Wealth Management Plan

presented by:-Vinod KumarArun AdhanaDeepak BhatiNakul Kumar

Introduction • A professional service which is the combination of

financial/investment advice, accounting/tax services, and legal/estate planning for one fee.

• In general, wealth management is more than just investment advice, as it can encompass all parts of a person's financial life.

Introduction about Investor• Mr.Arun adhana is 32 and Manisha is 29 years of age.arun is a recently working in MNC

who now owns a small sign-making company. Manisha is a full-time teacher with the local school.

• They have two children (sparsh and khushi), who recently in school.• Risk bearing capacity• This gauges your ability to assume risk. Your willingness to assume risk is about

the same as your ability to assume risk.• There are two time frames for the investment portfolio. Both are considered to

be long-term.Because your health is excellent for your ages, your combined life expectancy is over 25 years.The second time frame occurs when the remains of the portfolio will pass to your heirs. The purpose of this investment account is to provide retirement income for Arun and Manisha Sample.

Future Plan• new vehicles every five to seven years.• A office in Great India place, Noida• A four bedroom flat in swarn nagri• Annual trips abroad• Children education from reputed college.

FINANCIAL PLANNING GOALS• Arun wishes to fully retire in 25 years, and

Mrs.manisha wishes to continue working part time while Arun is retired, until she reaches age 50.

• Our main financial goal is to maintain a balanced portfolio to provide adequate retirement income.

• Your stated annual retirement income goal is Rs. 80 lacs of net, after-tax. This income stream will be constructed to attempt to increase at an average annual inflation rate of around 3.0% over your life expectancy. This income stream will also be to attempt to continue through Arun’s age of 60.

FINANCIAL PLAN ASSUMPTIONS• Our current marginal tax bracket: 28%• Our average tax bracket: 25%• Average annual inflation rate: 3.0%• Bonds: 5%• Bond Mutual Funds: 4%• Equities: 6% - 10%• Annuities: 5%• Social Security Inclusion: 50%• Social Security COLA Rate: 2.8%• Arun’s Age to Collect Social Security: 67• Manisha’s Age to Collect Social Security: 67• Arun’s Life Expectancy: 100• Manisha’s Life Expectancy: 100• Personal Residence Growth Rate: 2.5%• Personal Property Growth Rate: 2.5%• Rental Real Estate Growth Rate: 7%• Inflation Rate of College Expenses: 7%

OVERVIEW OF NET WORTH REPORTS• The data used to generate your net worth snapshot comes from a combination of

personal interviews, your financial statements,assumptions, and estimates. These values change frequently, so there will always be an unavoidable level of inaccuracy inherent to these reports.

• Assets, cash value life insurance, and liabilities are all stated using current market values. Net worth is the result assuming that all assets were sold at their market values, no taxes were deducted, and then all liabilities were subtracted. This is an estimate of your current wealth.

Three Ways to Manage Financial Assets• The third phase of investment management is deciding how to manage your

investments. Since there are only three ways to go, it is critical to first understand the advantages and disadvantages of each. The three ways money can be managed are:

• 1) Market Timing: Whenever one makes an investment decision based on a forecast of a market, asset class, or security going up or down, market timing is being utilized. We are not proponents of market timing, since it is impossible to accurately predict market movements

• consistently over time.• 2) Security Selection: This is deciding which asset to buy or sell compared to

others of the same type. For example, deciding whether to buy a bond or a growth stock would be an asset allocation or market timing decision. Deciding whether to buy AMD or Intel would be a security selection decision, since both stocks are in the same asset class. Stock picking (or mutual fund selection) is the most common form of security selection.

• 3) Asset Allocation: The art and science of how money is to be divided between different asset classes to lower risk and increase returns. This is also known as optimizing an investment portfolio, making it more efficient.

Our Six-Step Investment Process• 1.) Asset Allocation - the First and Most Important Step- Deciding how to

allocate assets among broad asset classes - stocks, bonds, and cash - is the critical first step. More than investment selection or market timing, asset allocation accounts for 91.5%* of portfolio volatility and returns.

• 2.) Portfolio Design - The Search for New Sources of Return -We identify sources that exceed benchmark or index returns across equity, fixed income, and alternative investment portfolios. We categorize these alpha sources by the phase of the economic cycle (Recovery, Expansion, Stress, and Distress) in which they are expected to outperform.

• 3.) Investment Manager Selection - Delivering More Consistent Performance -Identifying, hiring, and managing specialist money managers helps deliver more consistent performance. Money managers who specialize in market niches understand not only where to seek opportunity, but also how to anticipate favorable and unfavorable trends. We develop forward-looking expectations regarding how a manager will execute a given investment assignment, and environments in which the related investment strategy should outperform or underperform.

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• 4.) Portfolio Construction and Management - An Integral Part of the Investment Process - Every segment of each financial market has different return potential & risks. Successful asset allocation requires diversifying the portfolio structure further across market capitalization, growth & value styles, and even alternative investments.

• 5.) We Never Ignore the Tax Implications of Investing• We maintain a keen focus on tax management to help control tax

implications within your portfolio and to help enhance after-tax returns. In the end, it’s not only how much money you earn — it’s also how much of it you keep. For this reason, we make tax sensitivity an ongoing process, from portfolio structure to manager selection, portfolio management and ongoing monitoring.

• 6.) Risk Management - Keeping Investment Progress on Track• Natural market movements often cause portfolio allocations to

―drift‖ from their original positions as different sectors of the market appreciate or depreciate over time. Also, your objectives may shift over time as your personal situation changes.