of the firm to a
client, success of the firm would be greatly dependent on the
skills, drive and enthusiasm of relationship managers (to take
an extra mile), while bonding and dealing with any of client
issues. This aspect is more challenging than as it appears. This
necessitates transformation of organizational philosophy
towards its people and people processes contributing to
business success. Firms would be required to invest heavily in
human processes to attract, groom and retain a motivated
team of relationship managers, who will make the real
difference between winning and losing the game.
• Price not a True Differentiator

Pricing as a key differentiator to distinct the service offering

from one firm to other may not be highly relevant in case of
wealth management services. Focused on performance and
quality of service, pricing in isolation will not make much
meaning to service seeking clients. Client would always value
the pricing from the quality of services received. He will
certainly not mind paying extra, if he finds services offered
to him meeting and exceeding his expectations.
• Unconventional Delivery Channel and Communication

Delivery channel for service content and mode of

communication has to be greatly customized – aligned with the
client-desired vehicles. This would require a process of
 42

continuous re-inventing and re-defining the grid of delivery

and communication channels to meet client expectations.
Impact of technological advancements and its interplay on
service delivery and communication method would certainly be
an
equally challenging aspect to be factored in, while designing
such strategies.
 43

• Flexibility of Technical Architecture

While business potential appears to be quite high, existing

business architecture still does not provide any sound basis to
formulate technical roadmap. Added to that, dynamic
characteristics of client profile bring an increased challenge in
drawing a firm implementation blueprint.
In the given situation, any big-bang commitment towards
technical implementation plan would not be a wise idea. A
prudent approach would be to get started on modular basis
with progressive integration of functional components in order
of its functional significance. Gaining insight and confidence
around the business processes, this could be gradually scaled
over the period of time.
To meet the information technology requirements, a firm has
several alternatives (or combination of
alternatives) to consider:
a) Integrated solution approach: Developing in-house
applications to meet end-to-end new business requirements.
These applications are based on existing technology
architecture of the firm and are closely integrated with the
existing service models. It would be a least preferred choice in
the current situation, on count of cost, time, lack of clarity and
complexity of solution.
b) Service Bureau /ASP Model: A recent trend has been
witnessed in the solution provider’s landscape. Many of
information techno service providers have come out with novel
solution for investment management / investment processing
platform in the form of service bureau / ASP. This platform
provides integrated end-to-end processing infrastructure and
services including core of business processes of wealth
management.
On the part of a wealth management firm, paying agreed
charges to service bureau provider, option of service bureau
completely eliminates the requirement of ongoing resource
commitment and cost of maintaining information technology
infrastructure. While total cost of owning may be the key
motivating point for a wealth management firm to adopt
service bureau model, the key consideration of providing high
quality of service level with enhanced responsiveness may not
be adequately answered.
c) Stand-alone commercial software product/solutions: Pre-
packaged solutions that can be focused to specific part of
services or provide comprehensive end-to-end processing.
These can be
 44

deployed independently or could be integrated with existing

systems. Cost, customization and integration difficulties would
be the challenging points.
A loosely oriented technical architecture with optionality and
mix of Build – Buy – Integrate components would be considered
as a good beginning point. To provide enough resilience and
high business relevance, any of the considered option and
associated structure should keep due provisions for the
following key elements:
• Considering the complexity of business processes and involved business rules, rule
based processing would be the core of processing.
• Client profile acquires many new dimensions with plethora of attributes. Client data
is required to be appropriately managed (aggregate / segregate) to build a profile
driven solution offering.
• Decision support and client oriented analytics acquire more importance.
• Applications should provide adequate flexibility to incorporate manual processing
interfaces.
 45

SERVICES PROVIDED BY WEALTH

MANAGEMENT INSTITUTIONS

(1) Custodian Services

(A) Securities Safekeeping

(B) Income collection from Securities
(C) Settlement of Securities trades as directed
(D) Payment of fund when directed
(E) Timely settlement delivery

(2) Trust Services

(A) Charitable Trust

(B) Revocable Trust
(C) Irrevocable life Insurance Trust
(D) Special Need Trust
(E) Institutional Trust

(3) Retirement Plan Services

(A) IRA’s Custodian Or Trustee

(B) Defined Benefit Plans
(C) Defined Contribution Plans
46
47
 48

Wealth Management Practice Orientation Overview

Transactors:
• Product Expert: Handles high-volume transactions involving sophisticated products
or asset classes, such as foreign exchange derivatives.
• Investment Broker: Handles transactions involving basic asset classes, such as
equities, fixed income and options.

Investment Managers:
• Investment Advisor: Offers strategic investment planning, as well as playing a hands-
on role in constructing, reviewing and rebalancing client portfolios.
• Relationship Manager: Establishes and nurtures client relationships, delegating
portfolio management to internal or external managers.

Wealth Planners:
• Wealth Planner: Offers holistic advice in accordance with client’s finances and short-
/long-term goals, such as real estate, retirement and generational wealth transfer.
• Personal CFO: Aspires to provide quasi family-office services, often acting in a lead
discretionary role coordinating with the client’s other trusted advisors.
 49

The significance of these practice-model categories is that

each reflects a different advisory approach, borne of a
different perspective. While some firms claim to have a single
practice orientation, many actually use multiple models in and
across regions—and often leverage different models within
their core markets to capitalize on the strengths of individual
advisors. As they move into new markets, firms can create or
exacerbate friction among the different advisory approaches
they use. Importantly, practice orientations need not be
mutually exclusive, but the mix of intra-firm practice models
does need to be consciously managed.
 50

ADVANTAGES AND LIMITATIONS

ADVANTAGES: The following are the advantages of

Wealth management concept.

1) Helpful In Tax Planning : The Wealth management

professional always shows the good path to the customers and
provide the service of tax planning. How to minimize the tax
and save more money?

2) Helpful In Selection of Investment Strategy: Another

advantage from the customer point of view is with the help of
WM Professional the customer can easily know the investment
strategy and analyze risk and return.

3) Helpful In Estate Management: With the help of Wealth

management professional They can also manage their estate.
Estate management is a task to provide objective administration
of their funds tailored to aim in responsible distribution and
protection of their overall estate.

4) Helpful in forward looking: They can say planning, that

recognizes as Their estate grows and changes occurs They
require some team of professionals who help us in future
planning.
 51

5) Helpful for Indian Economy: Banks which are engaged in

business of WM earning revenues from the foreign countries i.e.
outsourcing for economy
 52

LIMITATIONS

1. WM Reduces The Scope Of Management: Though They all

know that management has existence at all levels of life and
society but the term Wealth management only related with the
higher level means rich people, and is not having any plans and
provisions for poor and lower and middle level of society.

2. Chances of Fraud: Another demerit or limitation of the WM

concept is it is not showing the actual position. The customer
doesn’t know about the things going on with using his Wealth
and there may be chances of forgery and fraud with customers.

3. Actual Picture VS Inflation: What is the actual position of

market they don’t know because every thing is done by some
WM professionals. So they can not assume Their position in the
market that also results in inflation because economy is
unknown about the actual state. There may be chance that the
customers are in risk but they are showing the false return and
vice-versa.
 53

Consumer Point Of View :

Wealth Management
Technically, PMS can be defined as hybrid service provided by
portfolio managers, which includes customised stock and
mutual fund investing. Portfolio managers can be of two kinds,
discretionary or non-discretionary. Discretionary portfolio
managers manage the funds of clients independently on their
own accord, while the latter manage the funds according to
their clients’ direction. Any person who is registered with
Securities and Exchange Board of India (Sebi) as a portfolio
manager is allowed to offer PMS. A list of these entities can be
found at www.sebi.gov.in.
PMS vs Wealth manager and fund manager.
PMS is completely different from priority banking and Wealth
management. Priority banking or Wealth management is the
umbrella of products while PMS is a product. So if priority
banking and Wealth management is a grocery shop then PMS
is a specific grocery. Priority banking is usually offered to
premiere customers who have a relationship manager
appointed, who would advice you on your investments across
the products offered by the bank like insurance, and
investment linked products (mutual funds, bonds and unit
linked insurance plan).
Mutual funds and PMS differ on the degree of customization,
minimum investment and on the fee structure. Minimum
investment required for PMS is more than mutual fund. Unlike
PMS, there is no concept of profit sharing in mutual funds.
Also, the level of customization of your investments is higher
in PMS.
Is PMS for you?
PMS is for those people who don’t have the time or the
expertise to do enough research to take informed investment
decisions. If you have the required time and expertise, then
you don’t need these services. Also, SEBI has prescribed a
minimum of Rs 5 lakh investment for PMS, which means the
service is not for small and medium investors.
Risks involved. Though PMS is a good option for managing
your Wealth, it is not entirely without risk or pain. B.D. Sabu,
executive director, Pylon Engineers (India), had opted for
Kotak’s PMS services. “Though the relationship manager told
me about the commissions and brokerage fees, he did no
promise any cut-off or absolute number when asked about
returns. The market was moving up when I invested and my
money grew to about one and half times. But when the market
 54

tumbled suddenly, my earnings fell substantially.” He adds,

“The company churned the portfolio frequently, which gave
them two-way profit on each transaction, as brokerage and
profit sharing.” Sabu now feels it is better to understand the
market and invest on your own. He withdrew his investments
after 14 months, even though he got returns of 25 per cent.
Outlook Money tried unsuccessfully to get a response from
Kotak Securities on this episode.
How to choose a PMS
Investment philosophy. Akhilesh Singh, business head,
Emkay Wealth, says, “The most important factor is to
understand the fund manager’s investment philosophy and
strategy, which must align with the investor’s objectives.”
Singh adds, “Some portfolio managers structure long-term
portfolios, while some prefer to actively churn the portfolio for
higher short-term returns, which adds to the overall cost and
tax liability.”
HSBC, for instance, has a product called Strategic, which is for
the long term, while Angel’s Bluechip is for medium to long-
term investors.
Scheme benchmarks. Make sure that the portfolio is
benchmarked to an appropriate index. This helps measure the
performance of the scheme and the portfolio manager.
Benchmarks are important also as profit-sharing is linked to
the performance of the portfolio above the benchmark. So, an
aggressive portfolio benchmarked to a low-return index will
mean higher over-the-benchmark returns. This means that you
will have to share a larger portion of your profit. The wrong
benchmark distorts the performance of the fund.
Minimum investment.There are many portfolio
managers whose thresholds are much higher than the Sebi-
mandated minimum of Rs 5 lakh. Choose a scheme that fits the
size of your portfolio.
Returns. It is difficult to judge a scheme’s performance
based on returns, as it may vary from the returns of an
investor. Also, depending on the time of entry, an investor’s
returns may vary from that of others. Before signing the
contract, make sure your portfolio manager has a fair record of
surpassing the returns from the benchmark index for
numerous years.
I.V. Subramaniam, CEO and chief investment officer, Quantum
Advisors, says: “The performance should be judged over long
periods of time during both high and low market levels. There
should not be any survivor bias. This happens when an
investor withdraws a portfolio due to bad performance, or a
 55

portfolio manager removes a portfolio to show the

performance numbers of only good portfolios.”
Cost structure.
Portfolio managers usually have two kinds of charges—
management fee, which is fixed, and profit sharing, which is
variable. You can also pay a fully fixed fee. Further, if the
portfolio is churned frequently, it adds to the cost due to
higher tax and brokerage. On each transaction you pay
brokerage and short-term gains tax of 20 per cent.
Management fee ranges from scheme to scheme. You could opt
for a higher performance-linked charge as it puts pressure on
the fund manager to perform better as he has a share in the
profits.
Frequency of disclosure.
This varies from firm to firm, and largely depends on the
agreement between the investor and the company. Most NAVs
are disclosed daily, but you can opt for a company that also
discloses portfolios daily.
Broking house. If the broker is internal, it may be possible
that your portfolio is churned frequently. Usually, asset
management companies have external brokers, while some,
such as Religare, have both external as Well as internal
broking.
Assets under management (AUM).Though higher
AUMs do not guarantee higher returns, it remains an important
factor. A low AUM could be an indicator of poor performance.
They believe that Rs 100 core AUM is a healthy floor.

CONCEPT OF ASSET CLASSES

Asset Mix

Asset mix is the allocation of a portfolio between asset classes, it

balances return and risk. Returns are a combination of the income
from an investment and the price appreciation over the period. Risk is
usually proxied by the “standard deviation” of returns, how much the
return changes about the long-term average.

List Of Different Asset Class

1. Fixed deposit
 56

2. Mutual Fund
3. Equity
4 Commodities
5. Art Fund
6. Real-Estate Fund
7. Insurance product
8. Structured product
9. Gold
10.Currency
11.Oil

Fixed Deposits

FDs, are the most popular today.

With FDs you deposit a lump sum of money for a fixed period ranging
from a few weeks to a few years and earn a pre-determined rate of
interest. FDs are offered by both banks and companies though putting
your money with the latter is generally considered riskier.

Merits and Demerits

The main advantage is that FDs from reputed banks are a very safe
investment because such banks are carefully regulated by the Reserve
Bank of India, RBI, the banking regulator in India.

Note that company FDs isn’t as safe as bank FDs because if the
company goes bankrupt you may lose your money. Make sure you
check the credit rating of a company before investing in its FDs. You
should be especially wary of companies which offer interest rates
significantly higher than the average to attract your money.

The other advantage of FDs is that you have the option of receiving
regular income through the interest payments that are made every
 57

month or quarter. This option is especially useful for retirees.On the

flip side, a fixed deposit won’t give you the same returns that you may
get in the stock markets. For instance a stock-portfolio may rise 20-30
per cent in a good year whereas a fixed deposit typically earns only 7-
10 per cent.

A fixed deposit also doesn’t offer protection against inflation. If

inflation rises steeply during the maturity of the FD your inflation
adjusted return will fall.

The rate of interest on FDs varies according to the maturity with longer
deposits generally earning a higher interest rate. Interest paid on a
fixed deposit is paid either monthly or quarterly according to the
investor’s choice. So if you invest Rs 3 lakhs in a one year fixed
deposit which pays 8 per cent you can earn Rs 2,000 of interest every
month or Rs 6,000 of interest every quarter.

Interest rates on FDs

The rate of interest on FDs varies according to the maturity with longer
deposits generally earning a higher interest rate. Here are the interest
rates offered by ICICI Bank on their FDs. Note that FDs vary quite a bit
from bank to bank so you should search around before investing.

Interest paid on a fixed deposit is paid either monthly or quarterly

according to the investor’s choice. So if you invest Rs 3 lakhs in a one
year fixed deposit which pays 8 per cent you can earn Rs 2,000 of
interest every month or Rs 6,000 of interest every quarter.

Effective Return
 58

Before you invest in FDs you need to understand the concept of

effective return which is higher than the rate of interest on the FD.
Effective return is relevant if you choose to reinvest your interest every
year which means that you will be earning compound interest.
59
 60

MUTUAL FUND

A mutual fund is a professionally managed firm of collective

investments that collects money from many investors and puts it in
 61

stocks, bonds, short-term money market instruments, and/or other

securities.[1] The fund manager, also known as portfolio manager,
invests and trades the fund’s underlying securities, realizing capital
gains or losses and passing any proceeds to the individual investors.
Currently, the worldwide value of all mutual funds totals more than
[2]
$26 trillion.

Since 1940, there have been three basic types of investment

companies in the United States: open-end funds, also known in the US
as mutual funds; unit investment trusts (UITs); and closed-end funds.
Similar funds also operate in Canada. However, in the rest of the
world, mutual fund is used as a generic term for various types of
collective investment vehicles, such as unit trusts, open-ended
investment companies (OEICs), unitized insurance funds, and
undertakings for collective investments in transferable securities
(UCITS).

Types of mutual funds

Open-end fund

The term mutual fund is the common name for what is classified as an
open-end investment company by the SEC. Being open-ended means
that, at the end of every day, the fund issues new shares to investors
and buys back shares from investors wishing to leave the fund.

Mutual funds must be structured as corporations or trusts, such as

business trusts, and any corporation or trust will be classified by the
SEC as an investment company if it issues securities and primarily
invest in non-government securities. An investment company will be
classified by the SEC as an open-end investment company if they do
 62

not issue undivided interests in specified securities (the defining

characteristic of unit investment trusts or UITs) and if they issue
redeemable securities. Registered investment companies that are not
UITs or open-end investment companies are closed-end funds. Neither
UITs nor closed-end funds are mutual funds (as that term is used in
the US).

Exchange-traded funds

A relatively recent innovation, the exchange-traded fund or ETF, is

often structured as an open-end investment company. ETFs combine
characteristics of both mutual funds and closed-end funds. ETFs are
traded throughout the day on a stock exchange, just like closed-end
funds, but at prices generally approximating the ETF’s net asset value.
Most ETFs are index funds and track stock market indexes. Shares are
issued or redeemed by institutional investors in large blocks (typically
of 50,000). Most investors purchase and sell shares through brokers in
market transactions. Because the institutional investors normally
purchase and redeem in in kind transactions, ETFs are more efficient
than traditional mutual funds (which are continuously issuing and
redeeming securities and, to effect such transactions, continually
buying and selling securities and maintaining liquidity positions) and
therefore tend to have loTheyr expenses.

Equity funds

Equity funds, which consist mainly of stock investments, are the most
common type of mutual fund. Equity funds hold 50 percent of all
amounts invested in mutual funds in the United States.Often equity
funds focus investments on particular strategies and certain types of
issuers.
 63

• Capitalization

Fund managers and other investment professionals have varying definitions

of mid-cap, and large-cap ranges. The following ranges are used by
Russell Indexes: [7]
• Russell Microcap Index - micro-cap ($54.8 - 539.5 million)
• Russell 2000 Index - small-cap ($182.6 million - 1.8 billion)
• Russell Midcap Index - mid-cap ($1.8 - 13.7 billion)
• Russell 1000 Index - large-cap ($1.8 - 386.9 billion)

Bond funds

Bond funds account for 18% of mutual fund asse Types of bond funds
include term funds, which have a fixed set of time (short-, medium-,
or long-term) before they mature. Municipal bond funds generally have
loTheyr returns, but have tax advantages and loTheyr risk. High-yield
bond funds invest in corporate bonds, including high-yield or junk
bonds. With the potential for high yield, these bonds also come with
greater risk.

Money market funds

Money market funds hold 26% of mutual fund assets in the United
States. Money market funds entail the least risk, as Well as loTheyr
rates of return. Unlike certificates of deposit (CDs), money market
shares are liquid and redeemable at any time. The interest rate quoted
by money market funds is known as the 7 Day SEC Yield.

Funds of funds
 64

Are mutual funds which invest in other underlying mutual funds (i.e.,
they are funds comprised of other funds). The funds at the underlying
level are typically funds which an investor can invest in individually. A
fund of funds will typically charge a management fee which is smaller
than that of a normal fund because it is considered a fee charged for
asset allocation services. The fees charged at the underlying fund level
do not pass through the statement of operations, but are usually
disclosed in the fund’s annual report, prospectus, or statement of
additional information. The fund should be evaluated on the
combination of the fund-level expenses and underlying fund expenses,
as these both reduce the return to the investor.

Most FoFs invest in affiliated funds (i.e., mutual funds managed by the
same advisor), although some invest in funds managed by other
(unaffiliated) advisors. The cost associated with investing in an
unaffiliated underlying fund is most often higher than investing in an
affiliated underlying because of the investment management research
involved in investing in fund advised by a different advisor. Recently,
FoFs have been classified into those that are actively managed (in
which the investment advisor reallocates frequently among the
underlying funds in order to adjust to changing market conditions) and
those that are passively managed (the investment advisor allocates
assets on the basis of on an allocation model which is rebalanced on a
regular basis).

The design of FoFs is structured in such a way as to provide a ready

mix of mutual funds for investors who are unable to or unwilling to
determine their own asset allocation model. Fund companies such as
TIAA-CREF, American Century Investments, Vanguard, and Fidelity
have also entered this market to provide investors with these options
and take the “guess work” out of selecting funds. The allocation mixes
 65

usually vary by the time the investor would like to retire: 2020, 2030,
2050, etc. The more distant the target retirement date, the more
aggressive the asset mix.

Hedge funds

Hedge funds in the United States are pooled investment funds with
loose SEC regulation and should not be confused with mutual funds.
Some hedge fund managers are required to register with SEC as
investment advisers under the Investment Advisers Act. The Act does
not require an adviser to follow or avoid any particular investment
strategies, nor does it require or prohibit specific investments. Hedge
funds typically charge a management fee of 1% or more, plus a
“performance fee” of 20% of the hedge fund’s profits. There may be a
“lock-up” period, during which an investor cannot cash in shares. A
variation of the hedge strategy is the 130-30 fund for individual
investors.

Latest Asset Under Management for all Mutual Fund houses, sales & redemption figures..

Amount in Rs. Crores

 66

No. of
Mutual Fund Name Asset Under Management
Schemes*
Net inc/dec in
As on Corpus As on Corpus
corpus
ABN AMRO Mutual 368 Jun 30, 6,993.19 May 31, 6,066.30
Fund 2008 2008
926.894
AIG Global 54 Jun 30, 3,206.23 May 31, 4,138.86
Investment Group 2008 2008
Mutual Fund
-932.63
Benchmark Mutual 12 Feb 29, 4,954.72 Jan 31, 5,611.00
Fund 2008 2008
-656.276
348 Jun 30, 37,446.00 May 31, 41,426.64
Birla Mutual Fund
2008 2008
-3980.64
22 Jun 30, 53.86 May 31, 64.83
BOB Mutual Fund
2008 2008
-10.968
Canara Robeco 59 Jun 30, 3,913.65 May 30, 4,122.37
Mutual Fund 2008 2008
-208.72
DBS Chola Mutual 78 Jun 30, 2,249.56 May 30, 2,100.14
Fund 2008 2008
149.42
Deutsche Mutual 199 Apr 30, 12,740.00 Mar 31, 11,996.00
Fund 2008 2008
744
DSP Merrill Lynch 226 Feb 29, 19,940.40 Jan 31, 19,136.00
Mutual Fund 2008 2008
804.396
38 Mar 31, 173.42 Feb 29, 146.93
Escorts Mutual Fund
2008 2008
26.491
39 May 31, 7,898.64 Apr 30, 8,943.36
Fidelity Mutual Fund
2008 2008
-1044.72
Franklin Templeton 241 Mar 31, 25,621.97 Feb 29, 29,424.58
Investments 2008 2008
-3802.607
 67

* indicates currently in operation

MUTUAL FUND DATA FOR THE MONTH ENDED - MAY 31 , 2008

Amount in Rs. Crores

No. of new
schemes
Asset Under
Category launched Sales Redemption
Management
during the
month
New Existing Total Total as on as on Inflow/
schemes schemes May 31 Apr 30 , Outflow
, 2008 2008
Bank
B 0 0 63987 63987 56330 90719 86736 3983
Sponsored
C Institutions 4 1328 23914 25242 19680 18649 16136 2513
Private Sector & Joint Venture :
Indian 12 2832 145600 148432 154833 190170 172571 17599
Predominantly
8 1105 51912 53017 53263 73525 82697 -9172
Foreign
D
Predominantly
16 3979 123265 127244 126730 192744 180667 12077
Indian
Grand Total
40 9244 408678 417922 410836 565807 538807 27000
(B+C+D)
68
69
 70

Equity investment

Generally refers to the buying and holding of shares of stock on a

stock market by individuals and funds in anticipation of income from
dividends and capital gain as the value of the stock rises. It also
sometimes refers to the acquisition of equity (ownership) participation
in a private (unlisted) company or a startup (a company being created
or newly created). When the investment is in infant companies, it is
referred to as venture capital investing and is generally understood to
be higher risk than investment in listed going-concern situations.

Direct holdings and pooled funds

The equities held by private individuals are often held via mutual funds
or other forms of pooled investment vehicle, many of which have
quoted prices that are listed in financial newspapers or magazines; the
mutual funds are typically managed by prominent fund management
firms (e.g. Fidelity Investments or The Vanguard Group). Such
holdings allow individual investors to obtain the diversification of the
fund(s) and to obtain the skill of the professional fund managers in
charge of the fund(s). An alternative, usually employed by large
private investors and pension funds, is to hold shares directly;in the
institutional environment many clients that own portfolios have what
are called segregated funds as opposed to, or in addition to, the
pooled e.g. mutual fund alternative.
 71

Commodities Market
 72

Commodity markets are markets where raw or primary products are

exchanged. These raw commodities are traded on regulated
commodities exchanges, in which they are bought and sold in
standardized contracts.

This article focuses on the history and current debates regarding global
commodity markets. It covers physical product (food, metals,
electricity) markets but not the ways that services, including those of
governments, nor investment, nor debt, can be seen as a commodity.
Articles on reinsurance markets, stock markets, bond markets and
currency markets cover those concerns separately and in more depth.
One focus of this article is the relationship between simple commodity
money and the more complex instruments offered in the commodity
markets.

ART FUND

Wealth management now includes art, real estate investments.

WITH prices of paintings rising 10 times in the last two years, three
new financial entities have launched ‘art advisory’ services as part of
Wealth management services. While Citibank has been providing art
advisory services like art insurance, art storage and using art as a
tradable collateral for some time, the recent surge in prices has driven
Yes Bank, ABN Amro and Dawnay Day to start this service.

The works of M.F. Hussain, Jatin Das or Anjolie Ela Menon are sought
after by art lovers not only for their aesthethic value but also as an
asset. Art galleries are involved in art valuations, i.e. mapping the
pricing history of an artist or research on art.
 73

Art is now being treated as an investment and high net worth

individuals are prompting banks to look at alternative asset classes,
such as art or real estate, for investment as a part of Wealth
management products.

Diversified portfolio

Individuals looking at alternative investments rather than the usual

investments in equity-related products.

“Investments in alternative asset classes give clients a diversified

portfolio across a variety of asset classes,”

Yes Bank is expected to launch a Wealth management service that will

offer investment in real estate, art and jeWellery. It expects to kick-
start the real estate service during this fiscal.

“The bank is planning tie-ups with real estate consultant agencies. The
service will largely cater to non-resident Indians seeking opportunities
to invest in real estate in the country,”.

Tie-ups with galleries

In the art segment, tie-up with art galleries. “Contemporary Indian art
will be at focus. The hiring specialists in the field for advisory,” High
networth individuals in India are increasingly looking at contemporary
Indian art as a good investment. With the advent of private art funds
and galleries, art is becoming an emerging asset class.

ABN Amro advises clients on investment in art. However, the execution

depends on the client in conjunction with experts in the field.
 74

It is difficult to generalise. The majority of clients begin with an

investment of around 4-5 per cent of their portfolio,” targets customers
with Rs 2-2.5 crore threshold for investment.

According to the banks, some clients also invest in these asset classes
to minimise risk because they are looking at protecting their capital.
Investment in these asset classes requires a review of client’s age,
personal ability to take risk and most importantly, client’s interest.
What percentage of assets would be allocated to alternative assets
would depend on the client’s interest and ability to take risk.

REAL ESTATE FUND

India Real Estate Fund is a significant component of the Indian realty

market flooded with Indian and foreign financial institutions. The
growing increase in the industrial, commercial and residential projects
have boosted the real estate market in India. This has thrown open
unlimited scope for the incoming of the India Real Estate Funds. The
profits have encouraged financial assistance from not only domestic
funds but also lured many foreign investors to participate in the India
Real Estate Fund.

The cooperating assistance from the government has further

encouraged liquidity flow into the India real estate market sector. The
foreign contributions in the India Real Estate Fund have been
witnessing a steady rise of 40%-45% per year. The domestic financial
institutions have also build up their investments like their foreign
counterparts. This combined participations from both along with
contributions of the corporate houses has accelerated the growth of
India Real Estate Fund.
 75

Leading India Real Estate Fund:

Some of the leading India Real Estate Fund are :

1. HDFC Property Fund- HDFC India Real Estate Fund (HI-REF), the
first scheme HDFC Property Fund, invest in all the stages of the
real estate projects.

2. DHFL Venture Capital Fund- DHFL Venture Capital Fund,

promoted by Dewan Housing, has a focus on developing
properties rather than investing in real estate.

3. Kshitij Venture Capital Fund - Kshitij Venture Capital Fund, a

group venture of Pantaloon Retail India Ltd., will be deploying
funds exclusively in developing malls specially in western and
southern India.

4. India Advantage Fund (ICICI)

5. Kotak Mahindra Realty Fund

• India Real Estate Mutual Fund:

The further involvement of the real estate mutual funds have improved
the quality of the construction practices. The 10th Five-Year Plan has
proposed that Securities and Exchange Board of India would regulate
the India real estate mutual funds.
 76

• Real Estate Investment Trusts:

The primary difference between Real Estate Investment Trusts and a

mutual fund is that investments made in the former are traded in real
estate stocks and not invested in company stocks moreover they
provides a heavier liquidity than the mutual funds.

• India Real Estate Foreign Funds-

The significant international investments in the India Real Estate Fund

are like:

1.Warburg Pincus
2.Blackstone Group
3.Broadstreet
4.Morgan Stanley Real Estate Fund
5.Columbia Endowment Fund
6.Hines
7.Tishman Speyer
8.Sam Zell’s Equity International
 77

Insurance Product
 78

The modern concept of insurance practices in India started during the

British rule in 1818 when Oriental Life Insurance Company was
established in Calcutta. India became independent from British rule in
1946, and by 1956 the insurance sector was nationalized, with the Life
Insurance Corporation of India created by combining almost 245
private life insurance companies; 107 private non-life companies
combined in 1973 to form the General Insurance Corporation. But
since the very purpose of nationalizing the insurance sector got
sidelined due to the monopolistic power it enjoyed, coupled with the
bureaucratic mindset of LIC and GIC, insurance again was opened to
private players in 1999. During 2000-2006, almost 15 life and 13 non-
life private insurance players (mostly joint ventures between Indian
and foreign players) started operations in India, indicating the
willingness of foreign institutional investors to enter the Indian
insurance sector. But through all these major changes the actual
impact was felt only in major urban areas, while the vast majority of
the rural population was excluded from the insurance sector. Around
the world, scholars and financial experts believe that in the next 5 to
10 years, India and China are going to be the targets for insurance
companies. So far, most of the insurance companies in India are not
actively tapping the huge potential of the rural markets. Unless the
rural markets are given priority consideration, all predictions about
future insurance industry potential in India are going to be distant
dreams. The present insurance business is not even able to penetrate
20%?30% of the total population of 1.095 billion, and the projected
population figure by 2025 will be approximately 1.501 billion. The
order of the day will be to refocus on micro insurance in India to
capture the huge potential of rural customers Unit Linked Insurance
Plan (ULIP) provides for life insurance where the policy value at any
time varies according to the value of the underlying assets at the time.
 79

ULIP is life insurance solution that provides for the benefits of

protection and flexibility in investment. The investment is denoted as
units and is represented by the value that it has attained called as Net
Asset Value (NAV).

ULIP came into play in the 1960s and is popular in many countries in
the world. The reason that is attributed to the wide spread popularity
of ULIP is because of the transparency and the flexibility which it
offers.

As times progressed the plans Theyre also successfully mapped along

with life insurance need to retirement planning. In today’s times, ULIP
provides solutions for insurance planning, financial needs, financial
planning for children’s marriage planning also can be done with this.

Structured Product

A structured product is generally a pre-packaged investment strategy

which is based on derivatives, such as a single security, a basket of
securities, options, indices, commodities, debt issuances and/or
foreign currencies, and to a lesser extent, swaps. The variety of
products just described is demonstrative of the fact that there is no
single, uniform definition of a structured product. A feature of some
structured products is a “principal guarantee” function which offers
protection of principal if held to maturity. For example, an investor
invests 100 dollars, the issuer simply invests in a risk free bond which
has sufficient interest to grow to 100 after the 5 year period. This bond
might cost 80 dollars today and after 5 years it will grow to 100
dollars. With the leftover funds the issuer purchases the options and
swaps needed to perform whatever the investment strategy is.
Theoretically an investor can just do this themselves, but the costs and
 80

transaction volume requirements of many options and swaps are

beyond many individual investors.

As such, structured products were created to meet specific needs that

cannot be met from the standardized financial instruments available in
the markets. Structured products can be used as an alternative to a
direct investment, as part of the asset allocation process to reduce risk
exposure of a portfolio, or to utilize the current market trend.

Composition

Structured products are usually issued by investment banks or

affiliates thereof. They have a fixed maturity, and have two
components: a note and a derivative. The derivative component is
often an option. The note provides for periodic interest payments to
the investor at a predetermined rate, and the derivative component
provides for the payment at maturity. Some products use the
derivative component as a put option written by the investor that gives
the buyer of the put option the right to sell to the investor the security
or securities at a predetermined price. Other products use the
derivative component to provide for a call option written by the
investor that gives the buyer of the call option the right to buy the
security or securities from the investor at a predetermined price.
 81

Risks

The risks associated with many structured products, especially those

products that present risks of loss of principal due to market
movements, are similar to those risks involved with options. The
potential for serious risks involved with options trading are well-
established, and as a result of those risks customers must be explicitly
approved for options trading.

GOLD

Factors influencing the gold price

Today, like all investments and commodities, the price of gold is

ultimately driven by supply and demand, including hoarding and
disposal. Unlike most other commodities, the hoarding and disposal
plays a much bigger role in affecting the price, because most of the
gold ever mined still exists and is potentially able to come on to the
market for the right price. Given the huge quantity of hoarded gold,
compared to the annual production, the price of gold is mainly affected
by changes in sentiment, rather than changes in annual production.

According to the World Gold Council, annual mine production of gold

over the last few years has been close to 2,500 tonnes. About 3,000
tonnes goes into jewelry or industrial/dental production, and around
500 tonnes goes to retail investors and exchange traded gold funds.
This translates to an annual demand for gold to be 1000 tonnes in
excess over mine production which has come from central bank sales
and other disposal.
 82

Central banks and the International Monetary Fund play an important

role in the gold price. At the end of 2004 central banks and official
organizations held 19 percent of all above-ground gold as official gold
reserves. The Washington Agreement on Gold (WAG), which dates
from September 1999, limits gold sales by its members (Europe,
United States, Japan, Australia, Bank for International Settlements and
the International Monetary Fund) to less than 400 tonnes a year.
European central banks, such as the Bank of England and Swiss
National Bank, have been key sellers of gold over this period.

Although central banks do not generally announce gold purchases in

advance, some, such as Russia, have expressed interest in growing
their gold reserves again as of late 2005. In early 2006, China, which
only holds 1.3% of its reserves in gold, announced that it was looking
for ways to improve the returns on its official reserves. Many bulls
hope that this signals that China might reposition more of its holdings
into gold in line with other Central Banks.

In general, gold becomes more desirable in times of:

Bank failures
When dollars were fully convertible into gold, both were regarded as money.
However, most people preferred to carry around paper banknotes rather than the
somewhat heavier and less divisible gold coins. If people feared their bank
would fail, a bank run might have been the result. This is what happened in the
USA during the Great Depression of the 1930s, leading President
Roosevelt to impose a national emergency and to outlaw the holding of gold by
US citizens known as Executive Order 6102 which has since been ended.

Low or negative real interest rates

If the return on bonds, equities and real estate is not adequately compensating for
risk and inflation then the demand for gold and other alternative investments such
as commodities increases. An example of this is the period of Stagflation that
occurred during the 1970s and which led to an economic bubble forming in
precious metals.

War, invasion, looting, crisis

 83

In times of national crisis, people fear that their assets may be seized and that the
currency may become worthless. They see gold as a solid asset which will always
buy food or transportation. Thus in times of great uncertainty, particularly when
war is feared, the demand for gold rises.
 84

Currency
The modern hedge fund manager’s liberal tongue-in-cheek
definition is: “If it moves up and down independently, then it’s
an asset class.” While currencies surely do a lot of moving up
and down, they also stand out for other reasons:
• The global foreign-exchange (FX) market can be considered by far the largest
marketplace in the world, not only geographically but also with reference to trading
volume. The daily turnover is growing constantly and has long ago surpassed the $1
trillion mark: forty times the size of world trade.
• An important difference between currencies and other markets is that currency prices
allow us to analyse also their
reciprocal values. A falling dollar/yen is synonymous with a rising yen because the
dollar can be expressed in yen and, vice versa, the yen in dollars. By comparison, the
dollar is never measured in units, as the Dow Jones for example.
• For the same reason the expression ‘short sale’ – so much maligned in equity trading
– does not exist in currency trading because the short sale of a currency is equivalent
to a purchase of the other currency.
• For similar reasons, the currency market cannot suffer a ‘crash’ (such as the stock
market crashes of 1929 or 1987) through which the wealth of all market participants
dwindles. In the currency market eachloss is matched by an equivalent gain of the
counter-party.
• Another unique feature of the currency market is that it is active without interruption
‘round-the-clock’.
 85

Portfolio composition of currency

Modern portfolio theory postulates that relative risk can be

reduced by diversification into at least six or more
components. This is not necessarily true for currency
portfolios. Most delivering percentage returns. The index
serves as a proxy for available currency manager portfolio
returns in general and has the added benefit of being
uncorrelated to returns of other asset classes. Low correlation,
liquidity and transparency are good enough reasons for
currencies to be considered a prime candidate for inclusion in
any investment portfolio.
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Companies Providing Wealth Management Services

Kotak securities
INTRODUCTION
is handling Wealth management department with a name of
Kotak portfolio management.

PRODUCTS
• GEMS Portfolio
• Origin
• Select Portfolio
• Select Optima
• Klassic Portfolio - Flexi
• Investguard Portfolio
• Core Portfolio
• NRI

They are providing above products according to the customer

requirement. The above products are varying to high risk
customers to low risk customers with a time origin of
investment .They have a separate service for NRI asset
management service.

ASSET CLASSES USED

• Direct Equity
• Mutual funds
• Structured products
• Insurance products
• Fixed deposits.
 89

Asset Size

It is also one of the largest, with Assets Under

Management of over Rs. 3300 Crores.
INVESTMENT PHILOSPHY
Our mission is to provide clients with wealth management
services that result in a performance that meets or exceeds
their investment goals. Exposing our clients to undue risk is
contrary to this mission. We believe that the tools of Modern
Portfolio Theory empower us with a methodology for building
superior investment portfolios. This has been tested in all
types of market conditions for decades and has consistently
protected investor wealth from the perils of non-
diversification.

Morgan Stanley

INTRODUCTION
Morgan Stanley is a leading global financial services firm providing a
wide range of investment banking, securities, investment management
and Wealth management services. The Firm’s employees serve clients
worldwide including corporations, governments, institutions and
individuals from more than 600 offices in 33 countries

Mutual Fund has a unique investment team model, best described as a

‘Community of Boutiques’, which aims to ensure that each investment
strategy is managed by a dedicated team with specific experience in
that strategy.

Morgan Stanley which has been active in the country since 1993 and is
seeking to develop an integrated platform in India, which encompasses
the full range of businesses the Firm conducts globally.

PRODUCTS
 90

• Large Cap Growth Equity with Sridhar Sivaram and Amay

Hattangadi as Lead Portfolio Managers.

• Multi/Mid cap Equity with Jayesh Gandhi as Lead Portfolio

Manager.
• Multi-Strategy with Navneet Munot as Lead Portfolio Manager.
Morgan Stanley A.C.E. (Across Capitalisations Equity) Fund, an
open-ended equity scheme managed by Jayesh Gandhi, was
launched in February, 2008 as the first fund open ended offering
of Morgan Stanley Mutual Fund in India.

ASSET CLASSES USED

• Mutual funds
• Structured products
• Insurance products
• Fixed deposits.

Asset size

The India Magnum Fund, an offshore fund set up in 1989, marked the
entry of Morgan Stanley in the Indian market. In 1994, Morgan
Stanley launched its first domestic fund, Morgan Stanley Growth Fund
(MSGF). As of December 31, 2007, Morgan Stanley Rs 4380 crores in
assets under management.

Morgan Stanley Investment Management, together with its investment

advisory affiliates, has nearly 1000 investment professionals around
the world and approximately US$577 billion in assets under
 91

management or supervision as of February 29, 2008. By leveraging its

global ‘community of boutiques’ structure and the strength of Morgan
Stanley, MSIM strives to provide outstanding long-term investment
performance, service and a comprehensive suite of investment
management solutions to a diverse client base, which includes
governments, institutions, corporations and individuals.
 92

INVESTMENT PHILOSPHY

we use a strict value-investment methodology. We believe this to be

the best way to generate consistently strong returns, whilst minimizing
risks for our clients. Value Investing has outperformed the stock
markets consistently for more than 80 years. It is a very research-
intensive discipline and eschews future projections, focusing instead on
what is the intrinsic value of a company today.

Wealth Management runs focused portfolios comprising 15-25 stocks.

We are only interested in the best value companies in the entire
market. Our goal is to find companies that offer a substantial ‘Margin
of Safety’, which both reduces the risk of losses, whilst allowing for
superior returns.

Moti Lal Oswal Wealth Management

INTRODUCTION
In today’s complex financial environment, investors have
unique needs which are derived from their risk appetite and
financial goals. But regardless of this, every investor seeks to
maximize his returns on investments without capital erosion.

While there are many investment avenues such as fixed

deposits, income funds, bonds, equities etc…. It is a proven
fact that Equities as an asset class typically tend to outperform
all other asset classes over the long run.

Investing in equities, require knowledge, time and a right

mind-set. Equity as an asset class also requires constant
monitoring may not be possible for you to give the necessary
time, given your other commitments.

They recognize this, and manage your investments

professionally to achieve specific investment objectives, and
not to forget, relieving you from the day to day hassles which
investment require.
 93

PRODUCTS
• Value Portfolio
• Bull’s Eye Portfolio
• Next Trillion Dollar Opportunity Portfolio

ASSET CLASSES USED

• Direct Equity
• Mutual funds
• Structured products
• Insurance products
• Fixed deposits
 94

Asset Size

Motilal Oswal Securities Ltd brings with more than 2 decades

of experience & expertise in equity research and stock
broking. They are one of the leading portfolio service
providers, with asset under management worth Rs. 590 Crores
Investment philosophy

We have established a disciplined and dynamic investment process

that is rooted in the premise that asset allocation and investment style
diversification are the most critical determinants in achieving
consistent investment returns with acceptable levels of risk.

Our investment process is solid and consistent at its core, yet dynamic
in its application. The premise, as outlined above, remains constant. At
the same time, we continually update its application for the most
current economic climate so as to keep our investment
recommendations up-to-date and relevant. Additionally, when applied
to each client’s portfolio, the process accommodates that client’s
specific situation, time horizon, risk tolerance, and other factors so
that the result is a truly customized portfolio.
 95

Religare Wealth Management

INTRODUCTION
Wealth Spectrum

• Portfolio management

• Art Intiative

• Priority Client Equity Service

In The continuous endeavour to provide the best of the product and

services to the clients, it The Religare and Macquarie are now 50:50
Joint venture partners in the newly created entity Religare Macquarie
Wealth Management Limited.

The new entity is testimony to Religare’s firm commitment to all its

businesses wherein, it believes in offering nothing short of the very
best to its clients and the end consumers. In order to do so, it believes
in creating and delivering value by either going solo or by leveraging
relevant and meaningful partnerships with global majors and domain
specialists. They believe that this joint venture with Macquarie is a
marriage of strengths that combines the sharp understanding, insights
and execution capabilities of Religare in the Indian context with the
global expertise of Macquarie.

The new brand for the venture-Religare Macquarie Private Wealth shall
strive to proactively manage their Wealth and is hungry and keen to
bring about a much needed refreshingly different paradigm shift in the
Indian market place.
 96

Religare Macquarie Private Wealth shall draw strength and its core
essence from the values of Religare’s “Diligence” and Macquarie’s
“Forward Thinking”.

PRODUCTS :

• Panther
• Tortoise
• • Elephant
• Caterpillar
• Leo
• Panther

The Panther portfolio aims to achieve higher returns by taking

aggressive positions across sectors and market capitalizations. It is
suitable for the “High Risk High Return” investor with a strategy to
invest across sectors and take advantage of various market conditions.

• Tortoise

The Tortoise portfolio aims to achieve growth in the portfolio value

over a period of time by way of careful and judicious investment in
fundamentally sound companies having good prospects. The scheme is
suitable for the “Medium Risk Medium Return” investor with a strategy
to invest in companies which have consistency in earnings, growth and
financial performance.

• Elephant

The Elephant portfolio aims to generate steady returns over a longer

period by investing in Securities selected only from BSE 100 and NSE
 97

100 index. This plan is suitable for the “Low Risk Low Return” investor
with a strategy to invest in blue chip companies, as these companies
have steady performance and reduce liquidity risk in the market.

• Caterpillar

The Caterpillar portfolio aims to achieve capital appreciation over a

long period of time by investing in a diversified portfolio. This scheme
is suitable for investors with a high risk appetite. The investment
strategy would be to invest in scrips which are poised to get a re-
rating either because of change in business, potential fancy for a
particular sector in the coming years/months, business diversification
leading to a better operating performance, stocks in their early stages
of an upturn or for those which are in sectors currently ignored by the
market.

• Leo

Leo is aimed at retail customers and structured to provide medium

to long-term capital appreciation by investing in stocks across the
market capitalization range. This scheme is a mix of moderate and
aggressive investment strategies. Its aim is to have a balanced
portfolio comprising selected investments from both Tortoise and
Panther. Exposure to Derivatives is taken within permissible
regulatory limits.
 98

ASSET CLASSES USED :

• Equities (Including International)

• Debts
• Commodities
• Structured Products
• Emerging Investment Classes.

• Religare Arts Initiative (RAI)

Religare Arts Initiative (RAI)

The Indian arts Industry is currently valued as one of the growing

industries of the world market. Art prices in India are escalating every
year.

The Religare Arts Initiative is a venture of Religare Enterprises Limited

with a view to provide a quality platform and infrastructure for Arts.
This initiative has been envisioned as a true champion “for the cause
of arts”.

The RAI will provide a platform for artists of all ages, genres, and
statures. They are already in the process of creating a transparent and
highly rich infrastructure that would involve cataloguing,
documentation, art research, and the development of an art aesthetic
on an institutional basis. RAI will work closely with the Indian art and
design schools on the issues such as the curriculum and resources to
bring them into the same quality domain as their international
counterparts.

RAI’s envisaged activities include building infrastructure for arts,

creation of an arts awareness program, creation of spaces / canvases
 99

for the artists, creation of International quality Gallery Spaces,

providing Art Advisory Services and much more.

ASSET SIZE :

Rs. 410 cr.

Investment Philosophy

They believe that investors are better served by a disciplined

investment approach, which combines an understanding of the goals
and objectives of the investor with a fine tuned strategy backed by
research.

• Stock specific selection procedure based on fundamental research

for making sound investment decisions.
• Focus on minimizing investment risk by following rigorous
valuation disciplines.
• Capital preservation.
• Selling discipline and use of Derivatives to control volatility.
 100

Standard chartered

INTRODUCTION

Priority Banking – personalised Wealth management program at

Standard Chartered Bank. It is their endeav their to be the Right
Partner in all their personal and business ventures. That’s why Priority
Banking has been tailored to offer you the highest level of service,
appropriate to your unique requirements and status.

PRODUCTS :

Excel Banking

In today’s fast moving, technology-driven world, you need your bank

to keep pace with your banking needs. That’s why you need Excel
Banking - a much personalised Wealth management service that has
been designed to help you make the most of your money, without
taking up most of your time.

With the services of their personal Relationship Manager customer

can access complete Wealth management solutions, from routine
banking and transaction management to more complex investment
services and insurance advisory services.

What’s more, you also get fee waivers on premium savings and
current accounts and preferred pricing on a range of complementary
banking products and services.
 101

Here are the unique features of Excel Banking:

• Access to a personal Relationship Manager

• Exclusive privileges such as a free gold card, free debit cards and discounts on
lockers, demat accounts and overdraft against term deposits
• Free multi-city cheque book for current account and savings account holders
• Express cheque collection and national clearing speed service
• Free demat account
• Extended branch hour for easier and quick transactions
• Redirection of interest into any account specified by you
• Phone Banking and ATM facilities for 24 hour access

Parivaar Account

Parivaar is a unique Wealth Management Solution from Standard

Chartered Bank that offers your family flexibility, convenience and
essential tools for Wealth accumulation and preservation.

Parivaar is much more than a regular Savings Account. It allows you maintain
your individual identity while allowing you to tap your family’s financial strength.
Here are some of the features of the Parivaar savings account :
• Your family can maintain individual savings accounts with the benefit of
clubbing balances in grouped accounts.
• Anytime, anywhere access to accounts through ATMs, Phone Banking and
Online Banking.
• Globally valid ATM-cum-debit card can be used at 3,26,000 merchant outlets in
India and 14 million outlets worldwide.

ASSET CLASSES USED :

• Equities
• Debts
• Mutual funds.
 102

• Commodities
• Structured Products

ASSET SIZE :

Wealth Management Department has asset under

management is Rs.710 Cr.
 103

INVESTMENT PHILOSPHY:

We have developed a different and more focused approach to wealth

management. Understanding that wealth means different things to
different people, we believe that no one is better placed to help you
acquire wealth and grow it, use and enjoy it, protect it and pass it on.

Our appreciation that every investor is complex and different and can
have complex needs, has led us to our development of a highly
innovative new approach that we call our investment philosophy. We
believe it radically improves the management of private client
investments.

Our investment philosophy uses sophisticated profiling and portfolio

construction techniques to aim for investments that deliver market-
leading performance in the way you want, because while performance
is key, it is performance that suits you that really matters.
Performance that reflects your attitudes and personality and gives you
the confidence and reassurance to make decisions with clarity and
speed.

ABN AMRO WEALTH MANAGEMENT

ABN AMRO NRI Services, under the aegis of Van Gogh
preferred banking brings to you a personalized and
comprehensive solution through Their exclusive Wealth
Management Services. They will help you preserve and
enhance your Wealth generated in India and abroad with a
range of exclusive Investment and Insurance solutions.
ABN AMRO Asset Management is the separately organised
investment management division of ABN AMRO Bank. ABN
AMRO Asset Management is headquartered in London and
Amsterdam with other main units in Atlanta, Chicago, Hong
Kong and Singapore. It has significant experience in managing
money for over 2000 institutional clients including central
banks, pension funds, insurance companies and other
institutions. In addition to managing funds for institutional
clients, ABN AMRO Asset Management offers tailored
 104

investment management services to private clients. It employs

2000 people worldwide in over 30 countries, with portfolio
managers and analysts located around the world. All
investment products benefit from the valuable sourrce of local
expertise, while portfolios are often managed locally. This local
knowledge is used as input for international co-ordination of
the investment policy.
ABN AMRO Asset Management’s approach to full-service
investment management underlines Their commitment to long-
term client relationships. They believe that excellence can only
be achieved when investment performance and risk
management are combined with high-quality client servicing.
Their goal is to add value by offering risk-controlled
outperformance in the context of specific benchmarks and
investment horizons of their investors.
 105

PRODUCTS
INVESTMENT SERVICES : They recognize financial needs vary
and there is no “one-size-fits all” approach. ABN AMRO
Investment Services brings to you an unmatched blend of
personalized services and an array of innovative and exclusive
products suited for each of your investment needs. Whether
you are in India or abroad, They extend Their hand of
partnership as your trusted financial advisors.
Their expert Investment Counselors ensure that your individual
risk profile is drawn so that They can cater to your specific and
precise investment needs. Optimal asset allocation among a
wide range of investment products helps to create a portfolio
best suited to your requirements and preferences, while
maintaining the best balance between risk and return

INSURANCE SERVICES : Being away from India

doesn’t mean you have to compromise the safety and security
of your loved ones. In fact, your savings from your time
overseas can easily be channelised to meet your family’s
needs for today and in the future. ABN AMRO Insurance
Services brings to you an unrivalled combination of steady
returns with minimum risk.

Your insurance plans will provide your family the added

financial security in case of an unforeseen exigency. These
investment cum protection plans can help you create Wealth
for funding your long term needs like education and marriages
of your children and creating your retirement corpus. They
offer you a world of choice in insurance that can be customized
to meet your individual needs.

ASSET CLASSES USED

Expertise In All Asset Classes

As a global, full-service investment manager, they offer their
broad customer base capabilities in all major asset classes,
and a spectrum of products including both fundamentally
driven investment approaches and more quantitative
investment processes.
ABN AMRO Asset Management has significant experience in
managing money for consumers as well as for institutional
clients including central banks, pension funds, insurance
companies and other institutions.

ASSET SIZE
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US $40.40cr
INVESTMENT PHILOSPHY

Our investment philosophy takes root in the belief that

fundamental research as an investment process yields returns
and hence we lay emphasis on company specific research. The
underlying principles that help us formulate the investment
process: Investments are made in ‘businesses‘? and not
‘companies‘?; the latter is just an avenue. Companies (within
that business) that can generate returns on capital in excess of
their cost of capital over a business cycle are preferred.
Earnings growth of a company is the prime driver and over a
period of time the stock price of the company shall be a slave of
the same. Hence, investments in stocks are to be made at
reasonable valuations. Own companies that can generate long-
term, sustainable earnings, managed by qualified professionals
capable of executing a well conceived strategic plan

HSBC Financial Planning Services

your portfolio can be managed in a fully discretionary manner from a

selection of ‘Best of Breed’ third party panel of Portfolio Management
Service providers.

The main objective is to help you to preserve your wealth in line with
your investment objectives.

Inflation, falling interest rates and fluctuating market

conditions require you to plan your finances carefully.
Celebrate important occasions in the future by managing your
Wealth Well now. HSBC’s Financial Planning Services offer
assistance to secure your future.
Their Financial Planning Services are available for existing
HSBC customers and are free of cost.

Launched in India in November 2002, HSBC Investments

manages assets of over INR 10,684 crores, spread across 21
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schemes and plans under the HSBC Mutual Fund umbrella, as

of end August 2006. HSBC Investments has also soft-launched
HSBC Alpha Account, the Portfolio Management services (PMS)
Business to manage wealth for High Net worth Individuals.
Currently, the PMS business offers two product baskets,
namely, the
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PRODUCTS
• Signature Portfolio
• Strategic Portfolio.

ASSET CLASSES USED

Traditional investments :
Direct Equity Advisory : Customized advice on direct equity
portfolios based on your risk profile and specific requirements.
The proposition, backed by comprehensive in-house research,
entails building portfolios with fresh funds or restructuring
legacy portfolios to provide better risk adjusted returns.

Mutual Funds : Our open architecture philosophy and ‘Best of Breed’

selection of debt and equity mutual funds allows you to buy the top
performing mutual funds available in the market.

Non - traditional Investments :

Structured Products : Combinations of derivatives and financial

instruments create structures that have significant risk/return features
that may not be otherwise available in the marketplace. Structured
products are designed to provide investors with highly targeted
investments tied to their specific risk profiles, return requirements and
market expectations.

Real Estate Venture Funds : To provide you with diversification avenues

which reduce the overall portfolio risk, we seek to bring to you
opportunities in real estate space through venture capital funds
available in the market.

ASSET SIZE
Globally, the Group Investment Business currently manages
and distributes assets over US $ 297 billion worldwide, at the
close of May 2006. Assets, which range from retail mutual
funds and money market funds to lifecycle products to
portfolios for private clients and institutions.
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INVESTMENT PHILOSOPHY
Need-based sales approach with innovation
Our team works to suggest financial solutions based on your
risk appetite, profile and needs. Using customer insight, we
have developed a financial planning tool. It analyses and
generates a comprehensive financial plan based on your
existing financial position, expected future cash flows,
inflation and identified financial objectives. Our Relationship
Managers extensively use this tool to do financial planning for
you taking into account your long-term objectives and / or
medium to short term requirements.
For consistent and uniform delivery of financial planning as per
the defined customer need centric process, there is a
dedicated, independent Sales Quality team to conduct regular
quality checks close to the point-of-sale.
White-listed funds
The concept of white listed funds lies in the bank’s open
architecture model, which lays emphasis on meritocracy. We
carefully look at various products available in the market and
after thorough due diligence select product providers /
schemes which adequately correspond to the needs of our
customers. White listed funds are selected based on various
proprietary models that are used for intense quantitative
analysis. These funds help our clients build a long-term
portfolio and in achieving long-term financial goals.
Technology is a potent weapon
For consistency in the manner in which our Relationship
Managers identify customer needs and suggest suitable
solutions, we extensively leverage technology to support our
sales process. Our indigenously developed systems like Wealth
Management System, Financial Planning System and Customer
Relationship Management System have been built basis
customer insights. We constantly look at evolving these
systems to address sales process requirements arising out of
dynamically changing market conditions and customer needs.
We therefore treat technology as a vital ally in executing our
philosophy of customer need centricity in a structured and
uniform fashion.
Sharing the knowledge
We frequently organise wealth management events and
investment seminars, where you can interact with investment
experts and fund managers. This provides us a platform to
know and understand the market and economic developments
and trends.
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Citi Bank

INTRODUCTION
Citi has the largest footprint among wealth managers in the
Asia Pacific with more than 20 offices across the region. Over
2,000 wealth management professionals, including 600-plus
private bankers, financial advisors and investment specialists,
serve 6000 high net worth individuals and families, including
half of all billionaires in Asia ex-Japan. Citi Global Wealth
Management is a top-tier global wealth manager providing
some of the best institutional capabilities available today.
Serving both private and institutional clients, Citi Global
Wealth Management taps the strength and resources of
Citigroup to maximize value and service.
The Global Wealth Management division at Citi comprises three
of the most respected brands in wealth management:

PRODUCTS
• Citi Private Bank
• Citi Smith Barney
• Citi Investment Research.

ASSET SIZE Rs.530Cr.

ASSET CLASSES USED

INSURANCE PRODUCTS :
Structured products :
Art advisory services :-
In today’s market, art presents an attractive investment
option. To assist you with advice on various art investments, or
to help you in buying or selling art, Citigold has tied up with a
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reputed art house, Osians - Connoisseurs of Art Private

Limited.
Osians is based in Mumbai and possesses the expertise,
archival infrastructure and professional capacity to
systematically cohere various sTheirces of knowledge and
provide select Citigold clients objective information on
purchasing, preserving, valuing and selling art for seasoned
connoisseur and emerging collectors.
Citigold together with Osians will now help you strengthen
your investments in art by providing you the following
services:
• Documentation and Archiving
• Authentication, Certification and Valuation
• Preservation and Restoration
• Insurance and Custodial Services.
• Publication and Design Services
• Art and Cultural Events Management
• Corporate Gifting
• Museum and Collection Building Services.
• Estate Planning

Citi bank Time Deposits

• Deposits held in units of Rs. 1000 for easy liquidity.
• Flexible tenures from 15 days to 5 years.
• Overdraft facility of up to 90% against your deposit to fund another
investment opportunity.
• Automatic roll over facility to renew your deposit when it matures.
• An exclusive set of structured products like market linked products.

INVESTMENT PHILSPOHY

Citi bank is investing customers portfolio according to

which stage of life they are :-
• Young adult
• Married and yet to have kids
• Parent with young kids.
• Parent with settled child.
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And according to expenses they are thinking of :-

• Buying a house
• Going on a holiday
• Getting married
• Going abroad

ICICI Wealth Management

INTRODUCTION

In India ICICI bank is a very Well known banks in the field of Wealth
management. ICICI Bank will float subsidiary for the purpose of WM
activities in Canada & other market even as ICICI has rolled out ICICI
Group Global Private Clients for those with net worth of $ 1 million or
more. ICICI GCPC launched their business in Dubai very recently in
the month of April-08 and caught 2500 clients. They are going to add
another 1000 high network clients this year.

ICICI Bank is using the services of global players like Merrill Lynch,
City group, and UBS for catching the clients for Wealth Management
business. ICICI Bank and its subsidiaries are engaged in the
development of various attractive products (services) for the clients
with net worth of $ 1 million.

The eyes of ICICI Group Global Pvt. Clients on the rising number of
dollar millionaires at present they are 100,000 in number in few year
the number will definitely increase. India’s No.2 lender banker ICICI
expects to sustain the 70% growth in its private Wealth management
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business. ICICI has 150,000 customers with investible surplus of at

least Rs. 10 lakhs equity, real estate and private equity is driving the
private banking business in India. India has market of Wealth
management about $ 600 billion.

PRODUCTS
N.A

Asset classes used

ONLINE TRADING : They also bring to you the best value for
money through competitively priced brokerage charges for
online share trading services from www.icicidirect.co. With a
3-in-1 account consisting of a trading account, ICICI Bank
savings account and demat account, you can stay connected to
the market at all times. To add to this, They give you waiver on
the account opening charges too!
With a 3-in-1 account consisting of trading, ICICI Bank account
and demat account, you can enjoy:
• Competitive priced brokerage rates
• Reduced account opening charges
• Online share trading services
MUTUAL FUNDS :
They offer you advice on the entire universe of mutual funds.
So be it equity funds, where you look for growth and capital
appreciation or debt funds for capital preservation, They can
help you select the right mix to suit you. Choose from an array
of more than 15 fund houses with innumerable schemes.
Customised Products
• Structured Products : Their Structured Product offerings are tailor-made to
suit your investment objective and risk appetite. Their services include
Portfolio Management Services and specially designed products that are
Equity or Index-linked in nature.
• Alternate Asset Products : They offer products which complement
your existing investments eg. Art Funds, Private Equity Funding, Realty
Funds. So, if you’re looking beyond the stock market, you’ll find us there
too!

Life and General Insurance

Asset SIZE

Rs.1230 Cr.
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INVESTMENT PHILOSPHY Our approach emphasizes a

globally diversified investment strategy designed to provide
above average performance, at below average risk.

AXIS BANK & WEALTH MANAGEMENT

One of India’s leading private sector banker Axis bank also combined
with Banque Privee Edmond de Rothschild Europe based Wealth
management expertise institution & is going to make new standard for
the NRI’s Wealth management.

The LCF Rothschild group has based its reputation in the area of
Wealth management on its big banking experience. Actually the
institution is engaged in the task of providing financial advise to the
Europe’s leading families, Government and various corporations for the
last ‘7’ generations.

The Axis Bank 5th largest bank by market capitalization in India

provides payroll services to over 12000 corporates across 2.8 million
salary accounts. The market capitalization of Axis Bank was 235
million in the last year 2007 is engaged in the business of Wealth
management, with its international presence in Dubai, Singapore Hong
Kong, Shanghai and so on.
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Asset Size

Rs.181.20 Cr.
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Procedure for entertaining a client in AXIS BANK

1. Any customer who has a portfolio having more than 30 lakhs can
request for wealth management services at any branch of Axis
Bank.
2. After the request of customer the wealth mangment relationship
manager will meet the customer and make a view about his risk
taking ability according to his current financial position and
future needs.
3. The customer has to fill a risk profilier form,details of which is
interpreted in a software called “mohar” by which the analyst will
come to know the actual risk taking ability of customer.
4. Documentation :- The customer has to make available the
following documents to the Bank :-

a. Pan card Copy

b. 8 Photographs

c. One Address Proof

5. The client has to open four accounts with the Axis Bank :-

a. Wealth Saving Account :- This account is used to park all

the money of the customer which must be 30 lakhs or
more than that .

b. Demat Account :- This is used to park all the assets in

electronic form of the customer .
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c. Trading Account :- This account is used to buy or

purachase the asset in a electronic way.

d. Wealth Account :- This account is opened in the mohar

software to handle the portfolio of the customer.

6. The whole 30 lakh or more is not invested in a lumpsum but it is

invested in trenches in a period of 4 months.

7. The service provided by the Axis Bank is a Non- Discretionary

type of service, in which the decision of investing money is taken
with customer recommendation.

8. All the transaction done for the customer either sell or purchase
of the asset classes is done fully electronically through “Mohar”
software.

9.Charges :- 1% Annual Charges on equity portfoilio + 0.75 %

brokerage either sell or buy .

No charges on mutual fund portfolio .(Asset management

Companies gives 2.5% commission to Axis Bank on investing client
money in their mutual fund. )

Asset management Companies charges 2.25 % only on purchase of

mutual fund directly to the customer without any involvement of
the Axis Bank.
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Coustmer Profiling at Axis Bank

Based on different financial needs an average life cycle has been

divided into 4 stages of Financial Planning as given below.

 Upto 30 years of age

 30-45 years of age
 45-60 years of age
 over 60 years

• Upto 30 years of age

 General Profile :-
 Out of college/Professional Course.
 Junior or Mid level employment.
 Have had an average work life of 5-8 yrs.
 Unmarried or recently married.
 Small family.
 Nuclear family / Joint family.

 General Characterstics :-

 Salary surpluses,especially if single or DINK.

 Minimal family responsibilities
 Propensity to spend/overspend
 Find investment/saving as Boring & waste of time.
 Lack of inclination to invest.
 Lack of proper information on investment.
 Do not need regular income from investment.
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 Investment Needs :-

 Repayment of professional studies loan.

 Plan for tax.
 Saving for white goods/new vechile.
 Biggest need is to save enough for a down payment for
a house.
 Start to build an emergency fund.

 Recommendation :-
 Negotiate tax-efficient salary.
 Budget and keep track of expenses.
 Use credit card prudently.
 Save regularly and consciously.

 Recommended Investment Style :-

 Should be an aggressive investor.

 Should focus on long term capital growth rather than
short term capital preservation.
 Have a long term investment horizon,as a balance of
productive working life is high.
 Can invest in high risk, high gain products
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Recommended distribution of asset :-

90 % investments in equity.

10 % investment in debt.

 Should start SIP or recurring deposit through auto debit

facilities to ensure disciplined and compulsory savings.
 Should start planning for or at least start thinking about
retirement.
 Product Recommendations :-

 If salaried, approximately 24% of basic is necessarily

invested in PF and can be supplemented with NSC &
PPF.
 If self employed/professional, should start a
PPF/Pension plan investment to provide for retrials.
 Invest part of the surplus marked for equity
investment , in equity oriented funds like :
o Diversified equity funds(60%)
o Sector funds(10%)
o Tax saving funds(20%)
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• Between 30-45 yrs :-

 General profile :-

 Married ,usally with children

 Middle to senior level employees.
 Have had an average work life of 10-15 yrs.
 May have dependent parents
 Usually a personal vehicle owner.
 Already invested in a home/seriously thinking of
investing in a home.

General Characteristics :-

 Surplus funds are limited.

 Lifestyle expenses go up
 Children need/expenditure is of prime importance.
 Household expenses are gradually increasing
 Realize the need for investment planning but lack
time for investment planning.

 Investment Needs :-
 Shelter income from taxes.
 Plan for children’s higher education
 Start to build capital for retirement ,if not started
already.
 Maintain an emergency fund & keep adding to it.
 Buy a home/service a home loan.
 Save for holidays/recreation.
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 Recommended Investment Style :-

 Can take medium to high risk.

 Should continue to focus on capital growth.
 Investment horizon is still more than 5 yrs.
 Follow thumb rule of 100 less your age in years as
percentage of savings to be invested in equity.
 Upto 60% of surplus funds can be invested in equities.
 15% of surplus funds in liquid funds.
 25% in Bonds/PPF/NSC.
 Product Recommendations :-
 Diversified equity funds,more tilted towards large caps
for capital growth for retirement or seed money for
home loan.
 Build up a direct equity.
 Invest in children specific mutual funds to provide for
children’s higher education needs .
 NSC and PPF to balance investments in equity.
 Tax efficient saving through ELSS.
 Keep adding to short term floating rate funds and
bank FD’s for emergency fund.
 Get medical insurance for your dependent parents.
 Get household contents insured.
 Get a life insurance against your home loan.
 Get an accident insurance against any disabilities.

• Between 45-60 yrs.

 General Profile :-
 Usually at the peak of carrer
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 Grown up children.
 May need take care of dependent children.
 Retirement is not very distant.
 Could opt for VRS.
 May have a inherited portfolio of investments from
parents.
 General Characterstics :-
 surplus fund higher than in previous life stage.
 High outgo on household expenses.
 Childrens expenses continue to increase.
 Life style expenses still high.
 2-3 major oputflows of money (overseas
education/marriage/set up business).
 High liquidity is a must.
 Sensitized to medical and retirement needs.
 Recommendations :-
 Decide when to reire.
 Acquire all necessary consumer durables while still to
plug future outflows.
 Consolidate and continue with wealth creation
 Start de-riskiking yoyr portfolio.
 Revisit and revise financial goals.
 Rebalance your portfolio as per future needs.
 Medical insurance a must.
 Pension plans must be started if not done already.
 Prepare a will.
 Recommended Investment Style :-
 Greater vunerability to risk hence focus on moderate
balanced growth.
 Shift focus from capital growth to capital preservation.
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 Investment time horizon comes down.

 Turning point as investment debt now outpaces
investment in equity.
 Up to 40% of surplus funds in equity.
 Up to 60 % of surplus funds in debt.
 Product recommendation :-

 Prepay or finish all loans by 55 years of age.

 Invest in balanced funds or MIP’s
 Phase out high risk sector funds gradually.
 Keep investment in well-diversified large cap funds.
 Investment in debt should be around NSC & Bonds.
 Short term deposits and floating rate funds,along with
cash or liquid funds should be maintained for liquidity.
 Consolidate direct equity portfolio:gradually move part
of it to high divinded yield stocks.
 Keep all surplus funds in liquid/floater funds.

• Above 60 years of age

 General profile
 Retired/working part time
 Living in self owned house.
 Children may be living separately.
 Dependent parents,needing medical attention,may be
part of family.
 Could have grand children.
 Have more leisure time.
 General Characteristics
 Income from existing investments,usally the only
source of regular income.
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 Surplus funds usually not available for additional

investments.
 Capital preservation is the primary need.
 High life expectancy hence present capital has to
stretch over a long time.
 Life style expenses go down.
 Medical expenses go up.
 Investment needs.
 Regular income needed from investments.
 Emergency funds for medical etc.
 to be liquid and high.
 Preservation of wealth.
 Money for traveling/gifts.
 Need funds to pursue hobbies to keep busy.
 Recommendation

 Monitor expenses to fit into the retirement income.

 Ensure tax efficiency of returns on investments
 Explore second careers/part time employment.
 Check excess liquidity as it needs to reduced returns
on investments.
 Too much cash should not be kept with oneself in the
house,as it may be a risk.
 Do maximum purchase transaction through debit
cards to avoid the needs of cash withdrawls.
 Recommended investment style
 Most chaleenging phase of life.
 Capital preservation of utmost importance.
 Low risk appetite.
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 Income generation & consumption phase of

investment.
 Investment horizon low.
 Maximum 15% equity exposure.
 Product Recommendations
 Invest in MIP’s and balanced equity funds.
 Senior citizen’s saving schemes.
 Post office monthly schemes.
 FD’s with monthly schemes.
 RBI Bond
 Continue with direct equity portfolio with high dividend
yield stocks.
 Avail all possible tax breaks available to senior citizens
 Switch some investments from equity to debt and
money market products.
 Go for systematic withdrawls plans(reverse of SIP).
 Growth portion of portfolio should be reduced to
maintain only enough amount.
 Silver health mediclaim.
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WEALTH MANAGEMENT : INDIAN CONCERN

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Position of India in Wealth Management

The wealth management industry in India is experiencing an

evolutionary phase of development, according to Celent. With the
liberalization of the Indian economy and subsequent growth and
prosperity across sectors, the wealth management industry is poised
to gain greater traction. Celent segments the Indian wealth
management market and looks at trends and opportunities at the
provider end.

According to the report, India is slated to become a US$1 trillion

market (in assets under management) for wealth management
providers by 2012, with a target market size of 42 million households

In the annual survey done by Cap Gemini, SA and Merrill Lynch it was
found that ranks of millionaires grew 6% in the previous year, because
the number of richer people grew in India & China where India is
competing China. India & China posted the biggest gain in millionaires
advancing by 23% & 20% respectively.

When They are watching the world wide increase in number of

millionaires the facts collected by Cap Gemini, S.A. and Merrill Lynch
survey report. India has 23% growth in the last year. The biggest
Asian economy China stands on second position with 20%, west Asia
16%, United States 4% and United Kingdom (UK) 2%. So They can
understand that there is more opportunities in the Wealth
management business in Asia specially in India.

Risk aversion of Indian customers

The repercussions of the mutual fund scandal of the 1990s are still
evident. Many Indian retail customers averse to diversifying their asset
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base into higher risk classes. To account for this conservative

tendency, PFS offerings can be tailored to emphasize the value of a
lower-risk investing approach.

“New money” mass affluent customers are not accustomed to

Wealth management. Most customers are used to obtaining
financial services on an as needed basis without much regard
to a full view of their financial Well-being. As
part of the opportunity to define and develop offerings for
India’s emerging HNW population, customers may need an
introduction to the concept of private banking (or Wealth
management).
Shortage of skilled personal financial advisors. To date, the
PFS opportunity has been limited to a very small segment of
the population, so domestic banks have not generally
developed expertise in comprehensive personal financial
management. Global banks can take advantage of this gap by
leveraging advisory competencies that they have cultivated in
other markets, importing that expertise into the Indian market.
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Southern Asia :-INDIA,SRILANKA

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WEALTH MANAGEMENT ON GLOBAL

PRESPECTIVE

Wealth managers and private banks are anticipating unprecedented

growth over the next three years, according to the latest findings from
PricewaterhouseCoopers 2007 Global Private Banking/Wealth
Management Survey, with chief executives predicting that, on average,
their assets under management will increase at a staggering rate of
30% per annum.

The survey, which captured the views of senior executives of 265

organisations within the global private banking and wealth
management industry, highlighted that markets in Asia Pacific and
Eastern Europe are expanding the fastest, as organisations rush to
service the new wealth creators in these regions. In Asia Pacific, CEOs
expect their organisations’ assets under management to grow at an
annual rate of 34%. CEOs’ plans for growth include entry into these
lucrative markets, including by acquisition. Almost 90% of CEOs feel
that there will be at least some, if not significant, consolidation in the
industry and more than 50% of CEOs plan to open operations in new
countries over the next two years to access new clients.

The survey reveals a period of exceptional opportunities for wealth

managers. Buoyed by rising global wealth, wealth managers
everywhere are anticipating extremely high rates of profitable growth
that have not been seen during probably at any other time. The survey
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highlights that this is a time when strategic choices have to be made

by chief executives and finite resources have to be focused on serving
existing clients as well as supporting highly ambitious growth plans.

PricewaterhouseCoopers latest findings also revealed a real

commitment among wealth managers to increase ‘share of wallet’,
compared to previous surveys. Share of wallet has emerged as the
new key performance indicator, globally as well as in emerging
economies like India, as wealth managers seek to become trusted
advisers and gain new clients. Currently under 50% of wealth
managers hold more than 40% of their clients’ investable wealth but
over the next three years this proportion is estimated to increase
dramatically to almost 80% of wealth managers holding over 40% of a
client’s wealth.
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PROJECTIONS
After studying the overall concept of Wealth management we
can say that it has various aspects some are favorable and
friendly for the economy and some are very dangerous for the
economy.

According to World Wealth Report 08- Merrill Lynch, Capgemini

:

The early months of 2008 revealed further complications to the

conditions facing the global economy at the end of 2007,
heightening uncertainty among investors regarding the near-
term global outlook. Deepening credit market woes threaten
growth prospects in key mature markets.
However, still-strong fundamentals in emerging markets are
likely to sustain high levels of growth—a divergence that will
likely impact consumer and business segments and shape
policy choices. The balance between emerging market strength
and mature market recovery is likely to persist through 2008,
with the short-term outlook subject to variability given that
aspects of potential risk may still be unknown.

By and large, the global economy has two distinctive

obstacles to overcome:
• Inhibitors to growth in mature markets.
• High risks of inflation in emerging markets.

These challenges will shape global HNWI growth

prospects going forward.
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Given 2007 performances and taking into consideration recent

developments in world markets, the projection of global HNWI
wealth will grow to US$59.1 trillion by 2012, advancing at a
rate of 7.7% per year.

This projection is based on several factors:

Recent economic downturns in the United States have been
shorter by historical comparison attributed, in part, to
increasingly effective monetary policy. Therefore, the current
complications are not expected to weigh on growth prospects
as heavily as they may have in the past. Similarly, research
suggests that emerging markets’ recoveries have outpaced
analysts expectations. Moreover, as HNWI portfolios continue
to grow more diversified over the long term, spread across
international boundaries and asset classes, their investments
become increasingly mobile.
Thus, as growth in one region or market slows, HNWIs can
move freely, reallocating their funds to other areas, often more
quickly than the troubled market itself can react and recover.
Ultimately, this evolution will make HNWI investments less
vulnerable to market downturns.
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BIBLOGRAPHY

1.Wealth Management July06 private banking poll-r8 report.

2.www.moneycontrol.com.

3.www.google.com.

4.ICICI Prudential Asset Management Report.

5. World Wealth Report 2008 - Merrill Lynch, Capgemini.

6. “Year-End Review of Markets & Finance,” The Wall Street

Journal, January 2, 2008; Russia Trading System,
http://www.rts.ru/en, accessed April 2008.

7. The Economist Intelligence Unit, January 2008.

8. Investment Strategy - No.6 August 2006 Societe Generale Asset

Management.

9.Goldman Sachs Asia Pacific Report.

10. IBM Business Consulting’s Wealth Management Report.

11. Axis Bank Reports.