Karvy Report Bhanu

KARVY STOCK BROKING LTD.
A RESEARCH REPORT ON
TO STUDY THE PERSONAL FINANCIAL PLANNING AND INVESTORS PERCEPTION

INDUSTRIAL GUIDE UMESH KUMAR SINHA TEAM LEADER
Submitted in the partial fulfillment of the requirement of 2 years full time Masters of Business Administration Session 2010 - 2012
Submitted To:
Submitted By:
BHANU PARTAP SINGH ROLL NO. 09, SEM-II, MBA (2010-2012)
DELHI BUSINESS SCHOOL

B-II/ 58, MCIE, Mathura Road, (Near Metro station on Badarpur Border) New Delhi 110044
TABLE OF CONTENT
Chapter No. Title
Acknowledgement Declaration Executive Summary
1. Introduction -Karvy as an organization -Milestone of Karvy -Project description -Objective Review of Literature -Personal Financial Planning -Investment Proposals in India -Mutual Funds - Life Insurance Research Methodology Observations & Analysis Limitations of the study Conclusion Suggestions Bibliography Appendices (Questionnaire)
2.
3. 4. 5. 6. 7. 8. 9.
ACKNOWLEDGEMENT
The project TO STUDY THE PERSONAL FINANCIAL PLANNING AND INVESTORS PERCEPTION is an outcome of my research. For the completion of this project I get an opportunity to express my deep gratitude to all those who helped me in making this report. First of all I would like to thank The Almighty for his blessing for completing this project successfully. I would like to extend my sincere thanks to Mr. UMESH KUMAR SAHANI (Team leader) for providing me articulate guidance and ceaseless encouragement throughout my training. I also appreciate the staff of Karvy for their constant support throughout my stay in Karvy Stock Broking Ltd. Last but not the least, I also express my grateful thanks to respondents for giving their valuable time to make this project to success.
Declaration
I Bhanu Partap Singh, Roll No. 9 , Class IInd semester MBA of the Spring 2010-12 batch hereby declare that the project entitled To Study the Personal Financial Planning and Investors Perception is an original work and the same has not submitted to any other institute for the award of any degree.
Counter Signed
Signature of the Supervisor Signature
Candidate
Forwarded by Director of the College
EXECUTIVE SUMMARY
After studying this report, you will be able to understand how the selection of different type of investment modes is carried out. I have put in my best efforts in this project. The main aim of this report is to highlight the features as: 1. To show the project is developed, i.e. the steps involved in developing the project. 2. The report contains a summary of the analysis of the investment modes, their drawbacks, as well as the details and advantages of investment modes. 3. The report guides investors how to manage their portfolio. 4. The project report contains the investors perception towards different investment modes. 5. Importance of financial planning. In the conclusion this report is a guide to understanding the portfolio management and investment in different areas with investors preference i.e. return, time, investment, risk cover etc.
INTRODUCTION
With India emerging as a strong market, the investments avenues have also increased, to advice our customers the right avenue according to their suitability. "To cater to the unique needs and requirements of the mass affluent by providing complete financial solutions and thereby enabling them to transform their dreams into reality." that is what financial planning has been the one of the important part in investments decisions . In the old days, investment options were limited. The limitation was a result of the predominant role and responsibility assumed by the government in presiding over our financial future. In present time, all that is changing, and changing rapidly. Not only are investment options increasing, the complexity is increasing as market forces come into fuller play. The market is bound to become more complex and investment advice for financial planning (saving) will emerge as a professional activity. Intelligent investor has already emerged as a major instrument of rendering and receiving advice in this respect. The income level of urban and middle class people is increasing and these people are saving part of their income to invest in profitable and safe avenues. Investment is the employment of funds with the aim of achieving additional income or growth in value. The essential quality of an investment is that it involves waiting for a reward. It involves the commitment of resources that have been saved or put away from current consumption in the hope that some benefits will accrue in future. In this study the efforts were made to analyze the personal financial planning, investment avenues available to the customers and to know the factors that they keep in mind while investing. The perception of the customers is to be found from the various investment avenues.
Objectives
Every study has certain objectives and the study is carried out to fulfill those objectives. The objectives of this project To study the Personal Financial Planning and Investors Perception is as follows:
1. To find out the investment proposals available. 2. Find out avenues which best suit persons income for investment 3. To identify factors influencing investment preferences
To determine the safe and secured return investment proposal for customer to recommend
KARVY AS AN ORGANIZATION
KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.
Early Days
The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company. Karvy Consultants Limited. Started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, Karvy used its experience and superlative expertise to go from strength to strength to better services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of Indias premier integrated financial service enterprise. Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And have made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finallytotality in service. KARVY highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for the position of an emerging financial services giant enjoying the confidence and support of an enviable clientele across diverse fields in the financial world. Values and vision of attaining total competence in servicing has served as the building block for creating a great financial enterprise, which stands solid on our fortresses of financial strength - various companies. With the experience of years of holistic financial servicing and years of complete expertise in the industry to look forward to, Karvy now emerged as a premier integrated financial services provider. As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress.
Milestone of Karvy
y y y y y y y y y y y y y y y y y y
INCEPTION Corporate Registry services Stock Broking Financial Product Distribution Corporate Finance Depository Services ITES & BPO Services Personal Finance Advisory Services Secondary Debt & WDM Services Joint Venture with Computer Share Comtrade Karvy Insurance Broking Pvt. Ltd. Karvy Reality Services ltd. and Karvy fortune Barring Asia Ltd. and Karvy Private Wealth Karvy Data Management Services Ltd. And Karvy Financial Services
1979 1985 1990 1993 1995 1997 2000 2001 2003 2004 2004 2005 2007 2008 2009
Part of issue management team in large offerings Averaging around 5% of NSE cash volume Ranked No.1 in IPO distribution More than 500 Branches across country 5 Overseas Branches Entered Commodity trading Equity Derivatives broking commenced Expanding Institutional segment clientele. Setting up of the Research desk and Private Client Group (PCG) at Mumbai
WHERE KARVY STAND IN THE MARKET?
KARVY is a legendary name in financial services, Karvys credit is defined by its mission to succeed, passion for professionalism, excellent work ethics and customer centric values.
Today KARVY is well known as a premier financial services enterprise, offering a broad spectrum of customized services to its clients, both corporate and retail. Services that KARVY constantly upgrade and improve are because of companys skill in leveraging technology. Being one of the most techno-savvy organizations around helps company to deliver even more cost effective financial solutions in the shortest possible time.
What bears ample testimony to Karvys success is the faith reposed in company by valued investors and customers, all across the country. Indeed, with Karvys wide network touching every corner of the country, even the most remote investor can easily access Karvys services and benefit from companys expert advice.
Mission Statement of Karvy

An organization exists to accomplish something or achieve something. The mission statement indicates what an organization wants to achieve. The mission statement may be changed periodically to take advantage of new opportunities or respond to new market conditions. Karvys mission statement is To Bring Industry, Finance and People together. Karvy is work as intermediary between industry and people. Karvy work as investment advisor and helps people to invest their money same way Karvy helps industry in achieving finance from people by issuing shares, debentures, bonds, mutual funds, fixed deposits etc. Companys mission statement is clear and thoughtful which guide geographically dispersed employees to work independently yet collectively towards achieving the organizations goals.
Vision of Karvy
Companys vision is crystal clear and mind frame very directed. To be pioneering financial services company. And continue to grow at a healthy pace, year after year, decade after decade. Companys foray into IT-enabled services and internet business has provided an opportunity to explore new frontiers and business solutions. To build a corporate that sets benchmarks for others to follow.
Karvy Values
Integrity Responsibility Reliability Unity Understanding Excellence Confidentiality
Karvy has adequate internal control systems and procedures commensurate with the size nature of its business. These system and procedures provide reasonable assurance of maintenance of proper accounting records, reliability of financial information, protection of resources and safeguarding of assets against unauthorized use.
Behind the Picture: What Customers matter for KARVY?

Every year with this picture keeping in mind Karvy accelerate with Recovery, Revival and Reappearance. Karvy has started on a strong note with the realization to signal some of the challenges it faced previous year. In a competitive market and a branded business, Karvy need to carefully manage itself to avoid down trading or brand shifts by consumers. . Some competitive advantages are long lasting. These are intangible, difficult to replicate and thus more sustainable. Karvy has focused on some of these to gain competitive advantages. There are: Winning culture and a desire to excel in everything Karvy do. Strong meaningful relationships with Customers along with Strategic Partners in which Karvy operate and above all, its own staff. Karvy value and carefully nurture relationships with customers. Karvy truly believe that more than technological prowess and business process innovations, it is the focus on relationships which has been the corner stone of satisfying and successful presence in India over many years. This has been possible with deep insight of consumer behavior as well as market demand drivers, understanding of the arena where to operate and quality execution all thanks to a greater team that makes this happen. Karvys customers consider themselves part of Karvy family and share their experiences and dreams with other customers and thus Karvy becomes successful not only in relating customers but also gains new customers from satisfied prevailing customers. Karvy want to create a strong emotional bond with new customers promoted by prevailing customers.
Board of Directors
Karvy Consultants Limited Parthasarathy C Yugandhar M Ramakrishna M S Prasad V Potluri Robert Gibson Sanjay Kumar Dhir R Shyamsunder Karvy Securities Limited Yugandhar M Ramakrishna M S Parthasarathy C Ajay Kumar K William Samuel Nicholas Tully Karvy Stock Broking Limited Parthasarathy C Yugandhar M Ramakrishna M S Ajay Kumar K Kutumba Rao V William Samuel Nicholas Tully
KARVY SERVICES AN OVERVIEW
These are some services provided by Karvy Group to its customers :1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Stock broking Demat services Investment product distribution Investment advisory services Corporate finance & Merchant banking Insurance Mutual fund services IT enabled services Registrars & Transfer agents Loans
1. Stock Broking
KARVY is working as Capital Market Intermediaries. Stockbrokers are regulated by SEBI [Stock-brokers and Sub-brokers] Regulations, 1992. The stockbroker is a member of the stock exchange. Stockbrokers are the intermediaries who are allowed to trade in securities on the exchange of which they are members. They buy and sell on their own behalf as well as on behalf of their clients. Stockbrokers expand their business by engaging sub-broker. Subbrokers mean any person not being a member of a stock exchange who acts on behalf of a stock broker as an agent or otherwise for assisting
the investors in buying, selling or dealing in securities through such stock-brokers.
2. Demat Services
Karvy is a depository participant with the National Securities Depository Limited (NSDL) for trading and settlement of dematerialized shares. Depository Participants (DPs) are described as an agent of the depository. They are intermediaries between the depository and the investors. The relationship between the DPs and the depository is Shri Jaysukhlal Vadhar Institute of Management Studies, Jamnagar 13governed by an agreement made between the two under Depositories Act. A DP can offer depository-related services only after obtaining a certificate of registration from SEBI. Since Karvy is also in the broking business, investors who use Karvys depository services get a dual benefit. They can use Karvys brokerage services to execute transactions and Karvys depository services to settle them.
3. Investment Products Distribution

Company is also concern with the distribution of investment products like (a). Fixed Deposit (b). Bonds (c). IPO (a). Fixed Deposit: KARVY is dealer of 34 fixed deposits of various types which includes fixed deposits of Public Sector, Non Banking Finance Companies, Housing Finance Companies and Manufacturing Companies.
(b). Bonds: Karvy is dealer of following bonds RBI Saving Bonds NHB REC
(c). IPO: Company is also provides services related to Initial Public Offer of company. Company provides stationary at the time of IPO as well as provides information to investors regarding IPO and solves their queries.
4. Investment Advisory Services:

This division provides portfolio management services to high net-worth individuals and corporate. The expertise of Karvy in research and stock broking gives it the right perspective to provide investment advisory services. Company provides advisory services to its clients. Financial goal of each individual investor varies according to his dream, ambition and family size and future financial planning for the children & old age pension for self and wife so does the pathway to achieve it. Karvy apply the principles of Financial Planning as both science & art, it understands the time horizon, risk bearing capacity and investment goals of investors keeping in mind their psyche and financial needs. Based upon this Karvy helps individual investors to plan their entire life up to retirement, Taxes, Insurance needs and other important personal financial goals. It designs portfolio for investor to invest their saving in various financial products like shares, bonds, debentures, mutual funds, fixed deposits, insurance etc., Company design portfolio by considering following factors. Investors requirement of getting money back, Investors willingness to take risk, Investors tax planning etc.
5. Corporate finance & Merchant banking:

Corporate finance is the financial activity of corporation. It deals with the firm's operations with regard to investing and financing. It concerned with how firms raise capital and the consequences of alternative methods of raising capital. Firms capital can be raised by raising loans, issuing shares, and acquiring or merging with other businesses by public or private companies. Merchant banking is a financial intermediation that matches entities that needs capital and those that have capital. Hence they facilitate the flow of capital in the market. Karvy enjoys SEBI category (I) authorization for Merchant Banking. Karvy offers the full spectrum of Merchant Banking Services, beginning from identifying the best time for an issue to final stage of marketing it, to harvest unparalleled success. As a merchant banker Karvy offer following services: Issue management Instrument designing Pricing of the issue Registration process for the issue of shares Marketing efforts Final allotment to investors Listing details on stock exchanges Loan syndication Lease financing Corporate advisory services Underwriting Portfolio management
6. Insurance:
Karvy is also dealer of many private life insurance companies. Company is associated with dealing of following companies. ICICI Prudential Life Insurance HDFC Life Insurance TATA AIG Life Insurance
7. Mutual Fund Services:

Since its inception in 1982, Karvy has demonstrated a dedication coupled with dynamism that has inspired trust from various segments corporate, government bodies and individuals. Karvy has since been performing a pivotal role as the intermediary the interface between these players.
With Mutual Funds emerging as a distinct asset class, Karvy has made a strategic choice to leverage the power of latest technology to provide a cutting edge to its services. Karvy, today, service nearly 80% of the asset management companies (AMCs) across an extensive network of service centers with assets under service in excess of Rs.10,000 crores.
Karvy's ability to mass customize and offer a diverse range of products for a diverse range of customers has helped mutual fund companies to uniquely position themselves in the market place. These diverse range of services cut across multiple delivery channels
service centers, web, mobile phones, call center has brought home the benefits of technology to investors, distributors, and the mutual funds. Going forward, Karvy shall strive to create new products and services, this would address the needs of the end customer. Companys single minded focus in delivering products for customers has given it the distinguished position of being the preferred provider of financial services in the country.
List of Mutual Fund Clients of KARVY:
1Alliance Mutual Fund 2 Birla Mutual Fund 3 Bank of Baroda Mutual Fund 4 Can Bank Mutual Fund 5 Chola Mutual Fund 6 Deutsche Mutual Fund 7 DSP Merrill Lynch Mutual Fund 8 Franklin Templeton Investments 9 GIC Mutual Fund 10 HDFC Mutual Fund 11 HSBC Mutual Fund 12 IL & FS Mutual Fund 13 JM Mutual Fund 14 Kotak Mutual Fund 15L IC Mutual Fund 16 Punjab National Bank Mutual Fund
17 prudential ICICI Mutual Fund 18 principal Mutual Fund 19 reliance Mutual Fund 20 state Bank of India Mutual Fund 21 standard Chartered Mutual Fund 22s undaram Mutual Fund 23 UN F&C Mutual Fund 24 tata Mutual Fund
8.Income Tax enabled services:

Karvy has been started this service since March, 2004. Karvy is work as TIN Facilitation Centre it provides following IT enabled services. a. Distribution of PAN Card. b. Distribution of TAN Card. c. Services related to e-TDS.
Karvy work as an intermediary between NSDL and IT payers. Karvy provides various form for different IT enabled services and guide people to fill that forms. It also solves queries of the tax payers. It also distributes PAN and TAN card to the tax payers.
9.Registrars & Transfer agents:

In 1985, Karvy entered the Registrar and Share Transfer Business to create a market niche in the competitive field of financial services. In 1994-95, it reached a milestone when it processed 104 Public Issues constituting 46 per cent market share. Now in its second decade of existence, Karvy is the leader in the industry: In an opinion poll conducted by an independent market research agency - MARG, Karvy has been rated as Indias Most Admired Registrar on various parameters: Overall Excellence. Handling of Volumes Timely Dispatch Quality Management and Technological Up gradation. A SEBI Category 1 Registrar, So far, Karvy has handled over 675 ISSUES as Registrars to public issues processed over 52 million applications and is servicing over 16 million investors from various locations spread over 205 clients.
10.Loan:
Karvy has recently started this service at selected branches of metro cities. This service has not been started in Saurashtra-Kucch region. Karvy provides loans for following. Vehicle Loan Home Loan Personal Loan
MARKETING STRATEGY OF KARVY
Market Positioning:
Market positioning statements of Karvy are At Karvy we give you single window service and We also ensure your comfort. So, Karvy focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. At Karvy a person can purchase or sell shares, debentures etc. and at the same place also demat it. Karvy also provides other investment option to the same person at same place like Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in designing his portfolio. By this way Karvy provides comfort to its customers. Karvy is also positioned according to Ries and Trout. Karvy is promoted as a no. 1 investment product distributor and R & T agent of India.
Target Market:
Karvy uses demographic segmentation strategy and segment people based on their occupation. Karvy uses selective specialization strategy for market targeting. Target person for the Karvy Stock Broking and Karvy Investment Service is persons who can work as sub-broker for the companies. Companies focus on Advisors of Insurance and post office, Tax consultants and CAs for making sub-broker.
Marketing channel System:

Karvy uses one level marketing channel for investment product distribution. Sub-brokers work as intermediary between consumer and company. Company has both forward and backward flow of activity through channel. Company distributes stationery, brokerage, and information forward to its sub-broker. The sub-brokers send filled forms, queries, amount of investment etc. back to the company.
Training Channel Members:

Karvy provides training to the sub-brokers because they will be viewed as the company by the investors. The executives of Karvy explain various new schemes of investment to the sub-brokers with its objective, risk factors and expected return. Company also periodically arrange seminar to guide sub-brokers.
Advertising and Promotion:

The objective of advertising of Karvy is to create awareness about services of Karvy among investors and sub-brokers and increase sub-brokers of Karvy. Company doesnt give advertisement in media like TV, Newspapers, and Magazines etc. Karvys advertisement is made indirectly by the companies associate with it. Karvy is R & T agent of around 700 companies. They publish name, address and logo of Karvy on their annual report. Karvy also publish its weekly Stock Market Newsletter Karvy Bazaar Baatein and monthly magazine The Finapolis to guide investors and sub-brokers about market.
Achievements of Karvy:
Largest mobilizer of funds as per PRIME DATABASE First ISO - 9002 Certified Registrar in India A Category- I Merchant banker A Category- I Registrar to Public Issues Ranked as "The Most Admired Registrar by MARG Handled the largest- ever Public Issue - IDBI Strategic tie-up with Jardine Fleming India Securities Ltd Handled over 500 Public issues as Registrars Handling the Reliance Account which accounts for nearly 10 million account holders First Depository Participant from Andhra Pradesh
SWOT ANALYSIS OF KARVY
Strengths:
Employees are highly empowered. Strong Communication Network. Good co-operation between employees. Number 1 Registrar and Transfer agent in India. Number 1 dealer of Investment Products in India.
Weaknesses:
High Employee Turnover.
Opportunity:
Increasing awareness about share market investment.. Marketing at rural and semi-urban areas.
Threats:
Increasing number of local players. Past image of Share market.
PRODUCT FEATURES
The major product of Karvy Stock Broking ltd. is I-Zone (investment zone) and main features of I-Zone are : D-Mat account Trading account Mutual funds Bonds Insurance IPO Loan against securities Margin funding up to 70% and in IPO up to 90% SMS alert Monthly statement Magazine- Karvy The Finapolis Multiple Bank Gateway (HDFC,ICICI,IDBI,AXIS,BANK OF INDIA) Free Software- GOTX
ADVANTAGES OF I-ZONE
Advisory services with a comprehensive online investment platform. Free financial advice on portfolio allocation in various asset classes. Free online stock broking and attractive margin finding options.* Daily equity market research report and calls through sms. Life time free D-mat account. Free mutual transactions to an unlimited extent, including unlimited SIP transactions. Access research reports on mutual funds, IPOs and Insurance. # Free online commodities broking account. ** Application in IPOs with attractive loan options for applications. Regular portfolio statement for better planned future investment. Loan against securities.*
*karvy financial services. **Through Karvy comtrade. #Through Karvy insurance broking
LITRATURE REVIEW
PERSONAL FINANCIAL PLANNING
FUNDAMENTALS OF FINANCIAL PLANNING Financial planning is an ongoing process for an individual. It is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your child's education or planning for retirement. A person may start it at an early age and carry it forward through his life with changes to suit his changing goals and needs. Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. Financial Planning can take a "big picture" view of our financial situation and make financial planning recommendations that are right for us. The financial planning can look at all of our needs including budgeting and saving, taxes, investments, insurance and retirement planning. Financial Planning is very important to achieve your financial goals which take different faces in ones life. Financial goals can vary from buying a house to buying crockery, buying car to buying seat covers and also from planning for children's expenses to buying their uniform and stationery. Financial planning is a process that helps a person work out where he or she is now, what he/she may need in the future and what he/she must do to reach the defined goals. The process involves gathering relevant financial information, setting life goals, examining the persons current financial status and coming up with a strategy or plan for how the person can meet his/her goals given the persons current situation and future plans. The objective of financial planning is to ensure that the right amount of money is available in the right hands at the right point in the future to achieve and individuals financial goals.
Process of Financial planning

Financial Planning is the overall process of advising clients on how to achieve their financial goals. Financial Goals and Objectives refer to all goals and needs of a client which have a monetary aspect to them. These are best defined when money amount and the time frame are both clearly stated. Asset Allocation: The allocations of a clients investments at a broad level across various asset classes, which include hard assets (real estate, jewellery, etc.) and financial assets. Risk Allocation: The extent of loss in value that a client can tolerate, psychologically and financially and for how long they can withstand such declines in value. Financial Plan: A document that details clearly in writing the financial goals, available resources, time frame for investment, asset allocation, specific investment, etc. Portfolio Rebalancing: The process of making changes to the asset allocation and specific investment to ensure that the clients investment strategy stays consistent and current with changes in their needs, financial situation and market conditions.
Types of Financial Goals

After the above discussion, the next most important element in financial planning is to understand the various types of financial goals and how to use them in practice.
y
Long-term goals
Long-term financial goals represent the long-term requirements of an individual. Long-term goals may extend beyond a period of six years. The time period should not be so long that the goals become unrealistic to achieve. It is possible that goals change over a period of time and thus need to be revised on a regular basis. The following table describes an individual's long-term goals:
Short-term goals
Short-term goals are for a period of one year or less. They are immediate goals in the form of expenses in the current period, such as education expenses for a child newly admitted in nursery school. To attain long-term goals, it is essential to attain current short-term goals. The short-term goals also
provide for the surplus required for savings, which are crucial for long-term goals. The following table provides a description of a person's short-term goals.
y
Intermediate goals
Intermediate goals fill up the gap between the short-term and long-term goals. They are generally spread over a period of two to five years. The following table describes an individual's intermediate goals: It is always advisable to prioritize these goals on the basis of the urgency in fulfilling them. By doing so, an individual will be able to identify the goals that he/she has to concentrate on immediately and which of them can be deferred for some time.
Importance of Financial Planning

Financial planning is very important for each and every body who earns. When it comes to money the question of managing them efficiently comes along. Financial planning is about efficiently managing ones finances. Everyone has few goals or dreams in their lives, to fulfill them on time it is very important to manage your finances. However it is by and large understood that financial planning is the Rich's shoes, but in fact it is all the more important for the middle income group. "It's not for the well-to-do; it's how you become well-to-do." As India is a growing economy, the problem of understanding the various investment options are also growing. Also attached is the problem of understanding the risk return trade off is important. On these lines we can discuss these few importance of financial planning for any investor or for that matter saver.

Financial planning provides direction and meaning to your financial decisions.
It allows you to understand how each financial decision you make, affects other areas of your finances. For example, buying a particular investment product might help you pay off your debts faster or it might enhance your goal of buying a car by a year or two.
By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals.
You can also adapt more easily to life changes and feel more secure that your goals are on track.
How can Financial Planning be done?

Financial planning is very technical and conceptual process. Some personal finance software packages, magazines or self-help books can help you do your own financial planning. However, you may decide to seek help from a professional financial planner if: You need expertise you don't possess in certain areas of your finances. For example, a planner can help you evaluate the level of risk in your investment portfolio or adjust your retirement plan due to changing family circumstances. You want to get a professional opinion about the financial plan you developed for yourself. You don't feel you have the time to spare to do your own financial planning. You have an immediate need or unexpected life event such as a birth, inheritance or major illness. You feel that a professional adviser could help you improve on how you are currently managing your finances. You know that you need to improve your current financial situation but don't know where to start.
Steps in Financial Planning

However Financial Planning is a very specialized process. It is also governed by lots of bodies. Therefore it follows a standard process as prescribed by the Financial Planning Board. The Financial Planning Process consists of the following six steps: 1. Establishing and defining the client-planner relationship. The financial planner should clearly explain or document the services to be provided to you and define both his and your responsibilities. The planner should explain fully how he will be paid and by whom. You and the planner should agree on how long the professional relationship should last and on how decisions will be made. 2. Gathering client data, including goals. The financial planner should ask for information about your financial situation. You and the planner should mutually define your personal and financial goals, understand your time frame for results and discuss, if relevant, how you feel about risk. The financial planner should gather all the necessary documents before giving you the advice you need. 3. Analyzing and evaluating your financial status. The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. Depending on what services you have asked for, this could include analyzing your assets, liabilities and cash flow, current insurance coverage, investments or tax strategies. 4. Developing and presenting financial planning recommendations and/or alternatives. The financial planner should offer financial planning recommendations that address your goals, based on the information you provide. The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. The planner should also listen to your concerns and revise the recommendations as appropriate.
5. Implementing the financial planning recommendations. You and the planner should agree on how the recommendations will be carried out. The planner may carry out the recommendations or serve as your "coach," coordinating the whole process with you and other professionals such as attorneys or stockbrokers. 6. Monitoring the financial planning recommendations. You and the planner should agree on who will monitor your progress towards your goals. If the planner is in charge of the process, she should report to you periodically to review your situation and adjust the recommendations, if needed, as your life changes.
Investment proposals in India

Investment is the employment of funds with the aim of achieving additional income or growth in value. The essential quality of an investment is that it involves waiting for a reward. It involves the commitment of resources that have been saved or put away from current consumption in the hope that some benefits will accrue in future. As a part of investments proposals in India there are several prospects by which customer could look for investment criteria which are as follows
y y y y y y y y
Investment management Investment advice Tax planning Tax preparation Retirement planning Planning for life, long term care insurance advice Planning for other financial goals Estate planning
The aspect which customer consider while investing into these proposals are
y y y y
Safety Return Time Period liquidity
Various Proposals of investment on which study is to be carried out are as follows

y y y y y y y
Mutual funds Life insurance Post office schemes Public provident fund National saving certificates Bank Fixed Deposits Deposit Scheme For Retiring Government Employees
MUTUAL FUNDS History on mutual funds

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank the. The history of mutual funds in India can be broadly divided into four distinct phases
First Phase 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of
RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. Second Phase 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47,004 crores. Third Phase 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes. Mutual Funds in India Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen down and are generally below the inflation rate. Therefore, keeping large amounts of money in bank is not a wise option, as in real terms the value of money decreases over a period of time. One of the options is to invest the money in stock market. But a common investor is not informed and competent enough to understand the intricacies of stock market. This is where mutual funds come to the rescue. A mutual fund is a group of investors operating through a fund manager to purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost efficient and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. Also, one doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of mutual funds is diversification. Diversification means spreading out money across many different types of investments. When one investment is down another might be up. Diversification of investment holdings reduces the risk tremendously.
Objectives of Mutual Funds 1. Income. Income funds focus on dividends and interest that provide income to investors. This is a relatively steady source of money, but the funds NAV can still go up and down. 2. Growth. Growth funds focus on increasing the value of the principal or amount invested through capital gains and net asset values. Growth funds are usually more risky but offer greater potential return. 3. Stability. Stability funds focus on protecting the amount invested from loss so the funds NAV does not go down. This is the least risky type of fund but may make the least amount of money. Types of Mutual Fund Schemes Mutual fund schemes may be classified on the basis of its structure and its investment objective. By Structure Open-end Funds An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Closed-end Funds A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.
Interval Funds Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices. By Investment Objective Growth Funds The aim of growth funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities. It has been proved that returns from stocks, have outperformed most other kind of investments held over the long term. Growth schemes are ideal for investors having a long term outlook seeking growth over a period of time. Income Funds The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures and Government securities. Income Funds are ideal for capital stability and regular income. Balanced Funds The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These are ideal for investors looking for a combination of income and moderate growth. Money Market Funds The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer shortterm instruments such as treasury bills, certificates of deposit, commercial
paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods.
Gilt Fund These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. Index Funds Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges. Other Schemes Tax Saving Schemes These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EC by investing in Mutual Funds.
Special Schemes
y
Industry Specific Schemes
Industry Specific Schemes invest only in the industries specified in the offer document. The investment of these funds is limited to specific industries like Infotech, FMCG, Pharmaceuticals etc.
y
Index Schemes
Index Funds attempt to replicate the performance of a particular index such as the BSE Sensex or the NSE 50 Sectoral Schemes
Sectoral Funds are those which invest exclusively in a specified sector. This could be an industry or a group of industries or various segments such as 'A' Group shares or initial public offerings.
Benefits of Investing in Mutual Funds

Professional Management Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. Diversification Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. Convenient Administration Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with
brokers and companies. Mutual Funds save your time and make investing easy and convenient. Return Potential Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Low Costs Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. Liquidity In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes, the units can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund. Transparency You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. Flexibility Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. Affordability Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy.
Choice of Schemes Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. Well Regulated All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.
Indian Mutual Fund Industry

Mutual funds are no longer looked down upon but seen as a healthy investment option and in April 07 total investment in 33 funds crossed Rs 3.5 lakh crore, an industry official has said. Also, the risk appetite is growing with burgeoning young middle class, making mutual funds a preferred option compared to small saving schemes that is considered safe but give low returns. "Main reason for the growth in assets of mutual funds is awareness which is increasing day by day and the returns they are giving," "MFs are increasingly being recognised by households, in order to maximize returns," he said. Total AUM as on April 30 was Rs 3,50,441 crore as compared to Rs 3,26,388 crore a month ago.
In March 2007, Foreign Institutional Investors (FIIs) were net buyers of equities with purchases of Rs 14,033 m (as on March 30, 2007). On the contrary mutual funds were net sellers to the tune of Rs 20,275 m. These are only some of the statistics that show that the Indian mutual funds industry is still in its infancy. It is important to study the present industry scenario to gain a better
Understanding of the impediments to the growth of the industry:

Lack of Investor Awareness: Retail investors had a wrong notion about mutual funds as an investment avenue. The benefits of risk diversification, professional management and ease of administration involved while investing in mutual funds are not clearly understood. Knowledge of financial products is ingrained in school and college curriculum in countries like UK, US and France. Investor Risk Appetite: Equity funds account for 30% of the total AUM in India. This figure is more than 50% in most developed countries. Frequent stock market scams and the bust of tech sector specific MFs have contributed to this apprehension. The growth in mutual funds has come through the growth in investments in short term instrument like Money Market Mutual Funds which account for 40% of AUM. Higher Returns of Alternative Debt Instruments: Government guaranteed schemes provide risk free returns at competitive rates of returns. This is why mutual funds have difficulty competing retail business. Concentration of Corporate Investors: Mutual funds have become overly attractive to corporate investors because of higher returns than bank deposits and ability to distribute capital gains tax. Corporate investors account for 57% of the AUM (by value). Though the turnover rates have increased the average fund in management has grown by only 25% in the past 4 years. It is clear that the lack of growth in funds under management in India is because of the absence of long term investors. Corporate investors take profits frequently resulting in destruction in the compound growth in funds under management. Distributors are forced to pass on more commissions to companies, while fund companies are compelled to offer funds with wafer thin margins. Retail investors lose out in the sense that they continue to pay higher expenses. Distribution: One of the major factors impacting the growth of mutual fund industry is the absence of any regulation in distribution of mutual
funds. Mutual fund investors need distributors who are able to inform them about the efficacy of distribution product for a particular risk profile and stage in life cycle. Lack of distributor awareness and the absence of any disclosures from distributors make miss selling of MF products common place. Also penetration in rural areas is a problem. Only 3% of rural house holds own mutual funds. For mutual funds to set up a distribution network in these centers can be very expensive.
Current Scenario
Since private players were allowed in 1993, the Indian Mutual fund industry has witnessed a sea change in the way it operates, in the regulatory and investor attitude towards Mutual fund products. From a single player in 1987 today there are 29 mutual funds offering as many as 477 schemes. The total assets under management have risen to Rs 334563 crores. However, the accolades regarding the growth of the MF industry should be reserved until this growth is analyzed taking the MF industry in other developed countries in consideration. Here are certain statistics that reflect that Indian Mutual fund industry still has a long way to go when compared to global standards: AUM as a Percentage of GDP: In most of the developed countries the total assets under management ranges from 30% -60% of the GDP. Total assets under management are only 8% of the GDP in case of India. Penetration of Mutual funds: In India it is estimated that 6.7% of the households hold mutual funds. This figure is close to 50% in case of the US and 17% in case of UK. Mutual funds account for only 0.73% of total financial assets in India (11% of bank deposits). AUM for Mutual funds had exceeded the bank deposits in US in as early as 1998. These are only some of the statistics that show that the Indian mutual funds industry is still in its infancy. It is important to study the present industry scenario to gain a better understanding of the impediments to the growth of the industry: Lack of Investor Awareness: Retail investors had a wrong notion about mutual funds as an investment avenue. The benefits of risk diversification, professional management and ease of administration involved while investing in mutual funds are not clearly understood. Knowledge of financial products is ingrained in school and college curriculum in countries like UK, US and France.
Investor Risk Appetite: Equity funds account for 30% of the total AUM in India. This figure is more than 50% in most developed countries. Frequent stock market scams and the bust of tech sector specific MFs have contributed to this apprehension. The growth in mutual funds has come through the growth in investments in short term instrument like Money Market Mutual Funds which account for 40% of AUM. Higher Returns of Alternative Debt Instruments: Government guaranteed schemes provide risk free returns at competitive rates of returns. This is why mutual funds have difficulty competing retail business. Concentration of Corporate Investors: Mutual funds have become overly attractive to corporate investors because of higher returns than bank deposits and ability to distribute capital gains tax. Corporate investors account for 57% of the AUM (by value). Though the turnover rates have increased the average fund in management has grown by only 25% in the past 4 years. It is clear that the lack of growth in funds under management in India is because of the absence of long term invest ors. Corporate investors take profits frequently resulting in destruction in the compound growth in funds under management. Distributors are forced to pass on more commissions to companies, while fund companies are compelled to offer funds with wafer thin margins. Retail investors lose out in the sense that they continue to pay higher expenses. Distribution: One of the major factors impacting the growth of mutual fund industry is the absence of any regulation in distribution of mutual funds. Mutual fund investors need distributors who are able to inform them about the efficacy of distribution product for a particular risk profile and stage in life cycle. Lack of distributor awareness and the absence of any disclosures from distributors make miss selling of MF products commonplace. Also penetration in rural areas is a problem. Only 3% of rural households own mutual funds. For mutual funds to set up a distribution network in these centers can be very expensive. In many countries, mutual fund industry sees a point of inflection, a point after which the AUM increases spectacularly after a period of sluggish growth. This happened in case of US after 1992-93 when the AUM increased from $1 trillion to $7.3 trillion in 2004. Many studies have revealed that this period of growth corresponds to following factors:
Explosive growth in capital markets A sound system of regulation Increase in investor awareness
Comparison of Indian MF Industry with Global Standards

The first mutual fund was established in the year 1924 in US. Like any other product they went through a life cycle experiencing sluggish growth between 1930 1970's and then witnessed rapid growth from 1990s onwards. The total worldwide AUM was $16.3 Trillion in 2004- 05. A brief comparison of Indian MF industry with Global MF industries (citing examples of US and EU countries) is presented below: Types of Products: Indian funds do not offer products that cater to entire life cycle of an investor. Mutual funds in US offer products that cater to diverse needs of investors ranging from purchase of house, car etc to admission in university. Mutual funds investing in commodities and real estate do not exist in India. An important factor that has led to growth in Mutual fund industry in US is the presence of pension. . As Americans began to pay attention to their own retirement plans through company sponsored retirement schemes, called "401(k)" plans, mutual funds started being looked upon as a smart option. Regulation: The mutual fund industry is one of the most regulated industries in the financial sector. The MF industry in US has been plagued by many scandals and SEC has acted fast to restore investor confidence and trust. Fines to the tune of $1.5 billion have been levied. Though allegations regarding frauds have surfaced in Indian MF industry also SEBI has been quick to investigate and restore confidence. However, certain issues regarding SEBI still exist
Unlike its American counterpart SEBI hasnt been able to formulate regulations to increase the depth of MFs. Regulations regarding the privatization of Pension funds took a long time to come. SEBI hasnt been able to educate investor on the usage of mutual funds as investment options.
Risk Management Techniques: A recent survey by PWC revealed that as many as 50 percent of the respondent mutual funds are not managing risk properly. 50 percent of the respondents did not even have documented risk procedures or dedicated risk managers. Indian Mutual fund industry does not use statistical techniques of risk management but is using diversification effectively within the market limitations. As far as use of derivatives is concerned, they are not presently used because of the low volumes, low liquidity and absence of sufficient hedging products in the market Risk management in US mutual funds is more prevalent with the use of statistical software and the use of VaR approach to risk management. Several fund companies have set up risk control measures internally, but they still have a long way to go in relaying this to clients. Governance: With the recent late trading and market timing scandals in US mutual funds the issue of corporate governance of mutual fund has again gained center stage. There have been allegations of late timing in Indian MFs. The structure of Indian mutual funds is very similar to US mutual fund . SEC (the US MF regulator) requires of the directors to be independent. This proportion is 2/3 in case of India. However, there remain fundamental doubts whether the current governance structure provides institutionally appropriate checks and prevents potential conflict of interest and provide effective fund administration. Currently, a mutual fund is set up in the form of a trust under the Indian Trust Act, which was enacted in 1882 to essentially govern private trusts and charitable institutions. The trust structure has the following difficulties for a mutual fund: The issue of individual versus collective liability of trustees, which has deterred experienced persons from serving as trustees of mutual funds AMC is not subjected to a specific law book and is indirectly regulated by SEBI through trustees. Approval of directors of AMC lies with the trustees and not with SEBI. The study of MF structures of other countries (UK) reveals that there is a scope for simplification of the current structure. Eliminating the sponsor and giving the power to propose the creation of the MF to the asset management company (AMC) could be a possible alternative.
Future Expectations from Indian Mutual Fund Industry

Taking into consideration the above comparison and the current situation prevailing in the capital markets, the realistic expectations from the Indian Mutual fund Industry could be: Increased Penetration: With the proposed opening up of pension funds to the private sector we can expect the penetration levels of MFs to increase in the next few years. Because of their experience in managing MFs the AMCs will play an important role in the management of pension funds. Increased Emphasis on Retail Investors through Supply Chain Innovations: Retail investments less than Rs 10,000 are unprofitable for AMCs. However, certain supply chain innovations and investments in retail infrastructure would lead to increased emphasis on retail investors. Some of the possible innovations can be the use of straight-through processing," an industry buzz phrase for automating mutual fund transactions so that the entire processfrom placing a trade to final settlement-is fast, relatively seamless and less subject to manipulation. Straightforward concept, straight-through processing requires substantial integration and cooperation among members of the mutual fund supply chain. Using IT, members of the mutual fund supply chain can improve efficiency, manage risk and improve regulatory compliance-all critical moves for maintaining investor confidence in mutual funds. As urban markets reach a peak mutual funds would target second rung cities and smaller towns to increase their investor base. Diverse Range of Products: In order to make MFs more acceptable to the retail investor mutual fund industry has to mature to offering comprehensive life cycle financial planning and not products alone. These would include products catering to specific life cycle needs like buying a house, funding college admission etc. With increase in investor awareness many new products would be introduced. Some of them are listed here: derivative based MFs (though a cap on derivative exposure for a sponsor currently exists), commodities and real estate MFs ( appropriate regulation from SEBI in case of real estate pending ), feeder funds, funds of funds, capital protected funds, etc.
Increase in the need for financial advice: As the affluence of Indians increases and the range of financial products available to meet peoples needs expands mortgages, deposits, life products, defined contribution pensions, mutual funds, etc the need for financial advice will increase. Mutual fund distribution will become geared towards providing sound financial advice according to investors risk profile and stage in life cycle.
Life Insurance
Life is very fragile and death is a certainty. We cannot control the uncertainties of life. But, we can cover the risks surrounding us. Life insurance, simply put, is the cover for the risks that we run during our lives. It protects us from the contingencies that could affect us. Life insurance is not for the person who passes away, it for those who survive. It is the responsibility of every bread earner to guard against the events that could affect the family in the unfortunate circumstance of his / her demise. Thus, having a life insurance policy is very vital. Before going for a life insurance policy it is imperative that you know about various types of life insurance policies Endowment Policy, India An endowment policy covers risk for a specified period, at the end of which the sum assured is paid back to the policyholder, along with the bonus accumulated during the term of the policy. An endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Group Insurance, India Group insurance offers life insurance protection under group policies to various groups such as employers-employees, professionals, co-operatives, weaker sections of society, etc. It also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost. Group insurance plans have low premiums. These include employeremployee groups, associations of professionals (such as doctors, lawyers, chartered accountants etc.), members of cooperative banks, welfare funds, credit societies and weaker sections of society.
Joint Life Insurance Policy, India Joint life insurance policies are similar to endowment policies as they too offer maturity benefits to the policyholders, apart from covering risks like all life insurance policies. But joint life policies are categorized separately as they cover two lives simultaneously, thus offering a unique advantage in some cases, notably, for a married couple or for partners in a business firm.. Loan Cover Term Assurance Policy, India Loan cover term assurance policy is an insurance policy, which covers a home loan. Such a policy covers the individual's home loan amount in case of an eventuality. The cover on such a policy keeps reducing with the passage of time as individuals keep paying their EMIs (equated monthly installments) regularly, which reduces the loan amount. This plan provides a lump sum in case of death of the life assured during the term of the plan. The lump sum will be a decreasing percentage of the initial sum assured as per the policy schedule. Since this is a non-participating (without profits) pure risk cover plan, no benefits are payable on survival to the end of the term of the policy. Money Back Policy, India Money back policy provides for periodic payments of partial survival benefits during the term of the policy, as long as the policyholder is alive. They differ from endowment policy in the sense that in endowment policy survival benefits are payable only at the end of the endowment period. An important feature of money back policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. The bonus is also calculated on the full sum assured Pension Plan, India A pension plan or an annuity is an investment that is made either in a single lump sum payment or through installments paid over a certain number of years, in return for a specific sum that is received every year, every half-year or every month, either for life or for a fixed number of years.
Term Life Insurance Policy, India Term life insurance policy covers risk only during the selected term period. If the policyholder survives the term, the risk cover comes to an end. Term life policies are primarily designed to meet the needs of those people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy. Benefits of a term assurance plan The main reason for taking an insurance plan is to provide a suitable financial buffer against contingencies. The existence of term assurance plans is governed by this utility. 1. Death benefit In case of unfortunate death of the policyholder these plans provide the payment of the sum assured to the nominee. Hence, such plans provide financial protection for the family in case of death of the insured person during the term. 2. Low cost risk cover A term plan is the cheapest product available in the insurance industry today. Cost wise, it is the most effective of all insurance plans. 3. Cover against outstanding loans Any term plan can also be used as a cover against outstanding loans and liabilities. In case the person has taken a large number of loans, then the person can take a term assurance plan equal to the amount of the loan so that in case of his death, the insurance company will clear the outstanding liabilities helping the family to become free from the financial burden. Investors Corner 4. Tax benefits of a term assurance plan Premiums paid towards a term assurance plan are eligible for a deduction under section 80C up to a maximum of Rs.1,00,000. The death benefit that will be received under such a policy will also be exempt from tax under section 10(10D) of the Income Tax Act.
Unit Linked Insurance Plans (ULIP)

Unit linked insurance plan (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). The policy value at any time varies according to the value of the underlying assets at the time. ULIP provides multiple benefits to the consumer. The benefits include: Life protection Investment and Savings Flexibility Adjustable Life Cover Investment Options Transparency Options to take additional cover Death due to accident Disability Critical Illness Surgeries Liquidity Tax planning
Whole Life Insurance Policy, India
A whole life policy runs as long as the policyholder is alive. As risk is covered for the entire life of the policyholder, therefore, such policies are known as whole life policies. A simple whole life policy requires the insurer to pay regular premiums throughout the life. In a whole life policy, the insured amount and the bonus is payable only to the nominee of the beneficiary upon the death of the policyholder. There is no survival benefit as the policyholder is not entitled to any money during his / her own lifetime. A whole life plan which covers the individual throughout his life may be highly appropriate in the following cases :-
A young person who is interested in getting a cover for rest of his life A working executive who wants to take advantage of getting a life long insurance cover A person who understands the importance of insurance and believes in securing his future against losses
A person who does not believe in taking up a host of insurance
products, but believes in a one product which provides a comprehensive risk cover, lasting as long as he lives.
PARAMETERS
Risk cover The primary objective of taking an insurance policy is to have a risk cover. Hence, it is important that the sum assured is commensurate with the changing needs and requirements of the individual. Survival benefits A whole life plan is said to be an insurance policy which provides a cover for living too long only because Cash inflows The inflows that the policyholder gets from the policy at regular intervals can be a determining factor while selecting a whole life plan. An example that can be quoted is that Tata AIGs Mahalife pays cash every year in perpetuity from the 10th year of the policy. Cash benefits The bonuses that are payable on the plan are also another feature that needs to be taken into account. Some plans have pay guaranteed bonuses while some other plans provide non-guaranteed bonus payouts after 6 years, while a few others provide such payouts only from the 10th year. Hence, the individual should select that policy which starts the bonus payouts at the earliest so as to benefit from the power of compounding. Flexibility Ultimately, the policy belongs to the individual. Hence, the individual should have the flexibility to select the sum assured, the premium paying term etc. While some plans have the flexibility, some do not offer such flexibility to the individual.
Simplicity While flexibility is indeed important, in case too much of options are given to the policyholder it makes the product more complex. Hence, it is important to strike a via-media to ensure that the product is flexible and at the same time easy for the policyholder to understand. Ever dreamt of a life cover till the age of 80 &beyond? Whole life plan provides just that!
Public Provident Fund,

Popularly known as PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for many of those who do not have any structured pension plan covering them. Public Provident Fund account can be opened at designated post offices throughout the country and at designated branches of Public Sector Banks throughout the country. The account can be opened by an individual in his own name, on behalf of a minor of whom he is a guardian, or by a Hindu Undivided Family. The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
y y y y y
The Scheme is for 15 years. The rate of interest is 8% compounded annually. The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year. One deposit with a minimum amount of Rs.500/- is mandatory in each financial year. The deposit can be in lump sum or in convenient installments, not more than 12 Installments in a year or two installments in a month subject to total deposit of Rs.70,000/-.. The account in which deposits are not made for any reasons is treated as discontinued account and such account can not be closed before maturity.
y y y y y
y y y y y y y y y
The discontinued account can be activated by payment of minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year. . The deposits shall be in multiple of Rs.5/- subject to minimum amount of Rs.500/-. The deposit in a minor account is clubbed with the deposit of the account of the Guardian for the limit of Rs.70,000/-. No age is prescribed for opening a PPF account. Interest is not contractual but rate is notified by Ministry of Finance, Govt. of India, at the end of each year. The facility of first withdrawal in the 7th year of the account subject to a limit of 50% of the amount at credit preceding three year balance. Thereafter one Withdrawal in every year is permissible.. The PPF scheme is operated through Post Office and Nationalized banks. PPF account can be opened either in Post Office or in a Bank. Account is transferable from one Post office to another and from Post office to Bank and from Bank to Post office. Account is transferable from one Bank to another bank as well as within the bank to any branch. Deposits in PPF qualify for rebate under section 80-C of Income Tax Act. The interest on deposits is totally tax free. Deposits are exempt from wealth tax. Nomination facility available. Best for long term investment.
PUBLIC PROVIDENT FUND (PPF) Sl. Name Interest No.of the Scheme PPF 8% 15 years Min: 20% Rebate u/s 88 up to Rs.500 Rs.70000/- & I.T Max: concessions for interest Rs.70000 u/s 10(i)I.T. concession in a year for entire interest amount.
Maturity Period SBI and selected Nationalized Banks
Limit of Deposit
Post Offices
India possesses the largest postal network in the world with 187000 post offices spread all over the country as on March 31, 2006, of which 89 per cent are in the rural sector. Post offices in India play a vital role in the rural areas. They connect these rural areas with the rest of the country and also provide banking facilities in the absence of banks in the rural areas. Post Offices offer various types of accounts. These are:
Post Office Saving Account

y
Minimum amount Rs20/- in case of non- cheque account, Rs.500/- in case of cheque account.
Minimum balance of Rs.500/- is to be maintained for a cheque account.
y y
Account is opened with cash only. Maximum balance permissible Rs. 1,00,000/- in a single account and 2,00,000/- in Joint account.
y y y
Two/Three adults, individuals, minor through guardian. A Minor having 10 years of age can also open an account directly. One individual account and one joint account can only be opened at a post office.
Income tax relief is available on the amount of interest under the provisions of section 80L of Income Tax Act.
Post Office Five Year Recurring Deposit Scheme

a) An account can be opened in multiple of Rs.5 & minimum monthly deposit is Rs 10. b) An account can be opened of any post office & can be transferred from one post office to another anywhere in India.
c) One can open more than one account. d) Nomination facility is available. e) Automatic deductions are made at the source by employer on the consent of the employer through Payroll .M.P.K.B.Y Agent will collect the amount from depositor every month & deposit it in the post office. f) The account can be opened on behalf of a minor & operated either by mother or father. g) One can get rebate rupees one on 6 advance deposits & rupees four on 12 advance deposits of an account of R.10/- denomination. h) An insurance like benefit is available on the Deposits up to denomination of Rs.50/-. i) Account can be continued up to ten years
Post Office Monthly Income Account

Post Office Monthly Income Account is meant for those investors who want to invest a lump sum and earn interest on monthly basis for their livelihood. The scheme is, therefore, a boon for retired persons. The account can be opened by a single adult or 2-3 adults jointly. Maturity period is 6 years.
y y
Minimum investment amount is Rs.1000/- or in multiple thereof. Maximum amount is Rs. 3 lakhs in a single account and Rs. 6 lakhs in a joint account.
y y y y
Premature encashment facility after one year. Interest income is taxable, but no TDS. The Only Post Office scheme where monthly interest is payable. Account can be opened by an individual, two/three adults jointly, and a minor through a guardian.
A minor having attained 10 years of age can open an account in his/her own name directly.
Minors have a separate limit of investment of Rs. 3 lakhs and the same is not clubbed with the limit of guardian.
y y
A separate account is opened for each deposit. Facility of premature closure of account after 1 year to 3 years @ 2.00% discount.
Deduction of 1% if account is closed prematurely at any time after three years.
y y y
Facility of reinvestment on maturity of an account. Interest not withdrawn does not carry any interest. Maturity proceeds not drawn are eligible to earn savings account interest rate for a maximum period of two years..
y y y
Nomination facility is available. Rebate under section 80 C is not admissible. Most suitable scheme for senior citizens and for those who need regular monthly income.
National Savings Certificate

National Savings Certificate, popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safety.
National Savings Certificate can be purchased by the following:

y y y y
Rs. 1000/- grows to Rs. 1601/- in six years. Minimum investment Rs. 500/Maximum no limit. Certificates can be pledged as security against a loan to banks/ Govt. Institutions.
y y y y y
A Tax saving investment under Sec 80C Interest income is taxable, but no TDS. Rate of interest 8% compounded half yearly Two adults, individuals, and minor through guardian can purchase. Companies, Trusts, Societies or any other Institutions are not eligible to purchase.
y y y
Non-resident Indian/HUF cannot purchase. No premature encashment. Annual interest earned is deemed to be reinvested and qualifies for tax rebate for the first 5 years under section 80 C of the Income Tax Act.
Maturity proceeds not drawn are eligible to Post Office Savings Account interest for a maximum period of two years.
y y
Nomination facility is available Facility of purchase/payment to the holder of Power of Attorney.
Tax Saving instrument - Rebate admissible under section 80 l of the Income Tax Act.
Deposits are exempt from Wealth Tax.
Government of India 8% Savings (Taxable) Bonds, 2003

The salient features of the Bond areas follows: Eligibility for Investment
The Bonds may be held by (i) an individual, not being a Non-Resident Indian (NRI) (a) in his or her individual capacity, or (b) in an individual capacity on joint basis, or (c) in an individual capacity on anyone or survivor basis, or (d) on behalf of a minor as father/mother/legal guardian (ii) a Hindu Undivided Family. (iii) (a)'Charitable Institution' to mean a Company registered under Section 25 of the Indian Companies Act 1956 or (b) an institution which has obtained a Certificate of Registration as a charitable institution in accordance with a law in force; or (c) any institution which has obtained a certificate from Income Tax Authority for the purpose of Section 80G of the Income Tax Act, 1961. (iv) "University" means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a university for the purposes of that Act.
BANKS
Bank Fixed Deposits

Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in maturity period and it ranges from 7days to 10 years. The interest is compounded annually and is added to the principal amount. Minimum deposit amount is Rs 1000/- and there is no upper limit. Loan / overdraft facility is available against bank fixed deposits. Premature withdrawal is permissible but some penalty is levied. Tax Deductible at Source, if the interest paid/ payable on deposit exceeds Rs.5000/- per customer, per year, per branch
DEPOSIT SCHEME FOR RETIRING GOVERNMENT EMPLOYEES
This scheme is open to retired Central and State governments' employees and retired judges of Supreme Court and High Courts. The account can be opened at designated branches of Public Sector Banks throughout the country. Minimum deposit limit to open the account is Rs 1000, while the maximum limit equals total retirement benefits in multiple of one thousand rupees.
Retirement benefits means:
Balance at the credit of employee in any of the Government Provident Funds
y y y y
Retirement / Superannuation gratuity Commuted value of pension Cash equivalent of leave Savings element of Government insurance scheme payable to the employee on retirement.
RESEARCH METHODOLOGY
Research Methodology is the investigation of specific problem in detail. At first problem is defined carefully for conducting research. There should be a good research plan for conducting research. No research can be done without data collection. After all this analyze is made for getting solution for problem. A. Defining the problem Defining the research problem is first necessary step for any research. This work should be done carefully.Here research problem is to collect details about the investment modes of the people.
B. Sampling Plan
The sampling plan calls for three decisions. y Sampling Unit: I have completed my survey in Faridabad Haryana for a period of 45 days. y Sample Size: The selection of 110 respondents. The sample was drawn from various groups that I had visited for giving presentation and collecting leads.The selection of the respondent was done on the basis of simple random sampling. y Contract methods:I have conduct the respondent through various meetings with the clients and while field work done for collecting leads and by calling on the data provided by company.
y Research Instrument: A questionnaire was constructed for my survey. Questionnaire consisting of a set of questions made to filled by various respondents. The questionnaires were returned back after filing up on their convince, While receiving the filled in questionnaire care was taken to check whether there are any unfilled items in the questionnaire.
y Collecting the Information: After this, I have collected the information from the respondent with the help of questionnaire that I asked the people to fill up or I just simply asked questions from the questionnaire and they answered. y Analyzing the information: After collecting the information with the questionnaire I have analyzed it that how many people like to invest through which mode. y Presentations of Findings: This was the last stop of the survey
SURVEY ANALYSIS
1.
Occupation Details of the people intervened

DETAILS No of responses Student 8 Business man 14 Professional 33 Retired 20 Service 25 others 10 Percentage 7.2 12.7 30 18.3 22.7 9.1
As with the above table , the respondent who were intervened with respect to their occupation details is categorized which from the survey 33 people were professional and 10 people who fall in other category like house wife, unemployed etc. As with the graph the majority of people intervened are professional with 30 % of the total and lowest to other with 9.1%.
2. Annual Income of the people intervened

Annual income Up to 100000 100000 - 200000 200000 - 500000 Above 500000 No of responses 11 29 57 13 Percentage 10 26.3 51.8 11.9
The respondent who were intervened as were of different income groups range which starts till 100000 and moves till 500000 & above .The majority of the income group was of middle class who have their income between 100000 and 500000. With the above graph majority of the people who were intervened have their annual income around between 200000 500000 with share of 51.8% from total people intervened.
3. Investment out of their monthly/annual income on an average?

Income invested No of responses Less than 30 % 64 30 % to 50 % 35 More than 50 % 11 Percentage 58.2 31.8 10
The table clearly shows that majority of people tends to invest less than 30% of the total income which is 58.2 % respondent agreed about investment less than 30 % of their total income. The above graph shoes that less than 30 % of total income people prefer to invest in different investment options.
4. Time Horizon of Investment made
Income invested UPTO 1 YEAR 1 TO 3 YEARS 3 TO 5 YEARS 5 YEARS & ABOVE
No of responses 09 26 41 34
Percentage 8.1 24.6 37.2 30.1
The above table shows that people tend to invest for particular longer time period which is sown in table through response. Lesser number of people invest in for shorter time period ranging 1 3 years majority people tend to invest for longer time period. The trend what is seen through study is that people willing to invest for longer period of time which through survey more than 3 years & above.37.2% people said they invest between 3 5 years & 30.1 % said they invest more than 5 years.
5. Investment in Various Products
PRODUCTS SHARES / STOCK BROKING MUTUAL FUNDS INSURANCE GOLD POST OFFICE SCHEMES BONDS FIXED DEPOSITS OTHERS
No of responses 43 32 89 44 54 12 31 28
The table here shows the investment of people into various financial products. People today with the newer trends in financial sector invest largely in insurance, shares, post office schemes with latest upcoming trend in investment is mutual funds . The trend what we see through the graph is people tend it invest more in insurance schemes with total of 80 respondent agreed on investing in insurance , post office schemes , shares are also preferred with 54 & 43 respondent respectively .
6.
REASON FOR INVESTMENT IN DIFFERENT AVENUES
Income invested LIQUIDITY RETURNS TAX BENIFITS SAFETY LOW RISK OTHERS
No of responses 11 22 42 18 12 5
Percentage 10 20 39.1 16.3 10.09 4.51
With above table facts the reason for investing in different investment avenues has been studied a majority people invest for purpose of tax benefits with 39.1 % other look for returns, safety, low risk and liquidity factor. The above graph shows that people invest their money with objective of tax assistance with 39.1% respondent agreed others look for returns which is 29% of response the minimum criteria i.e. 4.51% .
7. Risk Taken to Achieve Higher Returns

RISK PATTERN VERY LITTLE MODERATE AMOUNT A LOT No of responses 40 Percentage 36.3
49 21
44.5 19.2
People these days are little bit conscious in terms of taking decision regarding investment they prefer to take lesser risk in order to have safe and assured returns. still majority of people invest in various products taking moderate level of risk which is approx. 44.5% respondent agreed to it . As shown in the above graph people take moderate risk in terms of investing in different products which is 44.5% of respondent, 19.2 % respondent said they take lots of risk while investing mainly these are who invest in shares/stock etc.
8. Respondent preferences in different financial products

(A) Shares
DETAILS Very little Preferred Little Preferred Moderate Preferred More preferred Most preferred No of responses Percentage 7 6.3
18
16.3
42
37.1
21 22
19.3 20
With the above table and graph people who were intervened had their moderate preferences in investing shares which are willing to take risk in investing which is 37.1% over other financial products since they returns are higher in this so they are moderately preferred by the customers.
(B) Insurance
DETAILS Very little Preferred Little Preferred Moderate No of responses Percentage 4 3.6
11
10
29
26.3
Preferred More preferred 49 Most preferred 27
44.5 24.6
With above graph and tables it is clear that trend is shifting towards security people now days prefer to be securing themselves and their family. Insurance is more preferred these days as 44.5 % respondent prefer insurance since it provide security and also it gives good returns for the investor. 24.6% people invest in insurance as this is most preferred investment proposal by them.
(C) Post Office Schemes

DETAILS Very little Preferred Little Preferred Moderate No of responses Percentage 13 11.8
12
10.9
26
23.7
Preferred More preferred 48 Most preferred 11
43.6 10
The above table and graph shows that as compared to earlier days people now tend to invest less in post office schemes since with emergence of return oriented financial products like mutual funds, Unit Link Insurance Plans (ULIP) as there is lock in period of only 3 years and higher potential for returns in these instruments .Since they are people who prefer more in investing in post office schemes with 43.6 agreed to invest in this.
(D) Mutual Funds
DETAILS Very little preferred Little preferred Moderate
No of responses Percentage 12 10.9
34
30.1
44
40
preferred More preferred 14 Most preferred 6
12.5 5.4
The above table and graph clearly indicates that people moderately prefer in mutual funds the trend is shifting from other investment avenues towards mutual funds. People now prefer mutual funds as safest from of investment proposal and risk free in terms of liquidity. From the above 40 % pf people moderately prefer to invest in mutual funds with 30 % had little preference over it. With increase in awareness and other factors mutual funds are one of the upcoming financial instruments which would be most preferred for investment purpose.
(E) BONDS
48
43.6
26
23.7
10.9 10
From the above table and graph the trend which is shown that people have little preference investing bonds. 43.6% respondent agreed they had little preference in investing bonds while 10 % as most prefer investment option.
(F) Gold
45
40.9
27
24.6
16.3 10.9
The above table and graph shows that around 65% of people have little & moderate preference in investing in gold they largely buy gold for non investment purpose like marriage or gift. Still there are some respondent who buy gold as an investment avenue and prefer it over other investment avenue. With increase in the international prices of gold people consider it a growth prospect and are now prefer most as it is profitable source of investment.
(G) Fixed Deposit

DETAILS Very little preferred Little preferred Moderate No of responses Percentage 21 19.3
32
29.01
29
26.3
19.3 6.09
The above table and graph indicates people have different preferences maximum of 29.1% respondent little prefer investing in FD while 26.3% as moderate preferences. With increase in inflation and the lock in period of 7 yrs the actual realized returns tend to be very low so now people are shifting towards other prospect financial instruments like Mutual Funds , Insurance(ULIP) ETC.
(H) Government Securities
DETAILS Very little Preferred Little Preferred Moderate Preferred More preferred Most preferred
25
22.7
18
16.3
16 19
14.4 17.2
The above table and graph indicates that people do prefer government securities as an investment prospect .people invest in government securities in large number in order the risk associated with them is comparatively less and are considered one for the safer investment option. As seen in the graph 43.7% people prefer it more times in investing and 11.8% people prefer very little in investing in Govt. Securities.
(I) Others
DETAILS Very little preferred Little preferred Moderate No of responses Percentage 13 11.8
12
10.9
26
23.6
43.7 10
The table and graph which include preferences of people who invest in non financial products like investing in Real Estate which is the most preferred since the above graph shows only 17.2 % prefer in investing in other but actual if we look as example of real estate most of preference is in investing in real estate with the change in the rates in urban and rural land respectively.22.7 % people have little preference in investing in others investment options.
9 Investment Objective of the Respondent

The table shown here includes the response of the people with their investment objective. The criteria which they consider while investing in various investment proposals. the criteria which is being considered is capital preservation, income and income growth . People consider both capital preservation as well as income growth while investing in various options .some percentage agreed on investing with criteria of moderate growth.
DETAILS Capital Preservation Income Growth of Income or Capital Preservation. Growth and Income (balanced) Moderate Growth Maximum Growth:
No of responses 8 14 31 24 23 10
Percentage 7.2 12.4 28.6 21.8 20.9 9.09
As shown in the above graph consideration of the objective while investing in different investment products 28.6% of respondent have their objective of growth of income or capital preservation. 21.9% respondent considers growth of income & capital preservation with balanced approach. People prefer moderate growth as compared to have maximum growth in investing.
10. Mode of investment made
Mode Quarterly Half yearly Yearly One time
No of responses 21 47 32 10
Percentage 19.1 42.7 29.1 9.1
With the above response we can clearly see people tend to invest in mode of half yearly 42.7 % respondent agreed to invest in half yearly mode while 29.1 % said they invest in yearly mode. Since these days with the upcoming trend of mutual funds and ULIP plans people now look for one time investment mode for particular time period like in mutual funds (Close Ended ) lock in period of 3 years for one time investment 9.1 % of respondent consider investing in this mode.
11 Liquidity of investments within next 5 years
Portion if investment Not to liquidate O % to 10 % 11% to 20% 21% to 50% 51% or more
No of responses 32 27 29 17 5
Percentage 29.29 24.5 26.31 15.4 4.5
The above table and graph shows that the portions of investment people invest it for the long term purpose in order to get some good returns. People in large portion invest in schemes which are of long term purpose as 29.29% respondent don want to liquidate their investment within 5 year to expect long term returns while another 24.5% said they want to liquidate their investment between 0 to 10 % , 26.31 wants to liquidate between 11 to 20 %. Since these days people are now willing to invest for the long term purpose investing in options like insurance schemes , post office , bonds etc.
12. Response to financial planning services

Services Availed No of responses Yes Availed No of responses No Yes No Future interest Future interest
No of No of responses responses
Investment management Investment advice Tax preparation Retirement planning Planning for life, long term care insurance advice
47 71 89 34 82
63 39 21 76 28
79 94 34 54 85
31 16 76 56 25
Planning for other financial goals Estate planning
46 32
64 78
32 47
78 63
The table shown indicates people response to financial planning services as the respondent has taken largely on matters of tax preparation, insurance and investment advice. While there is still less number in respect to services for planning for financial goals, estate planning and retirement planning. People are now days with change in the trends and with lesser time for financial services are accepting various services may be investment management , investment advice or for other financial goals .large number of people responded in getting services on investment advise and investment management.
The above two graphs shows the response to financial planning services as we can see previously people had availed 89 people responded they take advice for tax preparation, 82 responded for taking advice on insurance planning while only 42 responded on taking services on investment management advice,46 for planning financial goals . Since with the change in trend and time constrain now people are willing to take financial planning services in near future people show their keen interest in taking services on investment advice total 94 responded to it in favor.79 responded on investment management services in near future. Since people who already taken advice on insurance they still want to take advice in near future 85 responded to take advice for security and risk cover for whole life. Since they already prepare tax files through their representatives so most of people responded that they do not require tar preparation services in future.
13. Investment in Mutual Funds in near future as comparison to other investment avenues available
Increasing in the returns and awareness in mutual funds people are now willing to invest in mutual funds but they expect advice and guidance in investing in mutual funds since this trade is still not full covered as financial advice by various advisory services provider so with increase in the services and market trends people would invest heavily in mutual funds looking growth prospect bright in this instrument.
FINDINGS

Criteria of People Invest in options less than 30% of their total income
People do tend to invest for long term purpose in order to realize actual returns
Still people prefer to invest in insurance schemes in order to get returns as well cover life risk
Majority of people take less or moderate risk while investing

People still consider investment for tax saving option Among different investment options people prefer investing more options like shares, insurance ,post office schemes etc
People look investment for capital preservation and income growth as criteria

Majority of people prefer to invest in half yearly mode Personal financial planning advice is now being considered by investors
With increasing in awareness people now shifting their preference toward mutual funds
Suggestion / Conclusion

Now days people prefer to invest in securities which having lesser risk and ensure returns so there is scope of mutual funds to grow
Mutual funds is still untapped so growth prospects are their in this industry
People now consider financial planning advice to attain their objectives so services regarding financial products have a larger scope
Proper marketing and awareness of investment options should be provided to customers
BIBLOGRAPHY
References
www.amfiindia.com www.mutualfunds.com www.personalfinance.com www.valuenotes.com www.researchonline.com www.karvy.com www.Gooogle.co.in
OTHER JOURNALS & MAGAZINES FOR SECONDARY DATA
ANNEXURE
QUESTIONNAIRE
1. Name:
2. Age: _____
3. Sex: M/F
4. Educational Qualification__________________
5. Occupation Details: Student Any Other

The ima ge The ima ge
Business-Man
The ima ge
Professional
The ima ge
Retired
The ima ge
House-Wife
The ima ge
6. Your Annual Income is between:

Up to 100000 100000-200000 200000-500000 Above- 500000
The ima ge
The ima ge
The ima ge
The ima ge
7. How much does u invest out of your monthly/annual income on an average?

Less than 30 % 30 % to 50 % More than 50 %
The ima ge
The ima ge
The ima ge
8 What is time horizon of your investment?
1 year 3 years 3 to 5 years 5 years & above
The link ed
The link ed
The link ed
The link ed
9 Which of the following you have invested? Shares/stock broking Mutual Fund Insurance Gold (specify)_______________
The link ed
Bonds Post Office Schemes Fixed Deposits Any other
The link ed
The link ed
The link ed
The link ed
The link ed
The link ed
10. What is the reason for investing in different avenues? Liquidity Returns Tax benefit
The link ed
Safety Low risk
The link ed
The link ed
The link ed
The link ed
Others______________________
11. How much risk are you willing to take to achieve higher returns?
Very little 1 9
The link ed
Moderate amount 3
The link ed
A lot
The link ed
The link ed
The link ed
The link ed
The link ed
The link ed
The link ed
12. Please Tick the following according to your preferences:

Very little preferred Shares Insurance Gold Fixed deposit Bonds Post office schemes Mutual funds Government securities Others Specify Little preferred Moderate preferred More preferred Most preferred
13. What is your primary investment objective?

Capital Preservation Income: Growth of income or capital preservation. Growth and Income (balanced):
The link ed
The link ed
The link ed
The link ed
Moderate Growth. Maximum Growth:
The link ed
The link ed
14 How frequently do you review your investment decisions? Quarterly Half Yearly Annually One time
The link ed
The link ed
The link ed
The link ed
15. Will you need to liquidate portion of your investment portfolio over next five years?
No requirement to liquidate any portion of portfolio within 5 years To liquidate between 0 % to 10 % of the investment portfolio within 5 years To liquidate between 11 % to 20 % of the investment portfolio within 5 years To liquidate between 21 % to 50 % of the investment portfolio within 5 To liquidate more than 51 % of the investment portfolio within 5 years
The link ed
The link ed
The link ed
The link ed
The link ed
16 What financial planning services are you interested in?

Advisory Services Investment management Availed Y
The link ed
Future Interest Y
The link ed
N
The link ed
N
The link ed
Investment advice
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Tax planning
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Tax preparation
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Retirement planning
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Planning for life, long term care insurance advice
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Planning for other financial goals
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
Estate planning
Y
The link ed
Y
The link ed
N
The link ed
N
The link ed
17. Would you like to invest in Mutual Funds in near future as comparison to other investment avenues available?
Yes
The link ed
No
The link ed
THANKS FOR YOUR SUPPORT AND CO OPERATION

Karvy Report Bhanu

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Karvy Report Bhanu

Uploaded by

Copyright:

Available Formats

KARVY STOCK BROKING LTD.

TO STUDY THE PERSONAL FINANCIAL PLANNING AND INVESTORS PERCEPTION

DELHI BUSINESS SCHOOL

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

Signature of the Supervisor Signature

Forwarded by Director of the College

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

WHERE KARVY STAND IN THE MARKET?

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

Mission Statement of Karvy

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

Behind the Picture: What Customers matter for KARVY?

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

KARVY SERVICES AN OVERVIEW

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

the investors in buying, selling or dealing in securities through such stock-brokers.

3. Investment Products Distribution

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

4. Investment Advisory Services:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

5. Corporate finance & Merchant banking:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

7. Mutual Fund Services:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

List of Mutual Fund Clients of KARVY:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

8.Income Tax enabled services:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.

9.Registrars & Transfer agents:

DELHI BUSINESS SCHOOL

KARVY STOCK BROKING LTD.