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8/6/2019 Table of Contents.docx Manish

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Dayanada Sagar Business School Page 1

Sl.

No

Particulars Page.

No1 List of Figures 3

2 Acknowledgements 4

3 EXECUTIVE SUMMARY 5

4 PROBLEM DEFINITION 6

5 APPROACH TO THE PROBLEM 7

6 Company profile 87 Research methodology

DATA ANALYSIS:

IFAs Demography

Asset under Management:IFAs business

Challenges to IFAAsset allocatio

CRM servicesFactors considered in IFA decision making:Impact of 0% entry loads on the business of the IFA:

Method and cost of acquiring, maintaining and developing clientele:

Use of MIS ToolsScope of expansion of IF business by aligning his interest with the

clients interestsBack Office Expense StructureAttrition rate

9

8 Recommendation and Suggestion 22

Table of ContentsTable of Contents


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Sl.

No Particulars

Page.

No

9 Appendix 2310 Bibliography 23

11 Questionnaire Used in Survey 24-25


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List of Figures:

Sl.

No

Particulars Page.

No

1 Age Profile of IFAs 9

2 Education Profile of IFAs 10

3 Number of years in Current Business 11

4 Number of Employees with IFAs 12

5 Clients Number of with portfolio worth in term of rupees 13

6 Business of IFAs 147 Investment in Equity Fund in terms of % of total asset 15

8 Investment in Debt fund in terms of % of total asset 15

9 Investment in Liquid fund in terms of % of total asset 15

10Various CRM Services provided by IFAs

18

11Important parameters which picking a fund

19

12Impact of 0% entry load on IFAs busines

19

13Opinion on variable pricing option

20

14Client Acquisition Method

20

15Back Office Expenses

21

16Satisfaction level of IFAs about their back office business model

21

17 Atritation rate 22


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Acknowledgement

I would like to thank Mr. Faizal Baig , bdh, sourthern Region , iFastfinancial india pvt. Ltd, for my project

Guide for mentoring me with his constant guidance and support. This

project would not have been possible without his unflinching

encouragement and supervision .i would like to record our gratitude

to Mr.Faizal for his supervision advice and guidance from the early

stage of this project as well as giving us extraordinary experiences

throughout the work

I want to thank my Teacher and internal guide PROF. JAHANVI K.N.

for her help in synthesizing and developing the material in this

project and for his overall management of this project without

whose help it would not have been possible for me to take the task

to his subsequent level.

We would also like thank to Mr. Joe in Bangalore office and Ms.

Sheeba Satish, HR Manager from Mumbai for their time to time help

and support above all, we would like to wish Ifast as an organization

to grow ahead and reach its pinnacle in facilitating the IFA business.


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EXECUTIVE SUMMARY

This report gives an insight into the IFA business in the city of Bangalore. It contains

detailed analysis based on the survey conducted on the IFAs all over the city. The report

includes analysis on various parameters like the challenges faced by an IFA and the scope for

expansion of IFA business by aligning his interest with the clients interests . It also contains

the classification of IFAs in the city of Bangalore on the basis of demographical factors like

age, educational qualifications and the number of years into their current business. The

reactions and the impact of IFA business due to regulations enforced by SEBI and zero

percent entry load has been studied to depth.

A detailed study on methods and cost of acquiring, maintaining and developing clientele for

IFA business is crucial to get an in-depth insight into the IFA business. The analysis based on

the survey conducted also includes research support, back office support, technology and th

logistics model of the IFA. The various factors consider in IFA decision making have been

analysed to give the right perspective of the IFA business.

This report shows that there is a tremendous scope in an IFA business as it remains a highly

untapped and an unorganised business. The growth in this business will be fuelled by the

rising India economy and a rise of disposable income of the clients.


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COMPANY PROFILE

iFAST Financial India Pvt. Ltd, a joint venture between iFast

corporation TE Ltd and deutsche banks asset management division ,

through deutsche asia pacific holding pte ltd (singapour) , has arrived

in india to offer an integrated wealth management platform to

independent financial advisers ( Ifas).

In the muture financial markets in us, Australia and UK the

independent financial advisory model that offers unbiased

investment advice and holistic financial planning with a wide product

selection in the dominant model in the financial advisory industry

with the largest assets under management. In Singapore, this trend is

emerged in 5 short years.

iFAST corporation Pte Ltd is singapores leading provider of

investment transaction and administration service for IFAs and the

largest distributor for mutual funds, we have precipitated the

phenomenal growth of the new independent financial advisory

model with our breadth of services and technology tools.


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PROBLEMDEFINITION

The ifast is the leading provider of transaction platform for mutual fund inSingapore, Hong Kong and Malaysia and gas just started its operation in India

There are basically four kind of channels in mutual fund distribution in India

1. Domestic and Forgein Banks2. National distributors3. Regional distributors4. Independent financial advisor (IFA)

It is the IFAs which the company is targeting in india for starting its operation

by providing them with an integrated front and back end support. It will help

them to get the real value which they deserve in terms of fee they charge

from the customer which is presently almost nill. By doing this they will be

creating a win win situation for all the stake holders.

Ifast wants to bring together all the IFAs providing pms service in India and to

empower them with in-house research so that they can help in product

selection , financial planning and asset allocation for their respective client.

Summer interns are required to do the study of the challenges of IFA in

Bangalore city in order to launch their product in Bangalore and to tap the IFA

market . study will focus on several aspects of IFA and thus will help IFAST

target the challenges faced by IFA

1. A complete new platform to deal with all the amc at single window2. Flexibility in product selection, redemption and switching between funds

as per need of client

3. Facility to track the client portfolio in order to suggest the best availablefund for investment

4. To get away with hassels of multiple form filling and unnexessary paperwork


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APPROACH TO THE PROBLEM:

IFA business wascategorisein eight dimension as fallows

To understand the various challenges faced by IFAs and to facilitate them

with necessarysolution byprovidingthem withbestofferings available

To facilitatebetterunderstandingoftherevenuemodel ofthe various IFAs

this will help in differentiating between the various type of IFAS

forexample : whatpercentagesofrevenuecome fromupfront income from

recurring level.

To understand the various implication (bothpositive and negative) due to

various SEBI policies.

Tounderstand therelationshipbetween theinvestor and the IFAs atbroader

level and suggest waystoimprovetherelationshipthroughthe new platform

To understand the means through which IFAs attract customers and to

facilitatethe IFA in acquiringmorecustomers

Tocomparetheuseoftechnology amongthe varioustypeof ifa and tohelp

them with better use and more judicious technology which support their

business

To compare the various advantage and disadvantages of the IFA business

comparetothebankersbusiness .

To understand the various back hand operation of the IFAs and devise

meanstoimprovetheirback office.

Each IFAs will bestudied on abovemention parameters. a questioner will be

prepared which will beused to collect secondary data through field work.

Based on collected data. Analysis will be done which will include various

analytical ?graphical models


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Research design:

Objective of this project is to study IFA business to get the insight

and understanding of their business. In order to achieve this

objective and exploratory research was conducted based on eightparameters, a questionnaire was develop which contain a total

number of 23 question (appendix, A) various scaling and

measurement techniques were used in the questionnaire. These

scaling were essential to understand the deep insight of the

parameter.

DATA ANALYSIS

Diagrame showing age profile ofIFAs

AGE NO. OF IFAs

>50 47

40-50 45

35-40 23

30-35 20

20-30 10


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ANALYSIS:

From the above table it is very clear that 47 ifa have age greater than 50 years.

45 ifa are within the age group of 40 to 50, 23 ifa are within the age group of

35 to 40 , 20 ifa are within the age group of 30 to 35, and only 10 ifa are withinthe age group of 20 to 30

Interpretation:

From the above it is clear that 2/3 of the ifa are above the age group of 40

year. and it is relevant that they have good amount of experience in their

business

Figure 2 representing education profile

Educational profile No. Of ifa

Graduate 100

Post graduate 25

professional 10

Under graduate 10


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Analysis:

From the above table we can find out that 100 number of ifa are graduate as their

educational qualification , 25 number of ifa are post graduate, 10 number of ifa

has professional qualification and 10 of them are under graduate .

Interpretation :

From the above table we can interpret that majority of the ifa are only graduated

as their educational qualification and very few have professional qualification or

are under graduate.

Figure representing year of business

Year Percentage

0-5 35%

6-10 46%11-15 6%

>15 13%


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Analysis:

Fromthe above wecan find outthat 35% oftheifa arein thebusiness from

theperiod of 0 to 5 years , 46% ofifa arein thebusinessbetween theperiod

of 6 to1

0 years , and only 6% arein thebusiness fromtheperiod of11

to1

5years and 13% ofifa arein thebusiness fromtheperiod ofmorethan 15

years.

Interpretation:

Fromthetable wecan interpretthatmostoftheifa arein thebusiness from

theperiod of 5 to10 years

Figurerepresenting numberofemployee withifa


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Number of employee IFA

30 1%

Analysis:

From the above table we can say that 95% of ifa has less than 10 employee,Only 2% ifa has 10 to 20 employee, and 2 %ifa has employee between 21 to

30 , and only 1% ifa has more than 30 employee.

Interpretation:

From the above diagram we can interpret that most of the ifa has employee

less than 10 and very few ifa has employee greater than 10


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Figurerepresentingclients worthbelow 10 lakhs

Clients IFA

0-100 43

101-200 39

201-300 18

>300 25

Analysis:

From the above table we can say that 43 ifa have less than 100 client worth of

10 lakhs . 39 ifa has client number from 102 to 200 worth of 10 lakh, 18 ifa has

client number from 201 to 300 worth of 10 lakhs and only 25 ifa has client

number more than 300 of worth 10 lakhs


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Interpretation:

From the above data we can interpret that most of the ifa has lclient number

less than 100 worth of 10 lakh . and very few of them has client more than 300.

Figurerepresentingchallenges faced byifa

Challenges to ifa./ rank

1 2 3 4

Volatile market 65 15 10 10

Limited access to exclusive product 10 20 35 35

Access to quality research 5 20 35 40

Client acquisition and service 25 30 30 15

Maintenance of cost effective back office 10 20 30 40

Over dependence in transaction based 10 25 20 45

Geographical constraint 5 10 15 70

Interpretation

From the above we can interpret and due to economy slowdown mutual fund

business was the hardest hit and thats why ifas have to suffer huge losses in

their business . so almost all ifa told that volatile market is the biggest

problem. Another important factor while we came across while studying ifast is

that they find it difficult to acquire clients and services this is the area where

ifast can pitch their product as it is service oriented products.


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Figure representing various service by IFA

Various service %of ifa

E statement

66%

Portfolio tracking and management 29%

Online access to their account 18%

Online access to fund transfer 9%

Analysis:

From the above chat we can find out that 66 percent of ifa provide E statement

to their client. 29 percent of ifa keep portfolio tracking and management of

their client asset. 18 percent of ifa provide online access to their account to

their client, and only 9 percent of ifa provide online access to fund transfer.


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Interpretation :

fromthe above analysis wecan interpretthatmostoftheclientprovidee

statementtotheirclient astheirmajorservice and very few ofthemprovide

online accessto fund transfertotheirclient.

Figurerepresenting

Analysis

Above table show that 74% clients were satisfy, 21% are neutral and 1% are

highly satisfy, so most of the clients were satisfy with there back office .

INTERPITATION

Most of the IFA are satisfy with there back office.


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Figurerepresentation ofback officeexpense

s.no BACK OFFICE EXPENSE TOTAL %

1 RENT (office, electricity and other fixed monthlycharges)

6.26%

2 Courier services, stationary . 4.08%

3 Telephone and other expenses, 4.44%

4 Employee compensation 6.16

5 Others. 3.39


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Analysis:

From the above table it is clear that ifa expense about 6 percent for the rent, 4

percent for courier and stationery ,4.5 percent for telephone expense, 6

percent for employee and other expense is 4 percent

Interpretation :

Rent is major component for an average.IFA but employee compensation is

bigger component among the bigger IFAs. Employee compensation is not an

issue with individual IFAs as they are working for themselves. So their cost

structure is entirely different than bigger IFAs.

Figure representation on sebi variable pricing


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S.no SEBIs proposal on variable pricing Total %

1

Others

0 .78%

2

Welcomes

14%

3Neutral

31%

4

Some what oppose

22%

5Strongly oppose

33%

Analysis:

From the above data , we can say that 33 percent ifa strongly oppose the sebi

strategy, 22percent oppose but not strongly, 31 percent of ifa were netural

and 14 percent of ifa welcome the sebi regulation

interpretation

A large % of IFAs said that by introducing variable pricing SEBIs only create

confusion in the mind of the customers and there will be a lost of trust which

will have huge negative impact on there business


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Recommendation and suggestion.

As we can see the above analysis that IFAs are facing challenges and

difficulties in present scenario , I would like to suggest that they can

overcome from this problem by using some platform available in

todays market, like KARVEY CAMES some private platform and Ifast

financial Pvt ltd .

I would recommended them to use ifast platform because this

platform enable them with the solution of all the above mentionproblems and also enable them to use much of the important time in

productive work.

Ifast financial will help them to expand geographically and help the

IFAs & client with online excess of their statement and records, ifast

financial also help IFAs to act like a bank and to give all services to

their client which banks are giving to their HNI clients , like transfer

of fund online, giving separate log in id to client. And providingstatement online.

By using Ifast financial platform ifa can reduce their back office

expense and reduce their logistic cost .and can give very very high

quality of service to their client.


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D d S B i S h l P 23

BIBLOGRAPHY:

www.Sebi.com

www.ncfmindia.com

www.ifastfinancial.com

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