CHAPTER1 INTRODUCTION

1.1 INTRODUCTION OF THE TOPIC.

1.1 INTRODUCTION OF THE TOPIC A STUDY ON SCOPE OF FINANCIAL PRODUCT DISTRIBUTION TO RETAIL INVESTORS

FPD entails a distribution company having a tie-up with a financial product company (i.e. principal) to distribute its products within a specified geography against payment of commission and other fees.

The financial product helpdesk provides access to cost effective, timely, and comprehensive database featuring country-by-country review of the rules related to the marketing and distribution of financial products offered by non-locally licensed banks, investment banks, fund managers and insurance companies in 29 countries around the world with more in development In addition, the FPDs relationship management or RM checklist has been designed to relationship managers when conducting sales and marketing activities in a jurisdiction During the customer prospecting, acquisition and follow up phases in their marketing towards retail investor

CHAPTER 2 FOCUS OF THE STUDY

2.1 OBJECTIVES OF THE STUDY 2.2 SCOPE OF THE STUDUY

2.1 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE: To study the scope of financial product distributor in respect with the retail investors

SECONDARY OBJECTIVES: 1) To analyze various financial services rendered by FPDs 2) To study the preference of retail investors in financial products 3) To ascertain the expectations of retail investors towards FPDs 4) To study the retail investors expectation from his investment

2.2 SCOPE OF THE STUDY

1) The study can bring out solution to various problem faced by retail investors as well as distributors 2) It helps the distributors to analyze the satisfaction level of the existing services and also help the in modification of existing services and develop new services 3) It also helps in studying the expectations of retail investors from their investment and also helps in studying the expectation form FPDS various services 4) The study also brings out various information about the list of financial products that are available for the retail investors for their investment 5) The study also talks about various trends and innovations in financial product distribution

CHAPTER 3 PROFILE OF THE COMPANY

3.1 PROFILE OF IFIN 3.2 ORGANISATION CHART

3.1 PROFILE OF IFIN

IFIN Financial Services Ltd (IFIN) was promoted in 1995, by IFCI Ltd., to provide a wide range of financial products and services to investors, institutional and retail. IFIN is primarily involved in Stock Broking, Investment Banking, Mutual Fund Distribution & Advisory Services, Depository Participant Services, Insurance Products Distribution and the like. IFIN is positioned as a global financial supermarket, built on the foundations of incisive research and trust. Intense interaction with investors helps us understand their specific needs and suggest holistic and appropriate financial solutions. Our team of professionals continuously scan the financial arena and stay ever prepared to educate investors and partner them in creating enduring wealth.

A BOUQUET OF SERVICES IFIN is uniquely positioned, by virtue of being in the fold of IFCI which is a pioneering All India financial institution to offer a wide array of financial products and services to to the investing communities in India and NRIs These include: Stock broking Commodities broking Currency trading Portfolio management Merchant banking Insurance broking Mutual fund product distribution IPO distribution Corporate advisory services

IFINS MEMBERSHIPS AND LINCENCES The National Stock Exchange of India Limited The Bombay Stock Exchange of India Limited Multi Commodity Stock Exchange of India Limited Depository Participant Merchant Banking Insurance Corporate Agent Mutual Fund Distribution Portfolio Management Services

IFCI LIMITED IFINS LEGENDARY PARENT INSTITUTION The Government of India established The Industrial Finance Corporation of India (IFCI) on July 1, 1948, as Indias first and premier Development Financial Institution, to cater to the long term financial needs of the industrial sector By the early 1990s, with the need for greater flexibility to respond to the changing financial system, IFCI was mandated to directly access the capital markets for its fund needs. Therefore, the constitution of IFCI was changed in 1993 from a statutory Corporation to a Company under the Indian Companies Act, 1956. The name of the Company itself was changed to IFCI Limited with effect from October 1999. IFCI has achieved a financial turnaround with the consistent support and cooperation of all its stakeholders and is now endeavoring to re-position itself. In addition to its core competence in long-term lending to industrial and infrastructure sectors, IFCI is also enhancing its organizational value through better realization of its Non-performing Assets (NPAs) and unlocking of value of its investment portfolio including unquoted investments as well as real estate assets.

IFINS MANAGEMENT TEAM Led by Ms. Chandra Ramesh, IFIN has well experienced committed and qualified professionals in various facets of the financial landscape to provide unmatched services to its diverse clientele. The team is being strengthened to lend support to the new areas into which IFIN is embarking. Mr. Atul Kumar Rai, Chairman CEO & MD, IFCI since July, 2007, Mr. Rai has served in various positions in the Government of India, including hands-on management, regulation and policy formulation. Mr. Sujit K. Mandal. As a Whole time Director now, he is responsible for entire Credit Management of the IFCI. Mr. Manoj P. Rege. Mr.Rege has worked in various capacities for over 22 years with different Economic Ministries of the Government of India, including the position of Additional Economic Adviser, in Ministry of Food & Civil Supplies. Prof. Shobhit Mahajan. Currently Director, Delhi University Computer Center, Prof. Mahajan obtained his M.S. (Physics) and PhD (Physics) from the University of California, Berkeley. Mr. M.V.Muthu Mr. Muthu was the Executive Director and Chief Executive of IFCI before taking voluntary retirement in 2005. Ms. Chandra Ramesh, Managing Director Ms. Chandra has over 25 years of extensive experience in financial sector

Work Culture Our work culture operates on the cornerstone of ethics and excellent client services. As an organization committed to upholding highest ethical standards and always keeping the clients interests at heart, we strongly believe that happy productive employees result in satisfied clients and organizational growth. Our open culture stimulates learning and innovation, while enjoying work and delivering on the job. Robust performance management practices ensure that employees are recognized for effort and initiative, while ensuring efficiency and productivity on the job. IFINS VISION IFIN is in the process of building physical infrastructure like a strong I.T. backbone, developing robust and dynamic risk management systems, proactive customer relations management systems, research capabilities etc. This will be an ongoing effort to match its ever increasing expansion plans. IFIN is all poised to augment its institutional broking relationships and at the same time venture into the retail segment in a planned and phased manner through own branches, franchisees and on-line trading platform. It also plans to leverage its capabilities to cross-sell other financial products like insurance, mutual funds products etc. In short, an one stop financial services provider.

3.2 ORGANISATION CHART

INVESTMENT SRVICES

MONEY LINE CREDIT

MARKETING DEPARTMENT

HOSING FINANCE

COMMODITES DEPARTMENT

DISTRIBUTION SERVICES

MEDIA AND RESEARCH SERVICE

IFIN

IFIN PTE DEPARTMENT

INSURANCE SERVICES

WEALTH MANAGEMENT INSURANCE BROKERS IFIN REALITY

IFIN CAPITAL

IFIN VENTURES

CHAPTER 4 THEORITICAL PERSPECTIVE

INTRODUCTION Financial products act as an investment avenue and provide the required financial security to the investors based on the risk-return profile of the financial products. In the past, traditional financial products were offered in India through government initiatives by Public Sector Banks (PSBs) (deposit account, credit account), Life Insurance Corporation (LIC), and postal department (recurring deposit, National Saving Certificate, Kisan Vikas Patra). However, in recent years with the advent of liberalization of financial services industry, diverse financial products have been introduced through participation of private and foreign entities in addition to the public sector enterprises. These include products such as debit and credit cards by banks, open-end and closed-end mutual fund schemes (Exchange Traded Funds (ETFs), Index Funds, Systematic Investment Plans (SIP), sector funds, etc.), life and non-life insurance schemes (Unit Linked Investment Plans (ULIPs), pension plans, children education plans, etc.). It further includes shares and debt securities offered by various entities, investments in which are mainly facilitated by the brokerage houses. This has led to rising competition through introduction of innovative and attractive products, regulatory initiatives and growth in the investor base along with increased marketing activities in the financial sector. The introduction of varied products has increased the scope of the financial sector to a very large extent. Even though these products have been targeted towards corporate investors as well as retail investors in India, the retail markets have remained largely untapped. This is mainly due to the concentrated distribution activities by some players in the corporate markets.

WHAT DOES RETAIL INVESTOR MEAN? Individual investors who buy and sell securities for their personal account and not for another company or organization Also known as an "individual investor" or "small investor". INSTITUTIONAL VS RETAIL INVESTOR INSTIUTIONAL INVESTOR An institutional investor is an investor, such as a bank, insurance company, retirement fund, hedge fund, or mutual fund, which is financially sophisticated and makes large investments, often held in very large portfolios of investments. Because of their sophistication, institutional investors may often participate in private placements of securities, in which certain aspects of the securities laws may be inapplicable RETAIL INVESTOR A retail investor is an individual investor possessing shares of a given security. Retail investors can be further divided into two categories of share ownership. 1. A Beneficial Shareholder is a retail investor who holds shares of their securities in the account of a bank or broker, also known as in Street Name. The broker is in possession of the securities on behalf of the underlying shareholder. 2. A Registered Shareholder is a retail investor who holds shares of their securities directly through the issuer or its transfer agent. Many registered shareholders have physical copies of their stock certificates. In the United States, as of 2005 about 57 million households owned stocks, and in total individual investors owned 26% of equities.

FINANACIAL PRODUCTS AVALIABLE FOR RETAIL INVESTOR

EQUITY Money earned is partly spent and the rest is saved for meeting future expenses. Instead of keeping the resource (money) idle, it is used to earn a return in the future, this is called investment. A share or stock is also known as an equity share as well. The equity share basically represents ownership in the company. When a company needs capital or money to operate, it generates the required funds by selling ownership in the company. Total equity capital of a company is divided into equal units of small denominations, each called a share. For example, in a company the total equity capital of Rs 3,00,00,000 is divided into 30,00,000 units of Rs 10 each. Each such unit of Rs 10 is called a Share. Thus, the company then is said to have 30, 00,000 equity shares of Rs 10 each. The holders of such shares are members of the company and have voting rights. DIFFERENT KINDS OF ISSUES Primarily, issues can be classified as a Public, Rights or Preferential issues (also known as private placements). TYPES OF SHARES EQUITY SHARES An equity share, commonly referred to as ordinary share, represents the form of fractional ownership in a business venture. BONUS SHARES Shares issued by the companies to their shareholders free of cost based on the number of shares the shareholder owns. PREFERENCE SHARES Owners of these kind of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the companys creditors, bondholders/debenture holders

CUMULATIVE CONVERTIBLE PREFERENCE SHARES A type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company. WHY SHOULD ONE INVEST IN EQUITIES? Equities have the potential to increase in value over time. It also provides portfolio with the growth necessary to reach long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term. Equities are considered the most challenging and the rewarding, when compared to other investment options. Research studies have proved that investments in some shares with a longer tenure of investment have yielded far superior returns than any other investment AVERAGE RETURN ON EQUITIES IN INDIA Since 1990 till date, Indian stock market has returned about 17% to investors on an average in terms of increase in share prices or capital appreciation annually. Besides that on average stocks have paid 1.5% dividend annually. Dividend is a percentage of the face value of a share that a company returns to its shareholders from its annual profits. Compared to most other forms of investments, investing in equity shares offers the highest rate of return, if invested over a longer duration.

MUTUAL FUNDS Mutual fund is a managed group of owned securities of several corporations. It is a body corporate that pools the savings of a number of investors and invests the same in a variety of different financial instruments. Using a mutual fund is one way to invest in the stock or bond market without buying individual stocks or bonds. Income earned through these investments and the capital appreciations realized are shared by its unit holders. They are operated by an investment company which raises money from the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated set of objectives. It is a substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. These corporations receive dividends on the shares that they hold and realize capital gains or losses on their securities traded. Investors purchase shares in the mutual fund as if it was an individual security. After paying operating costs, the earnings (dividends, capital gains or losses) of the mutual fund are distributed to the investors, in proportion to the amount of money invested. Investors hope that a loss on one holding will be made up by a gain on another. Mutual fund shares are able to collectively gain the advantage by diversifying their investments ADVANTAGES OF INVESTING IN MUTUAL FUNDS

Invest on-line in all mutual funds without the hassles of filling application forms or any signatures or proof of identity for investing. Portfolio Diversification : Mutual funds help to reap the benefit of returns by a portfolio spread across a wide spectrum of companies Professional management and research to select quality securities Spreading Risk: Mutual fund will spread its risk by investing a number of sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified. Transparency: Provides complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type. Choice: Offer the investor a wide variety of schemes to choose from. An investor can pick up a scheme depending upon his risk/ return profile. Regulations: Registered with SEBI and function within the provisions of strict regulation designed to protect the interests of the investor

No manual processes involved. Bank funds are automatically debited or credited while simultaneously crediting or debiting the unit holdings. Control over your investments with online order confirmations and order status tracking.

Disadvantages of mutual funds

No control over costs, customized solutions Managing a portfolio of funds The investor must rely on the integrity of the professional fund manager Fund management fees may be unreasonable for the services rendered The fund manager may not pass transaction savings to the investor The fund manager is not liable for poor judgment when the investor's fund loses value There may be too many transactions in the fund resulting in higher fee/cost to the investor - This is sometimes call "Churn and Earn" Prospectus and Annual report are hard to understand Investor may feel a loss of control of his investment dollars There may be restrictions on when and how an investor sells/redeems his mutual fund shares Market risk: If the overall stock or bond markets fall on account of overall Economic factors: the value of stock or bond holdings in the fund's portfolio can drop, thereby impacting the fund performance Non-market risk: Bad news about an individual company can pull down its stock price, which can negatively affect fund holdings Interest rate risk: When the interest rates rise, bond prices fall and this decline in underlying securities affects the fund negatively

COMMODITY A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. It is a physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Risk is actually the reason exchange trading of the basic agricultural products began. Commodities are often substances that come out of the earth and maintain roughly a universal price. A commodity is fungible, that is, equivalent no matter who produces it COMMODITY MARKET IN INDIA India has a long history of future trading in commodities. In India, trading in Commodity future has been existence from the 19th Century with organised trading in Cotton, through the establishment at Bombay Cotton Association Ltd. in 1875. Over a period of time, other commodities were permitted to be traded in future exchanges. Spot trading in India occurs mostly in regional mandis and unorganized market, which are fragmented and isolated. There were booming activities in these market at one time as many as 100 unorganized exchanges were conducting forward trade in various commodities. The securities market was a poor competitor of this market as there were not many papers to be traded at that time. However, many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities. As a result, after independence, commodity option trading and cash settlement of commodity future were banned in 1952. A further blow come in 1960s when following several years of several droughts has forced many farmers to default on forward contact and even caused some suicides, forward trading was banned in many commodities considered primary or essential. Consequently, the commodities derivatives market dismantled and remained dormant

for about four decades until the new millennium when the Govt. in a complete change in policy, started actively encouraging the commodity derivatives market. The year 2003 marked the real turning point in the policy frame work for commodity market when the government issued notifications for withdrawing all prohibitions and opening up forward trading in all commodities. This period also witnessed other reforms, such as, amendments to the Essential Commodities Act, Securities (contract) Rules, which have reduced bottlenecks in the development and growth of commodity markets of the country is total GDP, commodities related and dependent industries constitute about roughly 50-60% which itself cannot be ignored TYPES OF COMMODITIES THAT ARE TRADED

Metal BULLION FIBER ENERGY SPICES PLANTATIONS PULSES

Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Long (Bhavnagar), Steel Long (Govindgarh), Steel Flat, Tin, Zinc Gold, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil Cardamom, Jeera, Pepper, Red Chilli Arecanut, Cashew Kernel, Coffee (Robusta), Rubber Chana, Masur, Yellow Peas

PETROCHEMICALSHDPE, Polypropylene(PP), PVC Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard Seed (Jaipur), Mustard Seed OIL & OIL SEEDS (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds CEREALS OTHERS Maize Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar), Sugar M

MAJOR STATES IN COMMODITY MARKET

INITIAL PUBLIC OFFER IPO or Initial Public Offer is a way for a company to raise money from investors for its future projects and get listed to Stock Exchange. It is the selling of securities to the public in the primary stock market. An Initial Public Offering (IPO) referred to simply as an "offering" or "flotation," is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. Company raising money through IPO is also called as company going public'. Initial Public Offerings (IPOs) represent the transition point of companies from a private status to a publicly held status. Thus, IPOs represent one of the most closely observed events in the stock market since they mark the inception of a new trading opportunity. Since every business starts as a small enterprise, the new player on the stock market issues only a few stocks, which results in a relatively small number of stockholders. In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. From an investor point of view, IPO gives a chance to buy shares of a company, directly from the company at the price of their choice (In book build IPO's). Many a times there is a big difference between the price at which companies decides for its shares and the price on which investor are willing to buy share and that gives a good listing gain for shares allocated to the investor in IPO. An IPO can be a risky investment. For the individual investor it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value. From a company prospective, IPO help them to identify their real value which is decided by millions of investor once their shares are listed in stock exchanges.

TIPS TO CHOOSE RIGHT IPO FOR INVESTMENT

The issue size has to be big, the bigger the issue, the higher is the capability of the promoters Money begets more money, so if they have raised more money, be sure, they will be able to earn more A higher promoters stake is a must, instills a sense of responsibility A background check on the promoters capabilities Size of projects in the pipeline, will indicate the scalability of the company

DERIVATIVES Financial markets are, by nature, extremely volatile and hence the risk factor is an important concern for financial agents. To reduce this rick, the concept of derivatives comes into the picture. Derivatives have probably been around for as long as people have been trading with one another. Forward contracting dates back at least to the 12th century, and may well have been around before then. Merchants entered into contracts with one another for future delivery of specified amount of commodities at specified pric. A primary motivation for pre-arranging a buyer or seller for a stock of commodities in early forward contracts was to lessen the possibility that large swings would inhibit marketing the commodity after a harvest. In short, derivative is not an asset in itself but an agreement or a contract to transfer the real asset in future whenever exercised. The date and price of execution is mentioned in the contract as per agreement between the parties. There are varieties of derivatives available at present like futures, options and swaps; futures and options being the most common ones. They yield better returns with lower capital investment as compared to

the amount that will be invested to buy the shares directly from the spot market. It is governed by the Securities Contract Regulation Act or SCRA 1956.

THE NEED FOR A DERIVATIVES MARKET 1. They help in transferring risks from risk averse people to risk oriented people 2. They help in the discovery of future as well as current prices 3. They catalyze entrepreneurial activity 4. They increase the volume traded in markets because of participation of risk averse people in greater number 5. They increase savings and investment in the long run.

SERVICES OFFERED BY IFIN Equities IFIN is a member of BSE and NSE registered with NSDL and CDSL as a depository participant and provides broking services in the cash, derivatives and currency segments, online and offline. IFIN is a dominant player in the retail as well as institutional segments of the market. It recently became the first Indian broker to get a membership of the Colombo Stock Exchange and is also the first Indian broker to have received an in-principle approval for membership of the Singapore Stock Exchange. IFINSs Trader Terminal, its proprietary trading platform, is widely acknowledged as one of the best available for retail investors. Investors opt for IFIN given its unique combination of superior Service, cutting-edge proprietary Technology, Advice powered by world-acclaimed research and its unparalleled Reach owing to its over 2500 business locations across over 500 cities in India. IIFL received the BQ1 broker grading (highest grading) from CRISIL. The assigned grading reflects an effective external interface, robust systems framework and strong risk management. The grading also reflects IFINs healthy regulatory compliance track record and adequate credit risk profile. IFINs analyst team won Zee Business Indias best market analysts awards 2009 for being the best in the Oil and Gas and Commodities sectors and a finalist in the Banking and IT sectors. IFIN has rapidly emerged as one of the premier institutional equities houses in India with a team of over 25 research analysts, a full-fledged sales and trading team coupled with an experienced investment banking team. The Institutional equities business conducted a very successful Enterprising India global investors conference in Mumbai in March 2010, which was attended by funds with aggregate AUM over US$5 trillion and CEOs and other executives representing corporate with a combined market capitalization of over US$500 billion. The Discover Sri Lanka global investors conference, held in Colombo in July 2010, was attended by more than 50 leading global and major local investors and 25 Sri Lankan corporate, along with senior Government officials. Commodities IFIN offers commodities trading to its customers vide its membership of the MCX and the NCDEX. Our domain knowledge and data based on in depth research of complex paradigms of commodity kinetics, offers our customers a unique insight into behavioral patterns of these markets. Our customers are ideally positioned to make informed investment decisions with a high probability of success.

Credit and finance IFIN offers a wide array of secured loan products. Currently, secured loans (mortgage loans, margin funding, loans against shares) comprise 94% of the loan book. The Company has discontinued its unsecured products. It has robust credit processes and collections mechanism resulting in overall NPAs of less than 1%. The Company has deployed proprietary loan-processing software to enable stringent credit checks while ensuring fast application processing. Recently the company has also launched Loans against Gold. Insurance IFIN entered the insurance distribution business in 2000 as ICICI Prudential Life Insurance Co. Ltds corporate agent. Later, it became an Insurance broker in October 2008 in line with its strategy to have an open architecture model. The Company now distributes products of major insurance companies. Customers can choose from a wide bouquet of products from several insurance companies including Max New York Life Insurance, MetLife, Reliance Life Insurance, Bajaj Allianz Life, Birla Sun life, Life Insurance Corporation, Kotak Life Insurance and others. Wealth Management Service IFIN offers private wealth advisory services to high-net-worth individuals (HNI) and corporate clients under the IFIN Private Wealth brand. IFIN Private Wealth is managed by a qualified team of MBAs from IIMs and premier institutes with relevant industry experience. The team advises clients across asset classes like sovereign and quasisovereign debt, corporate and collateralized debt, direct equity, ETFs and mutual funds, third party PMS, derivative strategies, real estate and private equity. It has developed innovative products structured on the fixed income side. It also has tied up with Interactive Brokers LLC to strengthen its execution platform and provide investors with a global investment platform. Investment Banking IIFLs investment banking division was launched in 2006. The business leverages upon its strength of research and placement capabilities of the institutional and retail sales teams. Our experienced investment banking team possesses the skill-set to manage all kinds of investment banking transactions. Our close interaction with investors as well as corporate helps us understands and offer tailor-made solutions to fulfill requirements. The Company possesses strong placement capabilities across institutional, HNI and retail investors. This makes it possible for the team to place large issues with marquee investors.

ONLINE TRADING SERVICES BY IFIN

Advantages of Online Trading Convenience - you can place orders from the comfort of your home or office or even from your mobile.- Anytime Anywhere. No paper work When you trade online, you dont require filling any form or writing any cheque or dematting slip at all. Customized Trading Solutions - Depending on whether you are a beginner or a seasoned investor in the stock markets you can select the Online Trading Platform more suitable to you. Control Online Trading brings all the control in the hands of investor. Now which stock at which price you want to trade can be seen in real time. Informed Decisions Online Trading brings you a host of information and truck loads of data, latest research reports and market information. This all helps you taking wiser and well informed investment decisions Portfolio Tracker -You can view the shares that you trade or want to trade and their current market valuation tick by tick, thereby giving you a view of your portfolio. Dedicated Customer Service -You can reach our customer service desk to get all your queries regarding your account answered. Call & Trade Facility -In any case if you are unable to access internet, you can place your orders for trades on phone using Call & Trade facility. Research Advisory - With our dedicated team of experts covering a wide range of stocks, our advisory services can help you spot market opportunities.

OUR OFFERINGS IFCI Financial Services Ltd (IFIN), your trusted financial investment partner, offers you online trading in Equity, Commodity & Currency, IPOs and Mutual Funds. At IFIN, your trust & relationship is the most valued possession for us and hence, we stay committed to offer you hassle-free online services with state-of-the art technology. Most importantly our sound in-house research team provides you expert advisory on the market that would help you realize your dream of financial freedom and make your investment experience more rewarding & pleasant. IFIN First IFIN First is a powerful browser based Trading system for those who are relatively new to online investing. IFIN First is a comprehensive trading platform with the flexibility of trading on any internet capable system, with access to live market data , news and information. Features

Latest news, market information and research reports No software installation required Accessible on any computer having internet connection Fully customizable display of your watch list Trade on different exchanges on a single platform Online funds transfer through multiple banks Live order & trade status Online Back office to track your Investments Online IPO & Mutual Fund

System Requirements Browser Type : Internet Connection : System : Operating System : Microsoft Internet explorer 6.0 or higher Broadband Min 128kbps Pentium 3 and above. RAM 128 MB or above Windows 98/2000 or Windows XP

IFIN Imperia This is a software based premium online trading product, which is ideal for clients who are actively involved in the stock market and trade frequently. It offers comprehensive facilities on a single screen, and is very similar to that of a brokers trading terminal, thus providing greater ease and time advantage, to the investors.

Features

Trading terminal similar to Brokers on your desktop Real time streaming quotes & rate scroll Dynamic charting with indicators Different Exchanges, segments & products on a single screen Fully Customizable Market Watch Short Cut Key Functions for faster trading Trading Terminal Security lock for better safety Online transfer of funds through multiple Banks Apply Online IPO & Mutual Fund Access of Back office reports Online Research Reports and Advisory Calls thru Trading Platform Latest news, market information and research reports

System Requirements Browser Type : Internet Connection : System : Operating System : Microsoft Internet Explorer 6.0 or higher (Java enabled) Broadband Min 256kbps Pentium 3 and above. RAM 256 MB and above Windows 98/2000 or Windows XP

WHO ALL ARE ELIGIBLE TO OPEN AND ONLINE TRADING ACCOUNT ? Any individual, HUF (Hindu Undivided Family), proprietary firm, partnership firm or a corporate can open online trading account with IFIN

HOW CAN I OPEN AN ONLINE TRADING ACCOUNT WITH YOU? There are many ways to contact us. Once you register with us, our team will facilitate the account opening for you. You can

Visit website www.ifinltd.in and register ourselves. Email at customercare@ifinltd.in Call Toll Free 1800-425-1117 SMS "IFIN" to 575758

WHAT ARE THE PROOFS/DOCUMENTS REQUIRED TO OPEN AN ONLINE TRADING ACCOUNT? The following documents (as per Statutory guidelines) are required to open an online trading with IFIN :

Passport Latest Electricity bill Latest Telephone bill Latest Bank Statement Pan Card Driving License Passport Voters ID card

WHICH ALL PRODUCTS AND STOCK EXCHANGES TRADED ONLINE? IFIN is truly a one stop investment destination and we bring you the services in Equity, Derivatives, IPO, Mutual Funds, Commodity, Currency, E-Gold, and Insurance etc and have the membership with leading stock & commodities exchanges. As far as your Online Trading account is concerned, you can trade at NSE, BSE, MCX, NSE CDS, MCX SX, and NCDEX. and also invest in IPOs & MFs. CODE OF CONDUCT FOR THE BOARD OF DIRECTORS AND EMPLOYEES AT IFIN The Board of Directors (the "Board") and the senior management of IFIN subscribe to the following Code of Conduct adopted by the Board. They would: Use due care and diligence in performing their duties of office and in exercising their powers attached to that office Act honestly and use their powers of office, in good faith and in the best interests of IFIN as a whole Not make improper use of information nor take improper advantage of their position as a Director Not allow personal interests to conflict with the interests of IFIN Not engage in conduct likely to bring discredit upon IFIN Be independent in judgment and actions, and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors Ensure the confidentiality of information they receive whilst being in office of Director and is only disclosed if authorized by the company, or the person from whom the information is provided, or as required by law Besides, the Code of Ethics, all Business Policies of IFIN apply to Directors holding executive positions and executives in senior management.

GUIDELINES FOR NBFCS Policy on interest rates Guidelines for demand/ call loan Guidelines on corporate governance Guidelines on exposure norms Guidelines on fair practice Guidelines on investment policy Norms on 'Know Your Client' (KYC) Policy for purchasing and sale of non- performing financial assets

CORPORATE SOCIAL RESPOSIBILITY OF IFIN Organizations, like individuals, depend for their survival, sustenance and growth on the support and goodwill of the communities of which they are an integral part, and must pay back this generosity in every way they can... This ethical standpoint, derived from the vision of our founder, lies at the heart of the CSR philosophy of the IFIN. While we strongly believe that our primary obligation or duty as corporate entities is to our shareholders - we are just as mindful of the fact that this imperative does not exist in isolation; it is part of a much larger compact which we have with our entire body of stakeholders: From employees, customers and vendors to business partners, ecosystem, local communities, and society at large. We evaluate and assess each critical business decision or choice from the point of view of diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address long-term social, economic and environmental costs and concerns. For us, being socially responsible is not an occasional act of charity or that one-time token financial contribution to the local school, hospital or environmental NGO. It is an ongoing yearround commitment, which is integrated into the very core of our business objectives and strategy. Because we believe that there is no contradiction between doing well and doing right. Indeed, doing right is a necessary condition for doing well.

CHAPTER 5 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY. The systematic gathering recording and analyzing of data about problems, formulating hypothesis and suggested solutions collecting, organizing and evaluating data, making deduction and reaching conclusion and carefully testing the conclusion to determine whether they fit the formulating hypothesis.

AIM OF THE RESEARCH This project was undertaken to study about the role of financial products distributors at IFIN, and to suggest about various solutions about the betterment of their services AREA OF THE STUDY The study was administered and carried out at IFINs head office located at mahatma Gandhi road Chennai RESEARCH DESIGN The type of research design used for this study is DESCRIPTIVE RESEARCH DATA COLLECTION It is simply the framework on plan for a study collection and analysis of data there are two types of data collection Primary data Secondary data PRIMARY DATA The data collected through survey. Researcher observes some quantitative measurements. The primary data are collected fresh for the first time. There are several methods of collecting the primary data, particularly in a analytical research questionnaires used

SECONDARY DATA Secondary data means data that are already available. Like all scientific pursuits in statistics also the investigator need not begin from the very beginning. The researcher use and must take in to account, has already been discovered by others, when an investigator use such data are collected as secondary data Secondary data may be published data or un published data it can be obtained from journal, reports, etc.

UNIVERSE The total population available for the study of a researcher is called universe SAMPLE SIZE the amount of individual representatives drawn from the universe for the study about the population is called a sample size each individual is called a sample SAMPLING METHOD The process of drawing a sample from the population is called the method of sampling, the sampling technique used in this study is snow ball sampling where the individual samples would refer other samples from the population which they think they would be suitable to answer the questions

STATISTICAL TOOLS
CHI SQUARE TEST Chi square test is a non parametric test used most frequently by researchers to test the hypothesis. This test is employed to test the hypothesis when distribution of population is not known We use the following formula to calculate chi square

(oi-ei)2 X2= E

O= observed frequency E= expected frequency

STEPS FOR COMPUTING X2 TESTS All observed frequencies are recorded All the expected frequencies are calculated

RT x CT E= N

RT= row total CT= column total Difference between observed & expected frequencies are calculated and squared All the values are summed up to calculate the chi square value

PERCENTAGE METHOD This is the earliest and best method to analyze a given data. The percentage wise distribution of data gives an idea of which factor is more or less. This method is used extensively used in this project.

NO OF RESPONDENT PERCETAGE METHOD = SAMPLE SIZE X 100

CHAPTER 6 DATA ANALYSIS AND INTERPRETATION

TABLE 6.1 Table showing the distribution of the respondents based on age

PARTICU S.No LARS 1 2 3 20-25 YEARS 25-35 YEARS 35- AND ABOVE TOTAL

No OF RESPOND ENTS 15 10 5 30

PERCENT AGE 50% 34% 16% 100%

SOURCE: the data are collected from the respondents

INTREPRETATION The above table confirms that 50% of the respondents are in the age group of 25-25 followed by 34% of respondents are in the age group of 25-30 and 16% in the age group of 35 and above

CHART NO 6.1

AGE
120% 100% 80% 60% 40% 20% 0% MALE FEMALE TOTAL PERCENTAGE

TABLE 6.2 Table showing the distribution of respondent based on gender

S.No 1 2

No OF PARTICULARS RESPONDENTS PERCENTAGE MALE 24 80% FEMALE 6 20% TOTAL 30 100%

SOURCE: data are collected from the respondents

INTERPRETATION The table shows that 80% of respondents are male and 20% are female

CHART 6.2

MALE/FEMALE
1 21%

2 79%

TABLE 6.3 Table showing the no of respondents aware about the financial product distributors service
S NO PARTICULARS 1 YES 2 NO TOTAL NO OF RESPONDENTS PERCENTAGE 24 80% 6 20% 30 100%

SOURCE: Data collected from the respondents

INTERPRETATION From the above table about 80% of the responds are aware about the services offered by the financial products distributors and the rest 20% are unaware about their services

CHART 6.3

PERCENTAGE OF AWARENESS OF FPD'S

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% YES NO

PERCENTAGE

TABLE 6.4 Table showing the media that created awareness about the financial product distributors service to the respondents

SNO 1 2 3 4 5 6

PARTICULARS print advertisements TV advertisements web advertisements relatives and friends brokers others total

NO OF RESPONDENTS 3 2 8 10 7 0 30

PERCENTAGE 30% 7% 26% 13 14% 0% 100%

SOURCE: the data are collected from the respondents INTERPRETATION About 30% of people gained knowledge from print media, 7% from tv advertisements 26% from web advertisements 13% from relatives and friends 14% from the brokers where print media is found to be the most effective

CHART 6.4

SOURCE OF INFORMATION
14 12 10 Axis Title 8 6 4 2 0 NO OF RESPONDENTS PERCENTAGE 1 print avertisements 2 tv advertisements 3 web advertisements 4 relatives and friends 5 brokers 6 others

TABLE 6.5 Table showing the annual income of the respondents

SNO 1 2 3 4 PARTICULARS <300000 3-500000 5-700000 >700000 TOTAL NO OF RESPONDENTS 3 17 8 2 30 PERCENTAGE 14% 54% 26% 6% 100%

SOURCE: data collected from the respondents INTERPRETATION The above table shows that 14% of respondents have below 3lack of annual income 54% have around 3-5 lack and 26% have 5-7 lack and 6% have above 7lack of annual income

CHART 6.5

INCEME OF RESPONDENTS
20 15 1 <300000 10 5 0 NO OF RESPONDENTS 2 3-500000 3 5-700000 4 >700000

TABLE 6.6 Table showing the distribution of respondents based on the satisfaction of the satisfaction level with the financial product distributors

S. No 1 2 3 4

PARTICULARS excellent good average poor TOTAL

No OF RESPONDENTS 3 17 8 2 30

PERCENTAGE 10% 57% 27% 6% 100%

SOURCE: data is collected from the respondents

INTERPRETATION The above table confirms that about 57% of respondents are satisfied with FPDS and 10% says that their performance is excellent and 27% says that their performance is average and 2% says that their performance is poor

CHART 6.6

SATISFACTION LEVEL
6% 27% 10% excellent good 57% average poor

TABLE 6.7 The table shows the distribution of respondents based upon the view towards the various areas of improvement in FPDS services
S.No 1 2 3 4 PARTICULARS customer service monitoring of fund agents training others TOTAL No OF RESPONDENTS 9 12 9 0 30 PERCENTAGE 30% 40% 30% 0% 100%

SOURCE: data collected from the respondents INTREPRETATION The above table suggests that monitoring of funds has to be improved first followed by customers service and training

CHART 6.7

AREA OF IMPROVEMENT
0% 30% 30% 0% 30% 30%

customer service monitoring of fund agents training

40% 40%

others

TABLE NO 6.8 The table shows the distribution of respondents based upon the financial products that they would invest in the current market condition

S. No 1 2 3 4

PARTICULARS MUTUAL FUND INSURANCE FIXED DEPOSIT STOCK MARKET TOTAL

No OF RESPONDENTS 10 3 8 9 30

PERCENTAGE 34% 10% 27% 39% 100%

SOURCE: data collected from the respondents INTREPRETATION ABOUT 39% of people are interested to invest in the stock market, 34% in the mutual funds and 27% in the fixed deposits, 10% in the insurance

CHART 6.8

PERCENTAGE
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

TAX SAVERS (ELSS) 12%

EQITY 40%

BALANCED 40%

DEBT 4%

PERCENTAGE

TABLE 6.9 This table shows the stability of the income of the respondents
S.No 1 2 3 4 PARTICULARS VERY UNSTABLE MODERATELY UNSTABLE MODERATELY STABLE VERY STABLE TOTAL No OF RESPONDENTS 3 4 12 11 30 PERCENTAGE 10% 17% 40% 33% 100%

SOURCE: data collected from the respondents INTREPRETATION From the above data about 40% of the investors have a moderately stable income and 33% have very stable income about 175 have moderately unstable income, and 10% have very unstable income

CHART 6.9

INCOME
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

PERCENTAGE

VERY STABLE, 33% PERCENTAGE

Axis Title

TABLE 6.10 Table showing the distribution of respondents based on the preference of time period of their investment
S.No 1 2 3 4 PARTICULARS <6 moths 6moths-1year 1-3 years >3 years TOTAL No OF RESPONDENTS 2 9 11 8 30 PERCENTAGE 7% 30% 37% 6% 100%

SOURCE: data collected from the respondents INTREPRETATION: about 37% prefer investments of a time period of 1-3 years and 30% of respondents prefer investments for a year and less, 7% prefer investments below 6 moths and 6% prefer investments above three years.

CHART 6.10

TIME PERIOD
40% 35% 30% percentage 25% 20% 15% 10% 5% 0% <6 moths 6moths-1year 1-3 years >3 years PERCENTAGE, 6%

TABLE 6.11 Table showing the distribution of respondents based on the expected rate of return
S.No 1 2 3 4 PARTICULARS 0-10% 10-20% 20-30% 30&above TOTAL No OF RESPONDENTS 2 14 7 7 30 PERCENTAGE 7% 47% 23% 23% 100%

SOURCE: data collected from the respondents INTERPRETATION The above table states that about 47% of respondents expect a rate of return around 10% &20% and 23% prefer 20-30 another 23% prefer 30% and above around 7% prefer 10% of return

CHART 6.11

RATE OF RETURNS EXPECTED

4% 12% TAX SAVERS (ELSS) 42% 42% EQITY BALANCED DEBT

TABLE 6.12 The table showing the distribution of the respondents based on the risk taking ability of the investors
S.No PARTICULARS 1 HIGH 2 MEDIUM 3 LOW TOTAL No OF RESPONDENTS 4 15 11 30 PERCENTAGE 14% 50% 36% 100%

SOURCE: data collected from the respondents INTERPRETATION The above shows that about 50% of the investors are ready to take moderate risk and 36% prefer only low risk and 14% can take high risk

CHART 6.12

RISK TAKING ABILITY

14% 36% HIGH MEDIUM LOW 50%

TABLE 6.13 The table shows the distribution of respondents based the experience they have in the bonds and mutual funds

S.No

PARTICULARS 1 <1year 2 1-4 year 3 >4 year TOTAL

No OF RESPONDENTS 10 17 3 30

PERCENTAGE 34% 56% 10% 100%

SOURCE: data collected from the respondents INTERPRETATION About 56% of the respondents have 1-4 year experience in the financial products, 34% have less than 1 year of experience and 10% have above 4 years of experience

CHART 6.13

PERCENTAGE
>4 year

1-4 year

PERCENTAGE

<1year

0%

10%

20%

30%

40%

50%

60%

TABLE 6.14 Table showing the distribution of respondents based on the mode of investment which they prefer the most

S.No

PARTICULARS 1 lump sum 2 SIP 3 both TOTAL

No OF RESPONDENTS 11 11 8 30

PERCENTAGE 36% 36% 28% 100%

SOURCE: data collected from the respondents

INTERPRETATION Around 36% of the respondents prefer lump sum, another 36% prefer sip mode of investment and rest 28% of respondents prefer both the lump sum as well as sip mode of investment

CHART 6.14

MODE OF INVESTMENT
lump sum SIP both

28%

36%

36%

TABLE 6.15 The table below shows the distribution of respondents who has all ready invested through ifin and those who not
S.No PARTICULARS 1 YES 2 NO TOTAL No OF RESPONDENTS PERCENTAGE 5 17% 25 83% 30 100%

SOURCE: data collected from the respondents

INTREPRETATION Majority of respondents have not invested through IFIN that is around 83% of the respondents have not invested through IFIN and the rest 17% have invested through IFIN

CHART 6.16

No OF RESPONDENTS

30% YES NO 70%

TABLE 6.17 The table blow shows the rating of the customer service of IFIN by the respondents/ investors

S.No 1 2 3 4 5

PARTICULARS ONE TWO THREE FOUR FIVE TOTAL

No OF RESPONDENTS 4 7 12 5 2 30

PERCENTAGE 14% 23% 30% 16% 7% 100%

SOURCE: data are collected from the respondents

INTERPRETATION About 30% of the respondents rate the customer service 3, about 23% rate 2, about 16% rate 4, about 14% rate 1, around 7% rate five for the customer service.

CHART 6.17

RATING
35% 30% 25% Axis Title 20% 15% 10% 5% 0% PERCENTAGE ONE 14% TWO 23% THREE 30% FOUR 16% FIVE 7%

TABLE 6.18 Table showing the distribution of respondents based on the preference on type of investment they prefer
S.No PARTICULARS 1 OPEN ENDED 2 INTERVAL 3 CLOSE ENDED TOTAL No OF RESPONDENTS 11 12 7 30 PERCENTAGE 36% 40% 24% 100%

SOURCE: data collected from the respondents

INTERPRETATION About 36% of the investors prefer open ended scheme, 40% prefer interval scheme and the rest 24% prefer close ended scheme.

CHART 6.18

SCHEME PREFERENCE
YES 100% 80% 60% 40% 20% 0%

PERCENTAGE

TOTAL

NO

TABLE 6.19 The table shows the distribution of the respondents based up on the objective of their investment
S.No PARTICULARS 1 GROWTH SCHEME 2 INCOME SCHEME BALANCED 3 SCHEME TOTAL No OF RESPONDENTS PERCENTAGE 7 24% 15 50% 8 30 26% 100%

SOURCE: data collected from the respondents INTREPRETATION It shows that half of the respondents are interested in schemes that generate income 24% of the respondents prefer growth schemes, and the rest 26% prefer balanced schemes

CHART 6.19

14 12 10 8 6 4 2 0 TAX SAVERS (ELSS) 1 EQITY 2 BALANCED 3 DEBT 4 No OF RESPONDENTS PERCENTAGE

TABLE 6.20 The table shows the distribution of respondents on what type of fund they want to invest (i.e.) debt, equity etc

S.No 1 2 3 4 5

PARTICULARS TAX SAVERS (ELSS) EQITY BALANCED DEBT OTHER TOTAL

No OF RESPONDENTS 4 12 12 1 1 30

PERCENTAGE 12% 40% 40% 4% 4% 100%

SOURCE: data collected from the respondents

INTERPRETATION The above table shows that 40% of investors prefer equity, 40% prefer balanced, 12% prefer tax saver (ELSS) funds, 4% prefer debt, and 45 prefer other type of schemes

CHART 6.20

TYPE OF FUND PREFERED

TAX SAVERS (ELSS) EQITY BALANCED DEBT OTHER

Table 6.21 The table shows the distribution of respondents regarding the repetition of their investment after their initial investment

S.No

PARTICULARS 1 YES 2 NO TOTAL

No OF RESPONDENTS

PERCENTAGE 20 70% 10 30% 30 100%

SOURCE data collected from the respondents

INTREPRETATION About 70% of the investors repeat their investment after their investment the 30% did not repeat their investment

CHART 6.21

PERCENTAGE
120% 100% 80% 60% 40% 20% 0% YES NO TOTAL PERCENTAGE

TABLE 6.22 Table showing the distribution of respondents based on the online trading facilities provided by the financial products distributors (IFIN)

S.No

PARTICULARS 1 YES 2 NO TOTAL

No OF RESPONDENTS

PERCENTAGE 17 56% 13 44% 30 100%

SOURCE: data collected from the respondents

INTERPRETATION More than 50% of respondents are satisfied with the online trading facility and the rest are not satisfied

CHART 6.22

PERCENTAGE

YES NO

TABLE 6.23 Table showing the distribution of respondents who are getting the statements regularly and those who are not getting their statements regularly

S.No

PARTICULARS 1 YES 2 NO TOTAL

No OF RESPONDENTS

PERCENTAGE 21 70% 9 30% 30 100%

SOURCE: data collected from the respondents

INTREPRETATION From the above table it shows that more than half of the respondents get their statements regularly and the rest have problems in getting their statements

CHART 6.23

PERCENTAGE
80% 70% 60% 50% 40% 30% 20% 10% 0% YES NO PERCENTAGE

CHI SQURE ANALYSIS 6.1.1

AIM To test whether there is significant relation between the ages of the retail investors to that of this risk taking ability

H0-NULL HYPOTHESIS There is significant relation between the age and risk taking ability of the investor

H1-ALTERNATIVE HYPOTHESIS There is no significant relation between the age and the risk taking ability of the investor

OBSERVERVED FREQUENCY
RISK AGE 20-25 25-35 35-ABOVE HIGH 7 1 2 10 MEDIUM LOW 3 2 8 1 2 4 13 7

12 10 2 30

EXPECTED FREQUENCY
AGE 20-25 25-30 35-ABOVE HIGH 4 3.3 2.6 10 MEDIUM LOW 5.2 2.8 4.3 2.3 3.4 1.8 13 7 12 10 8 30

Calculated value of chi square is = 12.29 Degree of freedom = (r-1) (c-1) = (2-1) (2-1) =4 Table value of chi square is = 9.488 RESULT: Since the calculated value is less than that of the tabled value we accept null hypothesis INFERENCE: there is a significant relation between the age and the risk taking ability of the retail investor

CHI SQUARE ANALYSIS 6.1.2 AIM To test whether there is significant relation between the income of the investors and the financial product that he prefers H0 NULL HYPOTHESIS There is a significant relation between the income and the financial product preferred by the investors H1 ALTERNATIVE HYPOTHESIS There is no significant relation between the income and the financial product preferred by the investors OBSERVED FREQUENCY FINANCIAL PRODUCTS
INCOME < 300000 3-500000 5-700000 > 700000 MUTUAL FUND 2 3 2 0 7 INSURANCE 3 2 4 2 11 FIXED DEPOSIT 2 1 0 2 5 STOCK MARKET 1 2 1 3 7 8 8 7 7 30

EXPECTED FREQUENCY FINANCIAL PRODUCTS

INCOME < 300000 3-500000 5-700000 > 700000 MUTUAL FUND 1.8 1.8 1.6 1.6 7 INSURANCE 2.9 2.9 2.5 2.5 11 FIXED DEPOSIT STOCK MARKET 1.3 1.8 1.3 1.8 1.1 1.6 1.1 1.6 5 7

8 8 7 7 30

Calculated value of chi square is = 10.093 Degree of freedom = (r-1) (c-1) = (3-1) (3-1) =9 Table value of chi square is = 16.919 RESULT: Since the calculated value is less than that of the tabled value we accept null hypothesis INFERENCE: there is significance between income of the investor and the financial product preferred.