final project kammy

8/2/2019 Final Project Kammy

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Summer Training Project Report

OnComparative Analysis of various Financial

Institutions in the market

Submitted in Partial Fulfillment of theRequirement for the Degree

Of

MASTERS OF BUSINESSADMINISTRATION

(MBA)

(Session 20010-2012)Submitted by:

Name: Kamalveer Kaur Dhillon

Roll No:

Nepra (Banur), Chd.-Patiala Highway, Near Chandigarh


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(Punjab Technical University)Website:-www.aryans.edu.in

ACKNOWLEDEMENT

Success in any endeavor calls for cooperation and guidance from seniors

and colleagues. It often happens that one is at a loss of word, when one is

really thankful and sincerely wants to express ones gratitude toward

someone. I thank this opportunity to extend my heartiest thanks to all

people who have made the presentation to this report possible. If one

want to be successful in life then a blend of the efforts and guidance is

required.

I enunciate my abysmal indebted to ,. ,

(name of project guide) , for his priceless and inestimable facilities, in

the absence of which the accomplishment of this project would not have

been possible.

Name

Roll no

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TO WHOM IT MAY CONCERN

This is to certify that the project report titled Title of project carried out

by Students name, S/O has been accomplished under my guidance

& supervision as a duly registered MBA student of the Aryans Group of

Colleges, Punjab. This project is being submitted by him in the partial

fulfillment of the requirements for the award of the Master of Business

Administration.

His dissertation represents his original work and is worthy of consideration

for the award of the degree of Master of Business Administration.

Head of the Dept.

Date:

Name

Designation

Sign

Stamp

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EXECUTIVE SUMMARY

The project Comparative Analysis of various Financial Institutions in the

market was done to get the idea, as well as knowledge, benefits and use of financial advisor in the present scenario. The basic objective behind thestudy carried out by me is to know much more about the prospects of Financial Planning in the growing economy. People should come out of theconcept of just keeping their money in Savings Account and Fixed Depositsand should concentrate on their financial planning to maximize returns bytaking proper guidance from financial planner.

Most of the advisors provide expertise information and knowledge aboutvarious financial products, like bonds, mutual funds, insurance, equitymarket and real estate etc.

The analysis of the report will helps to know much more about the investorsand financial advisors. Investors having low saving potential, growth of capital acts as a primary objective behind investments. Investors get highlevel of satisfaction from existing financial advisors, which depicts that thereis a need of financial institutions to approach these investors in a proper

manner so as to provide value additions to the saving potential and portfolio.The sum up, there has been a sustained effort and dedication involved tomake this study a comprehensive market study.

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Table of Contents

Acknowledgement

Certificate from Company

Executive Summary

Contents

Name

1Introduction

2Introduction to the organization

3 Review of Literature/Theoretical Background

4 Objectives

5Financial Institutions in the Market

6Comparative Study of Different Players in the Market

7Research Methodology8Facts and Findings

9Analysis and Interpretation

10Conclusion

11Recommendation and Suggestions

12Appendix

13Bibliography

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Introdution

1.1. What is the project

A set of related tasks which have a specific goal e.g task of investigation atscholarship level.

1.2. Definition and purpose of the project

Definition of a project

The Chartered Management Institute defines a project as An activity that has a beginning and an end which is carried out to achievea particular purpose and to set a quality within given time constraints

Purpose of the project

To communicate the information compiled by a result of research and theanalysis of data. It covers a wide range of topics, but usually focuses on

transmitting information with a clear purpose, to a specific audience.1.3 Scope of the project

The scope and style of projects varies widely. It depends on three keyfactors: the project's intended audience, the project's purpose and the type of information to be communicated; for example, technical projectscommunicate technical information, so the degree of technicality in thereport will depend on the reader's familiarity and understanding of technicalconcepts .

1.4 Salient Contributions of the project

By this project, one will be able to understand the various major financialinstitutions in tha market and the response of various respondents aboutthese institutions by going through various charts and diagrams.

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1.5 Outline of the project report

The outline of this project is to done to get the idea, as well as knowledge, benefits and use of financial advisor in the present scenario as well as to

know about the financial planning, various financial institutions inthe market and to do their comparative analysis also.

Industry /company overview

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Review of Literature/Theoretical Background

Without a sound and effective financial system in India it cannot have ahealthy economy. The financial system of India should not only be hasslefree but it should be able to meet new challenges posed by the technologyand any other internal and external factors.

From 1786 till today, the journey of Indian financial System can besegregated into three distinct phases. They are as mentioned below:

Phase I

The General Bank of India was set up in the year 1786. Next came, Bank of Hindustan and Bengal Bank. The East India Company establishedBank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras(1843) as independent units and called it Presidency Banks. These three

banks were amalgamated in 1920 and Imperial Bank of India wasestablished which started as private shareholders banks, mostlyEuropeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by

Indians, Punjab National Bank Ltd. was set up in 1894 with headquartersat Lahore. Between 1906 and 1913, Bank of India, Central Bank of India,Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore wereset up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks alsoexperienced periodic failures between 1913 and 1948. There wereapproximately 1100 banks, mostly small. To streamline the functioningand activities of commercial banks, the Government of India came upwith The Banking Companies Act, 1949 which was later changed toBanking Regulation Act 1949 as per amending Act of 1965 (Act No. 23of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As anaftermath deposit mobilisation was slow. Abreast of it the savings bank

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facility provided by the Postal department was comparatively safer.Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India withextensive banking facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and StateGovernments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalisedin 1960 on 19th July, 1969, major process of nationalisation was carried

out. It was the effort of the then Prime Minister of India, Mrs. IndiraGandhi. 14 major commercial banks in the country were nationalised.

Second phase of nationalisation Indian Banking Sector Reform wascarried out in 1980 with seven more banks. This step brought 80% of the

banking segment in India under Government ownership.

The following are the steps taken by the Government of India to RegulateBanking Institutions in the Country:

After the nationalisation of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge

jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicitfaith and immense confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the bankingsector in its reforms measure. In 1991, under the chairmanship of M

Narasimham, a committee was set up by his name which worked for theliberalisation of banking practices.

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The country is flooded with foreign banks and their ATM stations. Effortsare being put to give a satisfactory service to customers. Phone banking andnet banking is introduced. The entire system became more convenient andswift. Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It issheltered from any crisis triggered by any external macroeconomics shock asother East Asian Countries suffered. This is all due to a flexible exchangerate regime, the foreign reserves are high, the capital account is not yet fullyconvertible, and banks and their customers have limited foreign exchangeexposure.

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Objectives:

The main objectives behind the preparation of this project is

1. To get the idea, as well as knowledge, benefits and use of financialadvisor in the present scenario.

2. To know much more about the prospects of Financial Planning in thegrowing economy

3. To know much more about the investors and financial advisors.

4. To realize the need of financial institutions so that they provide valueadditions to the saving potential and portfolio of the investors.

5. To know about major players in the market as well as services offered by them to investors.

6. To do comparative analysis of these institutions as a whole.

7. To study the prospects of various financial products provided bydifferent financial institutions in the market

8. To know the responses of the people of particular area about theinvestments.

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FINANCIAL INSTITUTIONS IN THE MARKET

A well-qualified financial planner like a Certified Financial Planner (CFP)would work with a person to prepare his plan. A CFP is finance savvy andcombines the objectivity and trust, developed through years of experienceand expertise in planning ones personal finance.

The kinds of services Financial Institutions offer can vary widely. Someinstitutions assess every aspect of ones financial life, including saving,investments, insurance, taxes, retirement, and estate planning and help onedevelop a detailed strategy or plan for meeting all financial goals. The major

players in the market are as follows: YES Bank

Citibank

UTI Bank Limited

HSBC Bank

HDFC Bank Limited

Bajaj Capital

Religare Enterprises Limited

YES BANK

i) Introduction

YES BANK has been conceived in the spirit of professionalentrepreneurship, with an

unstinted commitment to establish a high quality, technology driven, state-of-the-art private Indian Bank catering to Emerging India.

The vast banking experience of the Promoters, Rana Kapoor and Ashok Kapur who have a collective financial stake of 38.62% has been

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strengthened by the financial support of Rabobank Nederland to provideYES BANK a strong foundation of enduring financial trust.

YES BANK looks to offer comprehensive banking and financial solutions.

Which is why, they have inducted top quality Human Capital across all the banking functions, including Corporate & Institutional Banking, FinancialMarkets, Investment Banking, Business & Transactional Banking and RetailBanking & Wealth Management.

ii) Service Offerings

a) Mutual Funds

YES Bank tap into the latest market trends to give the clients the access to

the best Mutual Funds.

b) Portfolio Management Services

The bank helps you to manage your existing equity portfolios with the helpof selected fund managers thus providing the clients with professionalservices and customized options to meet their investment needs.

c) GOI Bonds

They provide you with fixed tenure Bonds, issued by the Government of India, which ensure regular fund inflows.

d) Tax Saving Bonds

By investing in specified bonds, the bank can help you to reduce your taxliability under section 54EC of the Income Tax Act.

e) Subscription to IPOs

The bank facilitates subscription to select IPOs in the capital market, helpingyou to take timely advantage of available opportunities.

f) Life Insurance

YES BANK has partnered with Max New York Life, one of the mostreputed Life Insurance companies in India. The banking sector can play a

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constructive role in being an agent of change and a creator of social andeconomic value. At YES BANK, they aspire to create and share value. Max

New York Lifes internationally benchmarked training processes;flexible product suite, service excellence and financial strength complement this

outlook, which ensure that we are able to deliver the true value of lifeinsurance to our customers.

YES BANK provides the entire suite of life insurance products, rangingfrom risk protection to investment-related unit linked products, for individuals, groups or select employees.

g) General Insurance

YES BANK has partnered with Bajaj Allianz General Insurance Co todistribute their Non Life Insurance products to our clients.

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Pvt placement

Public inve stment

CITIBANK

i) Introduction

Citigroup in India Citigroup is the single largest foreign direct investor in the

financial services industry in India. Committed to India for over 100 years,Citigroup considers itself a local bank with an international perspective

backed by the largest global network. With a staff strength of over 15,000,Citigroup has consolidated its position as the most innovative andcomprehensive financial products and services provider in the country, andtoday has a customer base of over 1,000 large corporate, over 22,000 small

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and medium enterprises and over 5.5 million retail customers. A pioneer inconsumer banking, Citibank was the first to introduce credit cards, focusedconsumer lending programs and electronic banking in India. Today, theCitibank network comprises of 39 bank branches across 27 cities and over

400 CitiCard Banking centerswhich combine ATMs and self-service phoneand Internet bankingoffering CitiGold wealth management, credit cards,mortgage services, Auto Loans, Personal Loans, Suvidha and NRI Services.Through CitiFinancial, Citigroup offers consumer finance services in thecountry.


CitiGold offers the clients a comprehensive range of products to meet their

transaction, savings, investment, and insurance requirements. The clients canselect from a set of term and endowment insurance policies brought to themthrough bank insurance partners so that the clients needs for wealth

protection are taken care of. The clients can also select from a range of asset products, namely personal, home and auto loans at special relationship pricing. CitiGold Wealth Management offers the clients an exclusive privilege that comprises of:

a) Mutual Funds

At CitiGold you can choose from a range of pre-selected Mutual Fundsmanaged by some of the biggest names in fund management such asAlliance Capital, Franklin Templeton India, Birla SunLife, Zurich India,DSP Merril Lynch, HDFC, IDBI Principal and Prudential - ICICI. The fundson offer are from a rigorously compiled list that ensures only the bestreaches you.

b) Tax Advisory Services

CitiGold has tied up with the leading tax advisory firm - Deloitte, Haskins &Sells to help the clients with their tax management. Deloitte, Haskins &Sells, a member firm of Deloitte Touche Tohmatsu (DTT), is amongst theleading global taxation-consulting firms. DTT operates from 130 countries,

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has more than 6,000 partners and over 90,000 professionals around theglobe.

c) Real Estate Advisory Services

In today's market, real estate presents an attractive real estate investmentoption. To assist the clients with advice on various real estate investments,or to help them in leasing, buying or selling properties, CitiGold has tied upwith a world-class real estate consulting firm - Chesterton Meghraj PropertyConsultants. This service is currently available in the cities of Mumbai,Kolkata and Delhi only. CitiGold will organize special seminars for theclients with these consultants and the clients can also consult them one-on-one on real estateinvestment options.

d) Art Advisory Services

In today's market, art presents an attractive investment option. To assist theclients with advice on various art investments, or to help them in buying or selling art, CitiGold has tied up with a reputed art gallery, ApparaoGalleries.

e) Insurance Services

In today's market, insurance presents an attractive investment option. Toassist the clients with advice on various insurance policies, or to help themin purchasing insurance, CitiGold has tied up with Birla.

UTI BANK LTD

i)Introduction

UTI Bank was the first of the new private banks to have begun operations in1994, after the Government of India allowed new private banks to beestablished. The Bank today is capitalized to the extent of Rs. 280.12 Croreswith the public holding (other than promoters) at 72.43 %. Presently theBank has a very wide network of more than 450 branch offices andExtension Counters. The Bank has strengths in both retail and corporate

banking and is committed to adopting the best industry practicesinternationally in order to achieve excellence

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ii) Service Offerings by Capital Market

a) Equity Market Content

Capital Market is pioneer in offer equity related content for UTI Banks

portal which includes:

Equity Market Commentary

Stock Price Data

Charting Facility

Financial Data

IPO Data Portfolio Tracker

b) Mutual Funds Content

Indian Mutual Fund industry has picked up, It is fastest growing industry,with number of growing investor, today, there are 36 Mutual Funds and over 200 schemes with total assets of approximately Rs. 81,000 crores. So it has

become essential for you to keep updated information on your portal. Capital

Market offers you range of content solution as follows:

Mutual Fund NAV

Fund Profile Sheet

Dividend & Mobilization Details

Mutual Fund News

Mutual Fund NFO

Mutual Fund Tools

c) Commodity Market

Commodities Market is growing in India and Capital Market offersfollowing screens pertaining to Commodity Market:

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Commodity prices End of the day for all the exchanges:

o Gainers & Losers

o Top Traded Value

o Advance Decline

Scrolling ticker for Spot & Future prices & Get Quote button.

Commodity news is also updated on daily basis

HSBC Bank

i)Introduction

The antecedents of the HSBC Group in India can be traced back to October 1853 when the Mercantile Bank of India, London and China was founded inBombay (now Mumbai). The acquisition in 1959 by The Hong Kong andShanghai Banking Corporation Limited of the Mercantile Bank was adecisive factor in laying the foundation for today's HSBC Group.

HSBC in India is proud to have retained the Group's pioneering streak by being an active partner in the development of the Indian banking industry -even giving India its first ATM way back in 1987. The organizationsadaptability, resilience and commitment to its customers have further enabled it to survive through turbulent times and prosper through good timesover the past 150 years.

ii)Service Offerings

a) Financial Planning Services

Inflation, falling interest rates and fluctuating market conditions require you

to plan your finances carefully. Celebrate important occasions in the future by managing your wealth well now. HSBC's Financial Planning Servicesoffer assistance to secure your future. Our financial planning services areavailable for existing HSBC customers and are free of cost.

b) Mutual Funds

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Use the proven expertise and insights of the world's local bank for your investments. We offer you investment options in funds that meet our selection criteria and fit your requirements, helping you create and increaseyour wealth potential in the long-term scenario.

c) Insurance

You have probably planned your life with great care, working slowly andsteadily towards fulfilling your dreams and ambitions. Unfortunately youhave no control over certain natural and man-made events that may overturnyour plans.

As you change so do your insurance needs. The insurance solution that isrelevant to you today may be very different to the solution you require yearsfrom now. It is therefore critical for you to identify protection needs that are

pertinent to you and your circumstances.

Religare

i) Introduction

Religare Enterprises Limited was promoted by the promoters of RanbaxyLaboratories Limited and it was originally incorporated as Vajreshwari

Cosmetics Private Limited on January 30, 1984. The name of the companywas changed to Religare Enterprises Private Limited on January 10, 2006.

Religare Enterprises Limited (REL), is one of the leading integratedfinancial services groups of India. RELs businesses are broadly clubbedacross three key verticals, the Retail, Institutional and Wealth spectrums,catering to a diverse and wide base of clients.

REL offers a multitude of investment options and a diverse bouquet of

financial services and has a pan India reach in more than 1550 locationsacross more than 460 cities and towns.

Bajaj Capital

i)Introduction

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Bajaj Capital is one of Indias leading Financial Services companies offeringFree Advice on Investments, Insurance, Tax Saving, Retirement Planning,Financial Planning, Childrens Future Planning and other services. They arealso SEBI-approved Category I Merchant Bankers.

Today, Bajaj Capital is a one of the largest financial planning andinvestment advisory companies in India, with a strong presence all over thecountry. They offer a comprehensive range of services including financial

planning and investment advice, and the entire gamut of financialinstruments and investment products of almost all major companies, both

public and private. In addition, they also provide investment assistance byhelping clients complete all the formalities, and help them keep regular track of their investments


a) Mutual Funds

b) Taxation Advise

c) Bonds

d) Post Office Schemes

e) Estate Planning

f) Insurance

g) Financial Planning

h) Retirement Planning

Bajaj Capitals 360 Financial PlanningFinancial Planning is becoming increasingly popular in developed countriesall over the world. Now, with a little help from Bajaj Capital, clients too cangive themselves the 360 Financial Planning edge! Now, Bajaj Capital

brings you the same service ABSOLUTELY FREE!

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Bajaj Capital's 360 Financial Planning Programme could make a differenceto all those who wish to lead a worry-free, financially secure life. 360Financial Planning is based on the premise that every individual has certain

basic financial needs that are expressed at various stages of life (getting

married, buying assets like homes, vehicles, or providing for your children'seducation and wedding).

Instead of investing in an ad-hoc manner, 360 Financial Planning helps youtake a holistic, all-round view. Briefly, 360 Financial Planning comprises:

Investment Planning: To make your wealth grow

Cash Flow Planning: To provide for assets and meet the periodic cashrequirements Tax

Planning: To save on taxes and increase your income

Insurance Planning: To protect yourself, your family and your assets

Children's Future Planning: To give your children a financially securefuture

Retirement Planning: Because retirement is a time to relax, not to getworried

Allegro Capital Advisors Private Limited

(i) Introduction

Allegro Advisors is a leading Indian full service investment bank that buildsvalue across a spectrum of clients, including the government, corporations,financial institutions, high net-worth individuals and professionals.

Comprehensive service offering

Investment Banking, Capital Markets, Asset Management & PrivateBanking

Ensuring client's financial well-being

(ii) Service Offerings

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The investment approach begins by working closely with the clients toidentify their long-term financial goals, risk tolerance and the nature of their existing asset base. Additionally, allegro review each clients portfolio on anongoing basis and evaluate possible adjustments in response to economic

changes, market trends or client needs.

Allegro ensures this highly personalized model of service by maintainingamongst the lowest client to advisor ratios in industry. Allegro offers one of the widest range of financial services that covers the spectrum of every needa client may have in managing his or her wealth. Our services arecategorized to serve diverse financial needs and the diverse investmentstrategies that are required to grow a clients wealth.

Allegro Growth: Designed for the young executive, it comprises a set of products and services that allow start up incomes maximize potential togrow in the long term. A special offering has been designed for workingcouples Allegro Equity: A pure equity offering with a unique strategy thatkeeps in perspective capital conservation through medium and longstrategies such as dividend yields, IPOs, buy-backs, value picks, sectoral

picks, growth fund opportunities etc. PMS is offered selectively

Allegro Wealth- A top of the line service offering that comprises theentire basket of services that include specialized equity advisory including

personal advise from our highly reputed advisory panel across taxation, debt,equity and money markets, automatic portfolio and rebalancingmanagement, insurance and loan advisory, access to a 8 hr 6 days a week helpline. Portfolio Management Services is offered selectively

IDBI Bank (Other Public Sector-Indian Banks) :

Industrial Development Bank of India (IDBI) is the tength largest bank in

the world in terms of development. The National Stock Exchange (NSE),The National Securities Depository Services Ltd. (NSDL), Stock HoldingCorporation of India (SHCIL) are some of the institutions which has been

built by IDBI. IDBI is a strategic investor in a plethora of institutions whichhave revolutionized the Indian Financial Markets.

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IDBI Bank, promoted by IDBI Group started in November 1995 with a branch at Indore with an equity capital base of Rs. 1000 million.

Main functions of IDBI

IDBI is vested with the responsibility of co-ordinating the working of institutions engaged in financing, promoting and developing industries. Ithas evolved an appropriate mechanism for this purpose. IDBI alsoundertakes/supports wide-ranging promotional activities includingentrepreneurship development programmes for new entrepreneurs, provisionof consultancy services for small and medium enterprises, upgradation of technology and programmes for economic upliftment of the underprivileged

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Comparative analysis of different players in the market

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RESEARCH METHODOLOGY

a) Title of the Study

Comparative analysis of various financial institutions in the market.

b) Objective of Study

To study the prospects of various financial products provided bydifferent financial institutions in the market. People should come out of theconcept of just keeping their money in Savings Account and Fixed Depositsand should concentrate on their financial planning to maximize returns bytaking proper guidance from financial planner.

c) Type of ResearchThis project is more of an exploratory research with more of qualitativeanalysis than quantitative. The data collection method for this project beginswith finding a sample of the population. The population for this project wasthe various places in Chandigarh. (sector 38,17,26,23,22 and Industrial AreaII)

The research methodology adopted was both Primary and Secondary.Primary data was collected to study the investment psyche of a person, their

practice on saving, investment options available and the need of financialinstitutions to manage individuals wealth.

Questionnaire was designed to ascertain the investors behavior as well as todepict the future prospects and growth momentum of the wealthmanagement industry.

d) Sample Size and method of selecting sample

Data Collection Methods & Instruments

The instrument for data collection was a structured questionnaire targetedtowards people who do investments. This questionnaire was designed toknow the investment psyche of a person while investing in the financial

products.

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The mode of communication was informal & friendly conversation, whichdoes not limit discussion within a well-defined boundary.

Data Collection Sources

i) Primary Research

Research was done to get a detail overview of the wealth managementindustry and study the need for financial planner in the current scenario.Questionnaire was designed to study the investment psyche of a person, their

practice on saving, different investment options available and the need of financial institutions to manage individuals wealth. This project is mainly

based on first hand observation in the market, the way financial planningfunctions, scope of financial planning and the need of a certified financial

planner.

ii) Questionnaire Design

A structured questionnaire was designed covering both open and close endedquestions, to study the perception of people regarding investment avenuesand the concept of financial planner. {Specimen of the questionnaire isattached in ANNEXURE A}.

iii) Secondary ResearchVarious sources of information were collected for attaining clarity on the

prospects of wealth management industry and the various financialinstitutions in the market. The source also includes basic investmentobjectives and the various types of investment avenues open to anindividual.

However the following sources were considered for information gathering:

Companies websites

Articles and reports available on the web

News papers like Economics Times and Investment Insurance Magazines

Various other sources mentioned in the references, in ANNEXURE B

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iv) Population considered for research

Sample Details

100 people belonging to different fields, who do investment, were asked to

fill the questionnaire, on the basis of which an attempt is made to study the prospects of FinancialPlanning in the market. The sample unit consists of those people who are trading in secondary markets, mutual funds, initial

public offer, insurance, debt instruments as they can give the accurateinformation about financial planning. A sampling frame has been developedso that everyone in the target population has an equal chance of beingsampled.

Personal Information:

Sex Ratio: From the total 100 respondents 15 were females and 85 weremales.

e) Scope of Study

There exist a potential growth in the wealth management industry and thusthis project authenticates the feasibility of financial institutions in themarket.

Expanding needs and proliferation of financial products are making itdifficult for individuals to invest without planning. Most are aware that

planning is critical; yet dont have the time or the expertise to develop a plan& therefore the role of Financial Planner comes in picture.

f) Limitation of the Study

The scope of the research was limited to top 7 wealth managementcompanies, namely YES Bank, Citibank, UTI Bank, HSBC Bank, HDFCBank, Bajaj Capital and Religare Enterprises Limited.

The sample area was primarily in Chandigarh and accordingly the responseis presumed to represent whole of India.

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The sample size comprised of 100 respondents from different fields andincome group, and their responses are presumed to represent the wealthmanagement mark

The score allotted by the different respondents on different parameter mightnot be with the same yardstick, as individuals are subjective in nature as wellas the environment round them differs, which play a critical role in buildingup a perception.

FACTS AND FINDINGS

It can be observed that most of the financial advisors are not charging anyfees for their advisory services i.e. they are giving it free of cost because the

banks (Citibank, UTI Bank, HSBC) earn commission if the customer purchases mutual funds, insurance, from it. The broking company earns brokerage if the client purchases RBI bonds etc or if he does any equitytrading. The bank only charges marginal fees on the custodial services.

However, HDFC Bank - instead of asking customers to bring in a specificamount of funds - charges customers on various types of services it offers.The management of wealth depends on the customer's risk appetite, hisinvestment objectives. Once these are understood, the bank sends a writteninvestment proposal on what the bank thinks the portfolio should be.

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Taxation advisory is given by very few players like Bajaj Capital, UTI Bank.Various banks have a tie-up model with different insurance and mutual fundcompanies like Citibank has with Birla so Citibank will only sell Birlainsurance to their clients irrespective of the fact whether the product meets

the clients financial goals. Allegro is one player which takes care of loanrestructuring. Commodity trading is only being handled by Religare as aseparate product as SEBI have not yet allowed commodity trading to be a

part of wealth advisory services.

However banks cannot offer portfolio management services to customers.This means that a customer cannot give money to a private banker and ask the RM to invest on his behalf in different financial products. This servicecan be offered only by entities other than a bank such as Religare, BajajCapital, etc. A banker therefore will have to call every time and get a writtenconfirmation from the client before any deal is done.

ANALYSIS AND INTERPRETATION

Given below are the graphical representations of the responses received onquestions asked through the questionnaire. The interpretation derived andthe model adopted will be explained in detail in the later part of the report.On asking the following questions, the replies were received accordingly:

8.1. What is your objective behind investments?

Investing is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The questionnaire asked therespondents to reveal their objective behind investments, majority of therespondents disclosed growth of capital as their prime objective while safety

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of capital stands secondary. This response reflects the investor willingness totake calculated risks for growth of their capital.

Objective Behind InvestmentNo of Respondents (in %)

Growth of Capital46.28

Tax Minimization14.05

Safety of Capital15.7

Retirement14.88

Liquidity2.48

Beating Inflation3.31Others3.31

8.2. Since when are you investing in financial instruments?

The respondents were asked as from when they have started investing infinancial instrument so as to ascertain the average period of experience of aninvestor in the market. The responses were then graphically which indicatesthat majority of the investors i.e.48.2% of the respondents have been

investing for more than 12 months and signifies that the responses revealedare from experienced and qualified investors which adds to the credibilityand reliability of the research.

MonthsNo of Respondents (in %)

Less than 3 months 10.84

3 to 6 month13.25

6 to 8 months9.64

8 to 12 months18.07

More than 12 months48.19

8.3. Do you plan your investments?

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To evaluate the level of importance the investor gives on detailed financial planning to arise in their investment decision, the respondents were asked toreveal whether theirinvestments are result of a careful planning or its a mereword of mouth. As many individuals follow word of mouth leaving behind

the fact that every individual has different financial goals, they tend up inmaking wrong decisions for their investments.

Most are aware that planning is critical, yet dont have the time or theexpertise to develop a plan and make the needed financial decisions.

On analyzing the response 84% of the persons plan their investments whileonly 16% take investment decisions on ad hoc basis.

Opinion of RespondentsNo of Respondents (in %)

Yes84

No16

8.4. What is your practice on saving money?

To determine the saving habits of the investors, the questionnaire enquiredthe respondents as about their practice of savings. The greater the inclinationof saving the more will be the funds available for investment.

Around 47.5% of the respondents try to save from their income, while only29.7% of the respondents always make an effort to save some part of their income.


Dont believe in Savings1.98

High Expenses19.8

Try to Save47.52

Always Save Some29.7

Others.99

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Only 2% of the respondents dont believe in savings, which substantiatehigh importance of savings in Indian households. However, it was alsoobserved that majority of the women respondents had high inclination for savings and try to save the maximum out of their available income.

8.5. How much thought have you given to saving for retirement?

Anyone who will retire needs to plan for it. There is more than one reason tosave for retirement. The all important reason is the rising cost of living. Itscalled inflation, whichsimply put, means that purchasing power of moneyfalls over time, so you buy less for the same amount of money or you haveto pay more for the same quantity of goods.

On analyzing the level of importance the respondents give on saving for retirement, majority i.e. 47% of the respondents give some importance whileonly 18% give a lot of importance to saving for retirement. This depicts nonserious attitude of Indians while planning for their retirement.


Some47

A Lot18

Very Little18

None17

8.6. When do you consider one should start planning for retirement?

If you start planning for retirement early on, you can bridge the gap betweenwhat you have in your hand today and what you would like to have whenyou retire. What to keep in mind while saving for retirement depends a lot

on our age and how much money you are willing to set aside every month. If you begin saving for retirement early on in your life, you can set asidesmaller amounts.

Planning for retirement in early age of employment is depicted on analyzingthe responses as 35.8% start planning below the age of 30 years, while42.1% of the respondents feel, the ideal age to be above 40 years.

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Below 3035.79

31 40 22.11

41 50 22.11

Above 5020

8.7. What do you feel is considered to be the fundamentally safe form of

investment?

On enquiring from the respondent about what are the fundamental secure

forms of investments, 35.4% of the respondents feel that investing in property is the safest form of investment followed by Insurance. The leastsecured form of investment as revealed by respondents is investment inequity as secondary market is subject to huge volatility & uncertainty

It can be seen from the response that people are more willing to put their money in property or real estate in spite of the economy experiencing amajor climb in the property prices.

About 14.4% of the respondents feel that Bank deposits is also the safe formof investments as it gives assured returns on the sum invested.


Bank Deposit14.37

Property35.33

Postal Deposit7.78

Gold3.59

Insurance15.57

Bonds12.57

Mutual Fund7.19

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Equity2.998.8.

How do you take financial decisions?

An individuals decision has a vital role to play in achieving investment

objectives and thereby making investments in a systematic manner.Decisions can make or break investment avenues as wrong decisions wouldmerely lead to wrong investments resulting in major loss.

On enquiring from the respondents about how they take their financialdecisions, majority of the respondents take their financial decisionsindependently which depicts they are not taking any advisory services fromfinancial experts. There are majority of respondents who feel that they canhandle their portfolio on their own and hence make their own decisionsregarding investments.


Independently48

Friends28

Broker1

CA7

Bank1

Financial Advisor11

Others4

8.9. Do you have any Insurance Policy?

Life is full of dangers, but with insurance, you can at least ensure that youand your dependents dont suffer. The purpose of buying insurance is to

protect your dependants from any financial difficulties in your absence. Ithelps individuals in providing them with the twin benefits of insuringthemselves while at the same time acting as a compulsory savingsinstrument to take care of their future needs.

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There are a number of financial advisors offering a diverse portfolio of services to suit different financial requirements of the individuals. In order toaccomplish the task, these companies provide the assistance of professionalfinancial advisors. The advisors educate individuals on the merits of a long-

term approach and regular investing and help to rebalance their portfolio.

On analyzing the response 78% of the respondents were aware aboutfinancial advisors while around 22% of the respondents were still not awareabout professional financial advisors which depicts there lays a scope to

penetrate these people and inform them regarding the services offered byvarious financial institutions


Yes78

No22

8.12. Do you currently avail financial advisor services/private banking

services?

Majority of the respondents are currently not availing financial advisor services, which reveal the concept of financial advisors is not that muchdeveloped in the Indian market.

Individuals are earning and paying high taxes thus ignoring the taxation benefits, which they can avail by proper computation of taxes. Individualsusually rely on Chartered Accountants leaving behind the fact that they areexperts in Accounting and not in wealth management so there is a need for Financial Advisors. Hence, there is a requirement for one stop shop for allthe financial needs of an individual.

According to the response, it can be seen that 66% of the respondents are notavailing any financial advisory services while only 34% are taking financialadvisory services. Thus theres much scope left for the financialmanagement companies to target these large number of people who aretotally unaware about the whole concept.

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Yes34

8.13. If yes, from whom?

To find out the various companies from where the investors get financialadvisory services & make their decisions regarding investments. This wouldreveal the preference the respondents have for different companies.

On analyzing the response, 73.33% of the respondents were primarilyavailing financial advisors services from Citibank and when they were askedthe reason behind, they replied Citibank provides free advisory services andhas got a strong brand name. Secondly 36% of the respondents were taking

financial advisory services from HDFC Bank followed by others whichinclude UTI Bank, SBI, ICICI Bank, etc which catered around 33.3% of thetotal sample.


Citi Bank73.33

HDFC Bank36.67

Allegro Advisors20

Bajaj Capital13.33

HSBC Bank16.67

Yes Bank 10

Religare 3.33

Others33.33

8.14. What are the products you are getting from your service provider?

According to our response, around 22% of the respondents are availingadvices on insurance products followed by mutual funds which hold 14.6%of the total sample. This depicts there is a huge demand for insurance in theIndian economy as compared to other financial instruments. It can also be

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inferred that individuals have started taking advises regarding tax planningand loans restructuring.


Mutual Fund14.63

IPO8.13

Equity8.13

Post Office Schemes11.38

Insurance21.95

Property7.32Tax Planning11.38

Loan9.76

Administration4.07

Gold2.44

Art0.81

CONCLUSION

This part of research paper determines the prospects of financial advisors inthe market with relevance to the information derived from analysis of theresponses. Feasibility of financial institutions can be studied by bothfinancial feasibility and marketing feasibility.

a) Financial Feasibility

Financial feasibility will study the need of financial advisors due to changesin the inflation rate, loans, insurance charges, etc which investors usuallyignored so by availing the financial advisory services, one can expectunbiased advise on the entire spectrum of personal finance and therebyadding value to the investors current portfolio and potential savings.

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The statistics regarding the investments are discussed below so as to showthe trend of various factors in the Indian economy.

i) Growing Economy

The anticipated growth rate of 6 - 7 percent in 2008-09, acknowledges themomentum of development in the Indian economy. The odds are loadedheavily in favor of a continuation of the growth momentum and a virtuouscycle of growth and savings, that appears to be already underway, is likely toaccelerate that pace.

India is the worlds second most populous country with a little over 1 billion people and the 10th in terms of economic size, representing around 6% of world GDP. The impact of 15 years of economic reform finally appears tohave kicked in and allowed India to emerge as an attractive investmentdestination in the global arena.

India, with an anticipated growth rate of 6 to 7 % for the year 2008-09,supported by robust growth in the Indian industries and service sector would

build a strong business scenario which would increase the economic activityin the country, evident from increased employment opportunities andentrepreneurship projects. As wealth management provide investors with

commentary, research, and practical ideas that bridge the gap betweentheory and practice in contemporary global business, it would result inincrease in the demand for financial advisors in the country, therebyauthenticating the prospects of financial advisors in the Indian market

ii) Strong Financial Market

India's financial markets have undergone rapid changes since the countryeBBArked on a program of economic reforms in 1991. They have embracedtechnology, seen a substantial increase in the variety and volume of transactions, and witnessed the emergence of new securities and newinstruments.

India witnesses growing number of venture capitalist bank which do nothesitate in investing in new projects and bear high risk with the entrepreneur.

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Therefore, the financial market scenario in India is conducive for procurement of funds for launching the business magazine in the market.

iii) Inflation

Inflation is moving at around 4% and the savings account is giving aninterest of 3.5% per annum which signifies that inflation is merely eating upthe money in the bank account so individuals should come out of justkeeping their money in their bank accounts and should invest in the financialinstruments to fetch higher returns.

b) Market Feasibility

Marketing feasibility involves determining the prospects of financial

advisors in the growing economy like India. The study includes assessingthe need of financial institutions to achieve all the individuals financialgoals and keeping these goals in mind how do they recommend certaininvestment options in the market in order to provide value additions toindividuals current portfolio & savings potential.

For assessing the satisfaction level of investors who are availing financialadvisory services, the performance of the current players in the markets will

be studied and their strength and weakness will be analyzed, If the investorssatisfaction level from the current advisor is less, then greater will be thefeasibility of prospects of financial advisors in the Indian market

After analyzing the response, marketing feasibility exist on the basis of following discoveries.

1.

Growth of Capital is the Major Objective behind Investments

It was observed that 46.3% of the respondents do investments for achievinggrowth of capital i.e. revenue maximization. Safety of capital wasconsidered secondary objective behind investments as only 15.7% of therespondents think about their safety of capital i.e. assured returns whichreflects that investors are more concerned for growth rather than safetyirrespective of their financial goals in life. A financial advisor can take care

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of all the financial goals in keeping three goals in mind, he can recommendcertain investment options ranging from mutual funds, insurance, IPO, post-office schemes, secondary markets, etc

2.Low saving PotentialOut of the total sample, around 48% of the respondents said that they try tosave money which depicts low saving potential among the Indian investors.They are not in the habit of saving on a regular basis as it was observed thatonly 29.7% always save some portion of their take home salary. Thefinancial advisor should promote regular savings among the investors so asto open various investment channels for them to fetch good returns.

3.Investors taking Financial Decisions Independently

Investors are taking their financial decisions independently without doingany financial planning which reflects the need for financial advisors whowill take note of and record all the financial goals and will simultaneouslywork out the money value for each of the goals.

Additionally, financial advisors can also set aside some money for contingencies medical and other emergencies in liquid form and invest therest in diversified portfolio so that the risk gets distributed.

4.High Awareness of Financial Advisors in the Indian Market

Majority of the investors i.e. 78% of the respondents were aware about theconcept of financial advisors but among them, very few investors haveactually gone for availing these services which shows lack of trust andconfidence in the services provided by the financial advisors in the eyes of general public. The financial advisors should find out the deficiencies andflaws in the current services being provided to the investors and attempt at

suggesting ways and means to remedy the same.

5.High Level of Satisfaction from Existing Financial Advisors

Majority of the investors were very satisfied with the services provided bythe existing service providers which primarily include Citibank, HDFCBank, HSBC Bank, etc.

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Thus it becomes evident that the satisfaction level of the investors is highfrom the existing advisors and thereby validates the prospects of financialadvisors in the Indian market.

c) Test of Hypothesis & ConclusionAs it could be seen from the above factors that investors are having lowsaving potential, growth of capital acts as a primary objective behindinvestments, investors taking financial decisions independently, high level of satisfaction from existing financial advisors, which depicts that there is aneed of financial institutions to approach these investors in a proper manner so as to provide value additions to the saving potential and portfolio.

The hypothesis holds true that there exist a potential growth in the wealthmanagement industry which represents huge prospects of financial advisorsin the growing economy like India.

To conclude, the above research substantiates both financial and marketingfeasibility for the prospects of financial advisors in the Indian market

RECOMMENDATION AND SUGGESTIONS

On studying the peculiarities of the wealth management industry and

analyzing the responses of the investors on their perception and expectationfrom a financial advisor, the following points are recommended which ageneral financial advisor should consider while approaching the people.

India is seeing a maturing financial environment. Interest rates have fallenand unlike in the past, options to attract savings exist through a spate of financial products and services that have differing risk/growth and assetaccretion propositions. It is becoming increasingly obvious to people thattheir money, in real terms, would fall in value if they were to keep their money in the bank. And hence the keenness to find out the right avenue thatwould help grows their savings or assets.

While this is becoming a universally undeniable desire, the fact is that some people dont have the knowledge and inclination to understand the financialmarkets and others dont have the time to follow them. This then leads to

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financial decisions being taken by individuals based on either relationshiphearsay or the sales call of a vendor.

a) Unbiased Advisory

Investment Advisory Services are in this business of managing the assets of individuals and corporations. However, the distinct model of services shouldenables the advisors to offer unbiased advise on the entire spectrum of

personal finance, keeping the clients interest foremost while doing so. Theinvestment strategies developed across perpetuity should outline a detailedfinancial plan with frequent reviews of investment decisions made to ensurethat portfolios are in line with what was planned.

b) Certified Financial Planner

Financial planning is a new animal in the Indian market. The big thing tohappen is the coming to India of the Certified Financial Planner (CFP) mark,owned by the Board of Standards in the US and licensed out to non-profitassociations in 18 countries, including the US, Canada, Australia and theUK. Leading financial playersasset management companies, banks, mutualfunds and insurance companies, forms these association

Another player in this space is the NSEs Certification of Financial Markets(NCFM), an arm of the National Stock Exchange that tests and certifiesinsurance and mutual fund agents.

A third institution, the Association of Mutual Funds (AMFI), is encouragingits agents to morph from distributors to advisors. Apart from the institutions,some individuals and small companies have set up practice anticipating thatthe market will move from an ad-hoc approach to a planned one

c) Financial Planning Should Be Encouraged

It is a process in which an individual sets long-term financial goals throughinvestments, tax planning, asset allocation, risk management, retirement

planning and estate planning. Most of us approach our financial lives like thedisorganized traveler who gets to his destination eventually and perhapseven enjoys the rough ride. We think we have a clear roadmap in mind, but

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(a) I dont believe in saving.

(b) Id like to save, but my expenses & financial commitments do not permitme.

(c) I try to save whenever & wherever possible.

(d) I always save some percentage of my take-home salary withoutexception.

(e) Others (please specify) ________________________________

5. How much thought have you given to saving for retirement?

(a) Very little (b) Some

(c) A lot (d) None

6. When do you prefer one should start planning for retirement?

(a) Under 30 (b) 31 40

(c) 41 50 (d) Above 50

5. What do you feel is considered to be the fundamentally safe form of investment?

(a) Bank deposits (b) Property/Land

(c) Postal deposits (d) Gold

(e) Life insurance policies (f) Government bonds

(g) Mutual funds (h) Equity/Shares

(i) Others (please specify) ________________________________

6. How do you take financial decisions?

(a) Independently (b) Advise from friends / relatives

(c) Broker (d) Advise from a Chartered Accountant

(e) Advise from a Bank (f) Financial Advisors

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(g) Others (please specify) ________________________________

7. Do you have any Insurance Policy?

(a) Yes (b) No

8. If yes, why did you buy an Insurance Policy?

(a) As a means of saving (b) As a means of saving tax

(c) For security against death (d) Others (please specify) ______________

9. Are you aware about the concept of Financial Advisors?

(a) Yes (b) No

10. Do you currently avail financial advisor services/private bankingservices?

(a) Yes (b) No, why _________________________

11. If yes, from whom?

(a) Citibank (b) HDFC Bank

(c) Allegro Capital Advisors (d) Bajaj Capital

(e) HSBC Bank (f) YES Bank

(g) Religare (h) others (please specify) ______________

12. What are the products you are getting from your service provider?

(a) Mutual Funds (b) Initial Public Offer (IPO)

(c) Secondary Market (d) Post Office Schemes/Debt

(e) Insurance (f) Real Estate/Property

(g) Tax Planning (h) Loans

(i) Administrative Services (j) Gold

(k) Art/Paintings (l) Others (please specify) ______________

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BIBLIOGRAPHY

The following companies and associations web sites were referred whilecollecting

information used in the research.

1. Internet Source

http://www.yesbank.in

http://www.citibank.co.in/

http://www.utibank.com/

http://www.hsbc.co.in http://www.religarewealthcare.com

http://www.hdfcbank.com

http://www.bajajcapital.com

http://www.online.citibank.co.in
http://www.online.citibank.co.in/http://www.online.citibank.co.in/

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