Mudit Project Abmm

8/10/2019 Mudit Project Abmm

1/51

SUMMER TRAINING PROJECT REPORT

ON

A STUDY ON ADITYA BIRLA MONEY WITH SPECIAL

REFERANCE TO BEHAVIOUR OF HNI CLIENTS TOWARDS

WEALTH MANAGEMENT INDUSTRIES

UNDER THE GUIDANCE OF: UNDER THE SUPERVISION OF:

Mr Amit Chourasia Mr. Priyank Raj

SUBMITTED BY:

Mudit Malpani


2/51

ACKNOWLEDGEMENT

It is said, The most important single word is we and the zero

important single word is I.This is true even in todays modern era. It is

absolutely impossible for a single individual to complete the assigned job

without help and assistance from others.

It is my greatest pleasure to acknowledge sincere gratitude towards Mr.

Rajesh Soni (Regional Head) ADITYA BIRLA MONEY MART LTD, I

would like to thank Mr. PRIYANK RAJ (Sr. Relationship Manager and

Mentor), Mr. Shaqueel Ahmed (Sr. Relationship Manager), Mr. Rajat

Anandani (Relationship Manager), Mr. Rajat Gupta (RelationshipManager) Mrs.Ruchika Pal(Relationship manager), Mr.Ashish Gulati

(Relationship manager), Mr. Amrish Tiwari (Broker) and Mr.Vibhu

Sharma(operations) for the completion of the project work.

I would also like to acknowledge to my sincere gratitude to the Director of

my institute MS Sapna Popli and my project guide MS Shipra Jain for

helping me in this project work.

I am thankful to all of my friends and batch mates for their help in

completing this project work. Finally, I am thankful to my entire family

members for their great support and encouragement.


3/51

Table of Content

S no. Content Page no.

1 Declaration 4

2 Executive Summary 5

3 Introduction 7

4 Wealth Management 9

5 Significance of WealthManagement

16

6 Aditya Birla Group 18

7 Aditya Birla Money Mart Ltd. 22

8 Employee hierarchy at ABM 28

9 Financial planning 29

10 Research problem 39

11 SPSS Analysis 4012 Conclusion 46

13 Annexure 1 47


4/51

Declaration

I ,MUDIT MALPANI, Roll No. 12/311, student of SHRI RAM

COLLEGE OF COMMERECE,DELHI UNIVERSITY, hereby

Declare that the project report on A STUDY ON ADITYA

BIRLA MONEY WITH SPECIAL REFERANCE TO

BEHAVIOUR OF HNI CLIENTS TOWARDS WEALTH

MANAGEMENT INDUSTRY at ADITYA BIRLA MONEY

MART LTDis an original and authenticated work done by me.

I further declare that it has not been submitted elsewhere by

any other person in any of the institutes for the award of any

degree or diploma.

Name of the student: MUDIT MALPANI

Date: Jan 31,2014


5/51

EXECUTIVE SUMMARY

The purpose of this training was to have practical experience ofworking within the organization, in the field of finance andMarketing to have exposure to the important managementpractices.

While writing this report the language has been keep simple and

the entire discussion has been logical and has coherent outlines.

The main motto of the project work was A STUDY ON ADITYA

BIRLA MONEY WITH SPECIAL REFERANCE TO

BEHAVIOUR OF HNI CLIENTS TOWARDS WEALTH

MANAGEMENT INDUSTRY

Its very important to do fundamental analysis of the sector and

the particular company in which we want to invest our hard

earned money. Main motive behind making any investment is toearn good returns on the investment without taking much risk.

In order to achieve this we should know the basic fundamentals

of the company.

This project analyzes the varying perceptions of the HNI and

Ultra HNI Clients who invest their hard earned money into

different securities available with the help of the fund managers.

It includes thorough market Research in various plans of Aditya

Birla Money Mart Ltd. and in detail Consumer (Satisfaction)

Responses Analysis, by surveying number of consumers.

This project undertaken by me at ABMML was mainly to

understand about investment avenues like equity, mutual funds,

real estate, commodities significance among the financial


6/51

institutions and how to sell these financial services to the High

Net Worth Individuals by taking an appointments with them

and telling about the company as in who the company is really

and what it does.

The work done there was a pure sales job and required good

conversation skills and hard work as to tap HNIs is a very

difficult job and giving business every month is very important

for the employee working as an Relationship Manager.

In brief, I performed my project under the guidance and

supervision of ABMML, where I learnt effective marketing skills

Financial Analysis and Portfolio Management.


7/51

INTRODUCTION

Wealth Management is a service provided by financial

institutions to help High Net worth Individuals protect and grow

their wealth. This advanced investment advisory discipline

involves providing a diverse range of services, such as financial

planning and investment management, tax planning and cash

flow and debt management, based on client requirements.

There are two aspects to the wealth management process;protecting assets from creditors, market crashes or slowdowns,

taxes, lawsuits and other unexpected events, and growing asset

values through methods that actively manages risk and reward

profiling to clients needs.

Wealth Management help people determine their monetary

goals and development actionable strategies that could help

them realize their goals. It also defends their finances against

risk. Wealth management is a services designed specifically for

High net worth individual. The threshold for high net worth

varies by country and institution, but the most common

definition is individuals who have more than US $1 million in

assets, not including their home. Some HNIs have done well ingrowing their assets from a low base to their current levels, and

may feel that they can continue to manage their own portfolios.

However, as a persons wealth grow and/or the markets get more

challenging, it becomes increasingly difficult to realize the

expected returns.


8/51

With greater wealth comes greater investment options as well as

more complex risks and threats in terms of legal regulations,

taxation issues and opportunities for loss. The level of fear or

even outright panic that can be experienced grows with the sizeof the investment involves. Greater diversification is needed than

its earlier stages of investing. This is where independent

financial adviser or large corporate entities help their clients

through professional management.

Wealth Management Services

Wealth management offers the following services:

Investment planning: Assists you in investing your money

into various investment markets, keeping in mind your

investment goals.

Insurance planning: Assists you in selecting from various

types of insurance options and captive insurance

companies.

Retirement planning: is critical to understand how much

funds you require in your old age.

Asset protection: begins with your financial advisor trying

to understand your preferred lifestyle and then helping you

deal with threats, such as taxes, volatility, inflation,creditors and lawsuits, to maintaining this lifestyle.

Tax planning: Helps in minimizing tax returns. This might

include planning for charity, supporting your favorite

causes while also receiving tax benefits.

Estate planning: Helps in protecting you and your estate

from creditors, lawsuits and taxes. This service is critical for

every person whose net worth is high.


9/51

Business planning: This service aims at optimizing the tax

free advantages of running your own business.

Business succession planning: Assists in planning for the

inevitable to maximize returns. Wealth transfer: helps you pass on your wealth to your

dependents.

Benefits of Wealth managements

Wealth management helps in:

Reducing taxes associates with income, capital gains and

estate.

Protecting assets from misjudgments and creditors.

Improving yields with more diversification and less risk.

Managing liabilities such as mortgages and college

funding.

Market Picture

Indias GDP grew at an annual growth rate of 8% in 2011 and has

a strong growth outlook. This makes the country an attractive

investment location for wealth management firms. India has the

main components that comprise a high-growth wealth

management market, including: a very large and young affluent

customer base, an improving wealth situation among global

Indians, a goal to more tightly regulate financial services by the

Indian government, and an increasing share of organizedcompanies compared to the unorganized workforce. India


10/51

currently has the fourth-largest number of HNWIs in the Asia-

Pacific region, after Japan, China and Australia. There were over

250,000 HNWIs in India, which cumulatively owned assets that

valued over US$1 trillion in 2011. The volume of HNWIs in Indiaincreased at a compound annual growth rate (CAGR) of 7.20%

during the review period (20072011), while the total HNWI

wealth increased in value at a CAGR of 2.47%

The Wealth Landscape

The wealth management marketplace is evolving with theexpansion of an affluent client pool and increased competitioncreated through mergers, acquisitions and the introduction ofnon-traditional players. Wealth managers are setting businessgoals that require innovative technology solutions to help

increase sales, reduce costs, retain existing clients and attractnew ones. They are increasingly coordinating processes aroundtheir customers. They have long since realized the need tocarefully evaluate and quickly deploy the right technologysolutions to garner competitive advantage in the market. Theconsiderations to create or strengthen a customer centric modelare complex, but most firms have recognized that long-termsuccess is determined by an organizations ability to deliver

customer centric products and services. Wealthy individualshave multiple and complex financial needs. Banks geared tomeet their needs build long term relationships in which advice,as opposed to products and transactions, is the focus. Thesebanks establish multiple touch points with clients and typicallybenefit from enduring client loyalty and their predispositiontowards referrals to prospective clients. The primarydifferentiators are advisory capabilities, product breadth, andfacilitation of customer ease and convenience.


11/51

Expanding the wealth management canvas

The spectrum of offerings is spreading and the scope ofservices is widening significantly. A quick glimpse reveals: Delivery channels: Anywhere and anytime through branch/

call center / online / POS / PDA Personalized services: Advisory services, relationship

managers and financial planning experts to manage accountsand plan financial goals

Investment tools for customers and their financial planners to

manage wealth: Analyze portfolio, rebalance portfolio againstmodel portfolio, portfolio simulation and what-if tools

Product types: Traditional banking, traditional investmentproducts and alternate investments

Straight Through Processing: End-to-end transactionprocessing for investments

Tax planning: Country-specific tax and social security One-stop financial shop: Interface with market data vendors,

banks, depositories, clearing houses, custodians andbrokerage houses

Concierge services: Lifestyle related value-added services Customized views and reports: Portfolio specific or across

portfolios Consolidated view: Complete financial picture in one screen Strict adherence: Financial regulation, compliance and other

country-specific mandates Secure and trusted environment: Data storage

Increasing focus on advisory services

Private banking and wealth management customers are turningcautious with their investments as they seek better service

providers. The quality of service, reporting and investmentadvice remains some of the important selection criteria for


12/51

customers. Know all advisors, offering advice across differentproduct types, suggesting unique product bundling, predictingtrends in the local and as well as global markets and suggesting

investment protection mechanism, are key to the success ofwealth management services, today. With the frequent highsand lows in the markets, there is an apparent disconnectbetween advisors and customers. Advisors are turning towardsfact-based analysis and detailed case studies to bridge the gap.However, it would be pertinent to note that there is also agrowing trend towards Do-It-Yourself (DIY) services, whereknowledgeable customers are not fully dependent on the

advisory services provided by the bank. To provide such highlevels of service, banks are seeking assistance from systems thatoffer a holistic view of customer relationship across assets andliabilities, to tailor appropriate investment solutions.

Share of the pie

Wealth management clients are demanding comprehensive andtailored services, with bespoke investment options. They are alsokeen to maintain relationships with multiple banks, to compareofferings and opt for the best. Banks are sparing no efforts tostrategically transform their product offerings and services,while revamping their technology infrastructure to differentiatethemselves from competition. The wealth management space isnow being catered to by different types of firms including

brokers, private banks, retail banks and insurance houses, andall of them are vying for the sameclients - the booming mass affluent segment and the high networth segment. Wealth management firms are making strategicinvestments to differentiate themselves in the eyes of existingand would-be high net worth and ultra-high net worth clients.Insurance firms, brokerage service firms and retail banks areinvesting heavily on the advisor


13/51

Centric model and each one is trying to be the chosen wealthmanager for the retirement segment as well as for the youngergenerations. This has resulted in direct competition in a space

dominated, till recently by private banks and trusts. As a result,each of these players is looking at how best to differentiate itsofferings. Clearly, then, as wealth management firmsincreasingly compete for the same high net worth clients, andclients themselves become more demanding, the pressure is onfirms to understand the essence of client needs in existing andgrowth markets, even if they have already developed an accurateunderstanding of high net worth individuals in their established

markets. Without this insight, firms will find it difficult toDevelop an attractive proposition. As a result, banks are movingaway from the conventional pure product focus and focusing ontotal solutions that are completely oriented to client needs.

Asset allocations, product offerings andinnovations

The diverging investment environment in the two halves of 2007helped define high net worth asset allocation strategies. Basedon steady market returns from 2006, asset allocations of high networth individuals were biased heavily on riskier asset classes.However, onwards the end of 2007 and into the middle of 2008,the turmoil in the financial markets has forced investors to shifttowards safer, less volatile asset classes like cash deposits and

fixed income. Key trends in high net worth asset allocationstrategies include: Cash deposits and fixed-income securities seeing a jump in

asset allocations and currently accounting for 25% of theportfolio.

Equity holdings remaining more or less constant but seeing anincreasing trend towards private equity over public equity.

Percentage of allocation to alternate investments and realestate going down significantly.


14/51

Rapid changes in asset allocation strategies based on a dynamicmarket place have resulted in banks reviewing their product

offerings and offering innovations on current products, whiletrying to move client holdings to safer investments. Banks haverealized that product range and features are key differentiatorsin todays fiercely competitive and largely unpredictable market.The manufacture of products is not every banks cup of tea andthe gap in product offering is catered to by distributingproducts originating from other issuers. While manufacturingproducts is definitely the way forward, distribution income

continues to be a key revenue stream. The investment domainspans across a wide range of products and there is a definite shiftfrom traditional investments in funds, equities and fixed incometo alternate investments like structured products, real estate,private equity and hedge funds. Banks have also realized thebenefits of innovation in terms of product bundling andutilization of customers sleeping assets. Loan products bundledwith insurance, margin lending, self funding installments to gaingeared share exposure, and bundling of banking and investmentproducts are some interesting products on showcase.

The future lies in the current trends

Mass affluent and high net worth client segments willcontinue to grow their wealth but at the same time look at

more risk mitigated Strategies Acquiring and retaining clients and their assets with robust

client servicing are the key challenges for service providers Service providers have determined the criteria for success

but believe that adequate technology tools are still notavailable

Service providers are convinced that they need flexibleservice delivery models


15/51

IT strategy should evolve around the service deliverymodels

Service providers are taking a holistic view of their

technology infrastructure moving away from the productsilo approach.

Ultimately, the greatest success will be realized by those banksthat comprehensively understand their clients. They will be ableto leverage existing strengths to transform and adapt theirservice delivery and technology to cater effectively to clientneeds in their target growth markets. Without doubt,

technology is an importantEnabler in delivering efficient actionable advice, but it is only asupporting tool in the client-to advisor relationship, which playsa key role in managing the institutions customers. Other factorscontributing to the success of a wealth management strategyinclude the quality of advisors, the business model,organizational structure, customer segmentation and diversity ofofferings.

Significance of wealth management

Wealth management is a highly profitable and attractivebusiness, either on its own or as part of a more diversifiedfinancial enterprise. It uses relatively little capital, it does nothave the tail risk of other banking businesses like dealing or

lending, the base of global wealth is growing, and it generatesremarkable pre-tax margins of some 30-40% on the revenue baseand perhaps 40 basis points on assets managed. Many clients arelocked into the provider due to trust deeds, and an ageingpopulation may be looking for a new home for their wealth.

On the other hand, there is a high degree of polarization in

profitability between business segments and individual

firms. A McKinsey & Co. study notes that one third of its


16/51

broad sample of European firms experienced net funds

outflows in the down year of 2008, while some 45% were

net losers in the recovery year of 2009. Margins also differ

widely between offshore and on-shore banking andbetween the units of global banking institutions. Finally,

margins differ widely among geographic and product

markets.

Market volatility can create violent shifts in profitability.

Whether the brokerage or ad valorem fee models are used

as the basis for revenue generation, swings in market prices

in particular for equities can create substantial shifts inprofitability. Thus the meltdown of markets in 2008 was

followed by an almost equal upward surge in 2009. But

with virtually no new funds inflows or cost adjustment, the

net impact as indicated in McKinseys research produced a

47% collapse in the overall European profit pool from the

peak boom year of 2007 to the recovery in 2009.

Growing the pool of managed funds is a major challenge.While an estimated two thirds of the wealthy global

population is prepared to pay fees for wealth management,

there remains some $ 10 trillion in funds which are not. The

total net new funds inflow for the sector has been nominal

for the past few years. And the industry is highly

concentrated, with the top 10 global providers holding an

estimated 52% of the total market and the top 20 over 80%.

Creating and capturing product trends has become

increasingly difficult. Product innovation has increasingly

become a critical success factor. In Europe, for example,

research by Fitch Ratings indicates that 80% of mutual

fund providers have experienced zero net sales in recent

years. Demand has moved massively between products, and

only a handful of providers have been able to capture the

bulk of this demand.


17/51

Improving productivity and client service both provide

substantial challenges. Cost ratios have soared since 2007

as the fall in revenues has not been offset by increased

productivity, and incremental costs such as new regulationdirectly impact the bottom line. As one of our interviewees

notes, Private banking hasnt been industrialized yet like

other banking businesses.


18/51

ADITYA BIRLA GROUP

Aditya Birla Group is one of India's largest conglomerates with

US$ 35 billion presently headed by Mr. Kumar Mangalam Birla

and also claims to be the most international of the country's

major corporations. It was established in 19th century 1919 by

Ghanshyam Das Birlacompany acts as a holding company for

more than 72 manufacturing and services subsidiaries

throughout India and operates in 33 countries with more than

133,000 employees worldwide, the group has diversified business

interests and is dominant player in all the sectors in which it

operates such as: Viscose staple fiber, Metals, Cement, Viscose,

filament yarn, Branded apparel, Carbon black, Chemicals,

Fertilizers, Insulators, Financial services, Telecom, BPO, IT

services.

Organization

Aditya Birla Novo

Grasim Industries ltd

Hindalco Industries ltd

Ultra Tech Cement ltd


19/51

Aditya Birla Minacs Worldwide ltd

Aditya Birla Chemicals ltd

Utkal Alumina International ltd Dahej Harbour & Infrastructure ltd

Aditya Birla Finance ltd

Aditya Birla Money

Aditya Birla Insurance Brokers

Aditya Birla Capital Advisors Pvt ltd

Idea Cellular ltd

Madura Fashion and Lifestyle

Essel Minning and Industries

Aditya Birla Group Power Projects

Aditya Birla Money Mart Ltd

Aditya Birla Money is a part of Aditya Birla Financial ServicesGroup headed by Mr. Sudhakar Ramasubramaniam ABMM is anintegrated financial services group, with a range of solutions.Subsidiaries of Aditya Birla Financial Group are as follows:

1. Birla Sun Life Insurance

Complete suite of life insurance products

One of the leading insurance companies

2. Birla Sun Life Mutual Funds

Mutual Funds and PMS

5th largest AMC in India


20/51

3. Aditya Birla Capital Advisors

Private Equity

Well positioned to generate high returns through rigorous

selection of companies

4. Aditya Birla Finance

Lending Products for Private and Corporate Clients

5. Aditya Birla Money

Common brand for ABML and ABMML.

A leading Broking player

6. Equity, commodity, currency andderivatives

A range of 3rd party financial products

Wealth ManagementAditya Birla Money believes that individuals differ in theirinvestment needs depending on their financial goals, risk takingability and time horizon available to meet these goals. To caterthese different needs Aditya Birla Moneys solutions provideindividuals the flexibility to make investments based on onesindividual financial goals.

Vision

Aditya Birla Moneys goal is to be the premier wealth

management organization in the India, offering high qualityproducts, providing outstanding in services and attracting,motivation and retaining talented individuals

Principles

Our most valuable assets are the trust and confidence of ourclients. In responding to their needs, we strive to provide them

with the highest quality products superior investmentperformance and the best level of our industry.


21/51

BRIEF REVIEW OF ADITYA BIRLA MONEY

MONEY has fundamental significance in life of human being.

Aditya Birla Money Mart Limited A wholly owned subsidiary of Aditya Birla Nuvo, an Aditya

Birla Group company

A premier wealth management & distribution companythat emphasizes on investment advisory and financialplanning

Product range includes mutual funds, life insurance andother instruments like RBI Relief Bonds, bonds of publicfinancial institutions and initial public offerings of equityand debt securities structured products

Direct presence through its own branches (47) andadditional reach through its network of Business Associates(7800+) in over 35 cities

A trusted investor base of over 3.25 Lacs & AUM ofRs.22000 Crs

Identification of Target Segment Any person who can investin various schemes of Aditya Birla become its market. But, it isimperative on part of its marketing and sales department toclearly define its TARGET market so that greater thrust can begiven to those lots of investor for achieving better results.INVESTOR can be classified as follows:

High net worth individuals

Foreign institutional investor

Corporate houses

Government institution

Retail investor


22/51

As target market for Aditya Birla Money is High Networth

Individuals, it is important for all its employees to understand

hidden or unhidden needs of its target market.

Managing investments in equities requires time, knowledge,experience and constant monitoring ofstock market.Those whoneed an expert to help to manage their investments.

Products offered by Aditya Birla Money Mart

Mutual funds:A Mutual Fund is a body corporate registered with SEBI(Securities Exchange Board of India) that pools money fromindividuals/corporate investors and invests the same in avariety of different financial instruments or securities suchas equity shares, Government securities, Bonds, debenturesetc. Mutual funds can thus be considered as financial

intermediaries in the investment business that collect fundsfrom the public and invest on behalf of the investors.Mutual funds issue units to the investors. The appreciationof the portfolio or securities in which the mutual fund hasinvested the money leads to an appreciation in the value ofthe units held by investors. The investment objectivesoutlined by a Mutual Fund in its prospectus are binding onthe Mutual Fund scheme. The investment objectives specifythe class of securities a Mutual Fund can invest in. MutualFunds invest in various asset classes like equity, bonds,debentures, commercial paper and government securities.The schemes offered by mutual funds vary from fund tofund. Some are pure equity schemes; others are a mix ofequity and bonds. Investors are also given the option ofgetting dividends, which are declared periodically by the

mutual fund, or to participate only in the capitalappreciation of the scheme
http://www.kotaksecurities.com/http://www.kotaksecurities.com/http://www.kotaksecurities.com/http://www.kotaksecurities.com/


23/51

Equities:

Equity trading is the buying and selling of company stock

shares. Shares in large publicly-traded companies arebought and sold through one of the major stock exchanges,such as the Bombay Stock Exchange, National StockExchange, which serve as managed auctions for stocktrades. Share or stock is a document issued by a company,which entitles its holder to be one of the owners of thecompany. A share is issued by a company or can bepurchased from the stock market.

Share marketwhere dealing of securities is done is knownas share market. There are two ways in which investors getsshare from market:

Primary market: markets in which new securities areissued are known as primary market. This is part ofthe financial market where enterprises issue their newshares and bonds. It is characterized by being the onlymoment when the enterprise received money inexchange for selling its financial assets.

Secondary Market: Market in which existingsecurities are dealt is known as secondary market. Themarket where securities are traded after, they areinitially offered in the primary market. Most trading isdone in the secondary market. The Stock Market is aninvisible market that trades in stocks of various

companies belonging to both the public and privatesectors. The Indian Stock Market is often referred toas the Share Market since it deals primarily withshares of various companies. A Stock Exchange is aplace where the stocks are listed and traded. Suchexchanges may be a corporation or mutualorganization which specializes in the business ofintroducing the sellers with the buyers of stocks and


24/51

securities. The Indian Stock Market in India comprisesof two stock exchanges:

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

BOMBAY STOCK EXCHANGE (BSE)The Bombay Stock Exchange (BSE) was established in 1875.TheBSE India Stock Exchange serves as the most important forcompanies to raise money. The chief function of the StockMarket of India is to help raise money as capital for the growth

and expansion of various private and public sector enterprises.Besides, the Stock Market of India provides able assistance to theindividual investors through daily updates on current position ofthe stocks of the respective companies that are enlisted in theStock Index in which the movement of prices in a section of themarket are captured in price indices. The popular acronym forStock Index is Sensitive index or sensex. Moreover, the liquidityprovided by the exchange enables the investors to sell securities

owned by them easily and quickly. Hence a person, who issubjected to sudden dearth of funds, can immediately sell hisshares for cash in India Stock Market. The BSE Sensex, alsoknown as BSE 30 is a widely used market index not only inIndia but across Asia. In terms of volume of transactions, it isranked among the top five stock exchanges in the world.

NATIONAL STOCK EXCHANGE (NSE)The National Stock Exchange of India Ltd. (NSE), set up in theyear 1993, is today the largest stock exchange in India and apreferred exchange for trading in equity, debt and derivativesinstruments by investors. NSE has set up a sophisticatedelectronic trading, clearing and settlement platform and itsinfrastructure serves as a role model for the securities industry.The standards set by NSE in terms of market practices; products

and technology have become industry benchmarks and are being


25/51

replicated by many other market participants. NSE provides ascreen-based automated trading system with a high degree oftransparency and equal access to investors irrespective of

geographical location. The high level of informationdissemination through the on-line system has helped inintegrating retail investors across the nation. The exchange has anetwork in more than 350 cities and its trading members areconnected to the central servers of the exchange in Mumbaithrough a sophisticated telecommunication network comprisingof over 2500 VSATs. NSE has around 850 trading members andprovides trading in equity shares and debt securities. Besides

this, NSE provides trading in various derivative products such asindex futures, index options, stock futures, stock options andinterest rate futures. In addition to these organizations there areother organizations highlighting on the share trading in theIndian Stock Market are:

Commodities: Do you think gold prices will go up further?Are you sure that crude oil prices are going to fall? Have youheard that the soya crop this year is bad and will result insoya prices going up? If you believe that these predictionshave a good chance of coming true and are willing to betsome money on them, you could try your hand at playingthe commodity futures market. A commodity is a basicgood representing a monetary value. Commodities are mostoften used as inputs in the production of other goods or

services. With the advent of new online exchange,commodities can now be traded in futures markets. Whenthey are traded on an exchange, Commodities must alsomeet specified minimum standards known as basic grade.

Types of Commodities Precious Metals : Gold and Silver

Base Metals : Copper, Zinc , Steel and Aluminum


26/51

Energy : Crude Oil, Brent Crude and Natural Gas

Pulses : Chana , Urad and Tur

Spices : Black Pepper, Jeera, Turmeric , Red Chili

Others : Guar Complex, Soy Complex, Wheat and Sugar

4) Bonds: Bonds refer to debt instruments bearing interest onmaturity. In simple terms, organizations may borrow funds byissuing debt securities named bonds, having a fixed maturityperiod (more than one year) and pay a specified rate of interest(coupon rate) on the principal amount to the holders It is a fixed

income (debt) instrument issued for a period of more than oneyear with the purpose of raising capital. The central or stategovernment, corporations and similar institutions sell bonds. Abond is generally a promise to repay the principal along with afixed rate of interest on a specified date, called the MaturityDate.

5) Portfolio Management Services (PMS): Portfoliomanagement service (PMS) is a type of professional serviceoffered by portfolio managers to their client to help them inmanaging their money in less time. Portfolio managers managethe stocks, bonds, and mutual funds of clients considering theirpersonal investment goals and risk preferences. In addition tomoney, the portfolio managers manage the portfolio of stocks,bonds, and mutual funds. Successful investing in Capital

Markets demands ever more time and expertise. InvestmentManagement is an art and a science in itself. PortfolioManagement Services (PMS) is one such service that is fastgaining eminence as an investment avenue of choice for HighNet worth Investors (HNI). PMS is a sophisticated investmentvehicle that offers a range of specialized investment strategies tocapitalize on opportunities in the market. The PortfolioManagement Service combined with competent fundmanagement, dedicated research and technology, ensures a


27/51

rewarding experience for its clients. India info line PMS bringswith it years of experience, expertise, research and the backing ofIndia's leading stock broking house. At Angel, experienced

portfolio management is the difference. It will advise you on asuitable product based on factors such as your investmenthorizon, return expectations and risk tolerance.

6) Loan: A loan is a type of debt. Like all debt instruments, aloan entails the redistribution of financial assets over time,between the lender and the borrower. In a loan, the borrowerinitially receives or borrows an amount of money, called the

principal, from the lender, and is obligated to pay back or repayan equal amount of money to the lender at a later time.Typically, the money is paid back in regular instalments, orpartial repayments; in an annuity, each instalment is the sameamount. The loan is generally provided at a cost, referred to asinterest on the debt, which provides an incentive for the lenderto engage in the loan. In a legal loan, each of these obligationsand restrictions is enforced by contract, which can also place theborrower under additional restrictions known as loan covenants.Acting as a provider of loans is one of the principal tasks forfinancial institutions. For other institutions, issuing of debtcontracts such as bonds is a typical source of funding.

7) Insurance: Insurance is a basic form of risk managementwhich provides protection against possible loss to life or physical

assets. A person who seeks protection against such loss is termedas insured, and the company that promises to honor the claim,in case such loss is actually incurred by the insured, is termed asInsurer. In order to get the insurance, the insured is required topay to the insurance company (i.e. the insurer) a certain amount,termed as premium, on a periodical basis (say monthly,quarterly, annually, or even one-time).


28/51

Employee Hierarchy at ABM

Relationship Manager

Relationship Manager

Senior Relationship Manager

Area Manager

Area Manager

RegionalHead

Zonal Head

Country Head


29/51

Aditya Birla Money Financial Planning

Introduction to Financial Advisors

Planning for a secure financial future is not easy. Yetincreasingly, individuals are in charge of their own financialfutures. Most are aware that planning is critical, yet dont the

have time or the expertise to develop a plan and make theneeded financial decisions. So there arises a need forFINANCIAL ADVISORS to manage the individuals wealthand the whole process of managing this wealth is known asWealth Management.There are a number of financial advisors offering a diverseportfolio of services to suit different financial requirements oftheir clients. In order to accomplish the task, these companies

provide the assistance of professional financial advisors. These


30/51

financial advisors help individuals or corporate manage theirwealth appropriately through:

1. Investment Solutions: The financial planner helps the

individuals diversify their portfolio through alternativeinvestment plans, mutual funds, equities, and even savefor retirement through annuities.

2. Financial Planning: Financial Planning is an exerciseaimed to ensure availability of right amount of moneyat the right time to meet the individuals financial goals.Financial planners plan individuals current

expenditures and save for future short-term or long-term goals by analyzing different options available.

3. Retirement Planning: The financial planner guides theirclients in planning for their financial requirements afterretirement, by helping them identify goals, researchingand analyzing different opportunities to secure fundsand make investments to suits their needs.

4. Wealth Management: It is a comprehensive service tooptimize, protect and manage the financial well-beingof an individual, family or corporation. Its basicdefinition covers advice on loans, investments andinsurance to give a broad picture of how individualsshould best deploy their financial resources. A broader

picture may include tax advice, estate planning,business planning, charity foundations and otherfinancial needs.

Even though one of the most significant factors in our life isthe state of our personal finances, we rarely spend time onmanaging them since unlike businesses. The reason being, weare not accountable to any one for our personal financial goals

and results. As a result we tend to get careless in our financial


31/51

matters. I know we all understand the importance of savingsbut let us not get confused between savings and investment.Mere savings (putting aside a portion of earnings) do not

insure or guarantee achievement of future financial goals. It isimportant to save but more important is to invest yourmoney. By merely stashing away money into thatneighbourhood bank's savings account, you are neithermaking any more money, nor preserving its value. Theinflation rate at around 4-5 per cent p.a. in excess of yourbank savings account rate at 3.5 per cent p.a. mercilesslyerodes your wealth to that extent. The purchasing power of

rupee keeps depreciating. So, to fight against suchdepreciation one has to invest the money saved in assets thatwill help it work for you and earn more than the erosion invalue through inflation over a period of time. That's just oneof the primary reasons why each individual should invest.Another more definitive reason is the 'Power ofCompounding'. Put simply, it means that "Interest onInterest is Interesting". Let me explain this by means of asimple example.

Financial Planner (Wealth Planner / Financial Advisor):The financial planner helps identify various taxable and non-taxable investments. This is not a comprehensive list ofservices. They may differ from one financial managementcompany to another. One can select the services according to

their requirements, be it personal or professional.A financial planner work begins with a consultation with theclient, from whom the planner obtains information on theclients finances and financial goals. The planner thendevelops a comprehensive financial plan that identifiesproblem areas, makes recommendations for improvement,and selects appropriate investments compatible with theclients goals, attitude toward risk, and expectation or need for

a return on the investment. Financial planners usually meet


32/51

with established clients to update them on potentialinvestments and to determine whether the clients have beenthrough any life changessuch as marriage, disability, or

retirementthat might affect their financial goals.Finding clients and building a customer base is one of themost important of a financial planners job, because referralsfrom satisfied clients are an important source of new business.Many planners also contact potential clients by givingseminars or lectures or meet clients through business andsocial contacts.

1. Need for a financial planner:

Holistic in outlook: CFPs consider all circumstances,family needs, goals, values, and aspirations, whilemaking recommendations.

Professionals: CFPs protect privacy, strive to maintainthe highest ethical standards and continually enhanceskills and credentials through continuing education.

Educational in nature: CFPs guide one through optionsand explain the clearly to help make the best choices.

Committed to success: Holistic financial planning is aprocess, not an event, and commit to adjusting plan aslife goals change.

2. Role of Financial Plannersa) Defining your Goals - A planner will take note of and

record all your financial goals. You save for a variety ofreasons: to buy a house and a car, to educate yourchildren, to set them up in business, to get themmarried, to go on vacations, and, finally, to giveyourself a comfortable life in retirement. But not all ofus get around to defining what comfortableretirement means or good education means in moneyterms. The planner will help you work out the money

value for each of your goals. You might want Rs.30


33/51

lakh for a house today, Rs.5 lakh for a car next year,Rs.10 lakh for your childs education in 10 years, Rs.5lakh for his marriage in 15 years and Rs.50 lakh for

your retirement in 20 years. Additionally, youll setaside money for contingenciesmedical and otheremergenciesall your life, perhaps in cash or virtuallyas liquid. You also need insurance for yourself, yourfamily and your property.

b) Saving for them - Once these goals are written down,you can clearly see what you need to save today tomeet these goals. The concept of savings changes

from something thats left over to something thatyou target every month. The planner helps with yourbudgeting by making you write down your incomeand expenses in great detail. He helps you rationalizewasteful expenses and establish a system of generatingsurpluses every month. Once you see the magnitudeof your investment goals and the need to saveproperly, the desire for the latest in everythingdiminishes. In other words, planning is about creatingwealthand managing it efficiently.

c) Covering Risk - The planner then assesses yourinsurance needs, which varies from person to personand from age to age. As a young bachelor with nodependants, youll need disability insurance rather

more than life insurance, but the minute you getmarried and you have a stay-at-home wife whom yousupport, you need life insurance as well. When thekids come along and your old parents too becomeyour dependants, the outlay on your life insurance willhave to increase, as will that on disability. The plannerwill help you identify your insurance needs, quantifythem and then suggest policy options.


34/51

d) Planning for Retirement - The planner then looks atyour retirement needs and plans for the time whenyoull no longer be earning. Your contributions to your

EPF and PPF accounts will, of course, help you on thatcountprovided youve been disciplined and not madewithdrawals from these accounts halfway through.

A planner will help you quantify in money terms thecomfortable retirement you dream of. Hell thenwork out how much you need to save every monthand at what rate it needs to grow to hit the target.

More important, the planner will work with you tokeep your short-term financial needs in check so thatyou dont touch your retirement funds at all. Hisjob isto make you understand that retirement funds areonly for the future, when you have no other source ofincome, and that dipping into it prematurely is veryrisky.

e)Making It Happen - The planner has taken so long justto establish what you want out of life in money terms;even now, the actual investment is two steps away.The planner will now assess your risk profile. This isjust a way to see what level of risk youre comfortablewith. It would depend on your age and your familycircumstances. For example, a person in his mid-30scan take far greater risk than a man in his 60s. Based

on the goals, the savings and the risk profile, theplanner will then chart an asset allocation strategythat is, help you decide the percentage of your totalportfolio you want to put in different instruments:property, equity, debt, or funds that invest in theseassets.

f) Total Financial Solutions -A planner has a big picture

vision and is able to see the inter-linkages of all your


35/51

goals, expenses and investments. For example, if aperson is earning well and has a non-working wifewith two kids, theres no problem if he takes a home

loan and a car loan. But what if he dies next year? Hislife insurance will take care of his familys livingexpenses, but how will his family pay off the loans? Aplanner would make provisions for such aneventuality and increase the insurance amount tocover the debt as well. The planner will also help youfigure out what impact reducing a Rs.15,000 homeloan EMI to Rs.10,000 would have on your retirement

kitty. And what impact downgrading a Corsa to aSantro would have on your childs education corpus.

g) The Balancing Act - A planners responsibility doesnt,however, end with your buying a product. He still hasto hand-hold you, for instance, when the stock markettanks or tops. Imprudent investors tend to buy whenthe market is high and sell in a slump. The plannereducates you on the merits of a long-term approachand regular investing and helps you rebalance yourportfolio. For example, you may have agreed on a60:40 equity-debt allocation, but a steady rise in thestock market over a couple of years, which mayincrease the value of your stocks portfolio, may skewyour asset mix to 70:30 in favour of equity. That high

an exposure to equity may not be good for you, butleft to yourself, you might get carried away andwithdraw completely from debt and hike the equitycomponent of your portfolio. The planner will step into remind you of your risk profile, your investmentgoals and your long-term approach. In rising markets,financial planners do the work of circuit-breakers inthe stock market: they temper their clients unrealistic

expectations and keep them on track.


36/51

Financial Planning

Financial planning is the process of charting out the moneycourse of your life. Its like having a financial roadmap thatguides your every step till you pass on the baton to the nextgeneration. In other words, it is a process in which anindividual sets long-term financial goals through investments,tax planning, asset allocation, risk management, retirementplanning and estate planning. Most of us approach ourfinancial lives like the disorganized traveller who gets to his

destination eventually and perhaps even enjoys the roughride. We think we have a clear roadmap in mind, but ourfinancial lives are marked by ad-hoc decisions andcapitulation to the temptations of the flavours of the financialseason.

1. Benefits of Financial Planning

A sound and meticulous Financial Planning will havefollowing enumerated benefits:

Sophisticated financial advice to cope with changing lifesituation

Non-biased opinion on ones insurance needs Help dealing with ones retirement planning Optimum asset allocation and investment strategy

formulation

Efficient tax strategy and estate planning

2. Scope of Financial Planning

Sometimes it so happens that when one consulted with afinancial advisor in the past he felt that he was asked to buysomething he didnt fully understand. Maybe he felt thatproducts were recommended without consideration for his

overall financial situation. In cases like this,


37/51

comprehensive, holistic, fee-only financial planningeliminates such concerns. A person receives objectiveadvice targeted to his needs and goals.

One of the myths regarding financial planning is that onlyrich individuals and HNIs can undertake this. Thisperception exists because most players in the market targetthese people, as they are very profitable customers.However, anyone can use financial planning. In fact,individuals should use effective financial planning to buildtheir wealth over the years.

There are financial planners who service small individuals too.However, individuals need to remember the financial plannerscharge for the services they render, so they should be ready topay for the advice.

A financial planning exercise ensures you get the benefit of acustomized portfolio that addresses your specific financial needsand goals. At Aditya Birla Money, we map your needs, riskappetite and expectations to create your individual, uniqueportfolio:

Investment plan With a keen insight into your short- andlong term goals, we build a suitable asset allocation plan.Armed with this plan, your Relationship Manager thenworks closely with you to rebalance your portfolio.

Portfolio construction Our dedicated Wealth Managerwill take you through every stage of the investment process,always ensuring that the health of your portfolio is nevercompromised. We execute a tailor-made investmentstrategy across the breadth of your investment portfolio,maintaining complete confidentiality at all times.

Portfolio maintenance Your Wealth Manager will

proactively monitor the state of your portfolio, periodically


38/51

re-evaluating each account. This ensures that you get timeto react to market fluctuations. A carefully craftedalternative investment strategy can be devised to capitalize

on changing market trends.

Portfolio reviewYour portfolio is periodically reviewed, sothat your current investment horizon can be smoothlyrealigned to stay in line with the changes in yourinvestment needs, patterns and goals.


39/51

Research Problem

This Research problem answers about the behaviour of HNIs and

gives the reasons responsible behind their investment it alsoanalyzes the varying perceptions of the HNI and Ultra HNI

Clients who invest their hard earned money into different

securities available with the help of the fund managers.

The project will throw light on the various factors leading to the

growth of high net worth individuals (HNIs) and the bright

future of wealth management. The outcome will helpRelationship managers is focusing the key factors at time of

interaction with the Prospects this will lead to high probability

in converting prospects into clients or investors

Scope and Importance

Wealth Management is concern with organizing once wealth in

the best possible manner, Its been found that in India there is

6% growth in no. of millionaires which means more wealth to be

managed so as to get benefitedin future, wealthmanagement

is not restricted to future benefit only it also gives tax shield till

the money is invested. This research will provide RMs with

better strategies of tabbing prospects or clients.

Methodology

The methodology Ill be using as per the suitability of this

problem will be FACTOR ANALYSIS for clubbing the similar

factors which are resulting similar responses.


40/51

Data Collection

Through Simple Random Sampling, randomly data of approx

150 prospects were taken and asked to respond through e-mailsand by visiting them personally, with the help of Likert scale

Questionnaire. Final size of respondents is 100.

# Annexure 1: Questionnaire

LimitationThe problem revolves around HNIs only it does not revel

any connection with any other class of society and it also

focus on individual which may or may not be the clients

in future this only tells about the psychology of HNIs

before investment, it also tells about their perception

towards the Wealth Management Industry.


41/51

Analysis of the research

Through exploratory research we Ive found that only 15 factors

are responsible behind the investment idea of HNIs and those

factors are:

Organizing your wealth

Disposable income Improved savings

Future goals

Liabilities

Risk

Consistent return

Horizon

Market capitalization

Market trend of investors

Capital growth

Liquidity

Regular income

Tax saving

Sector specific growth


42/51

# Note: In the research analysis the factors are denoted by their

respective numbers like:

1Organizing your wealth

Correlation Matrix

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1 1.000 -.012 -.064 .230 -.002 -.135 -.032 -.002 -.022 -.040 .093 .138 -.035 .177 -.051

2 -.012 1.000 -.102 .024 .066 -.085 -.090 .139 .037 -.011 .019 -.014 -.077 .030 .114

3 -.064 -.102 1.000 -.002 -.072 .035 -.013 -.137 -.154 -.116 .118 .030 -.111 .026 -.152

4 .230 .024 -.002 1.000 -.038 -.061 -.139 -.092 .032 .011 -.034 -.025 -.083 .010 -.172

5 -.002 .066 -.072 -.038 1.000 -.235 .305 .126 -.037 -.009 -.066 -.004 .156 -.035 -.083

6 -.135 -.085 .035 -.061 -.235 1.000 -.129 .007 .033 .029 .002 .057 .014 .097 .081

7 -.032 -.090 -.013 -.139 .305 -.129 1.000 .181 -.102 -.215 -.124 -.022 .079 .180 -.042

8 -.002 .139 -.137 -.092 .126 .007 .181 1.000 -.107 -.158 -.244 .114 .122 .063 -.071

9 -.022 .037 -.154 .032 -.037 .033 -.102 -.107 1.000 .148 .031 .109 -.019 -.063 -.022

10 -.040 -.011 -.116 .011 -.009 .029 -.215 -.158 .148 1.000 .059 .173 -.055 -.067 .039

11 .093 .019 .118 -.034 -.066 .002 -.124 -.244 .031 .059 1.000 .112 .164 .031 .113

12 .138 -.014 .030 -.025 -.004 .057 -.022 .114 .109 .173 .112 1.000 .132 -.055 .008

13

-.035 -.077 -.111 -.083 .156 .014 .079 .122 -.019 -.055 .164 .132 1.000 .021 -.033

14 .177 .030 .026 .010 -.035 .097 .180 .063 -.063 -.067 .031 -.055 .021 1.000 .142

15-.051

.114

-.152

-.172

-.083

.081

-.042

-.071

-.022

.039

.113

.008

-.033

.142

1.000


43/51

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .473

Bartlett's Test of

Sphericity

Approx. Chi-Square 107.504

Df 105

Sig. .414

Communalities

Initial Extraction

Organizing your wealth 1.000 .696

Disposable income 1.000 .768

Improved savings 1.000 .645

Future goals 1.000 .576

liabilities 1.000 .604

risk 1.000 .651

Consistent return 1.000 .638

horizon 1.000 .753

Market capitalization 1.000 .440

Market trend of investors 1.000 .465

Capital growth 1.000 .726

liquidity 1.000 .631

Regular income 1.000 .514

Tax saving 1.000 .680

Sector specific growth 1.000 .660

Extraction Method: Principal Component Analysis.


44/51

Total Variance Explained

Component

Initial Eigen values

Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 1.811 12.070 12.070 1.811 12.070 12.070

2 1.425 9.503 21.573 1.425 9.503 21.573

3 1.406 9.376 30.949 1.406 9.376 30.949

4 1.327 8.848 39.797 1.327 8.848 39.797

5 1.289 8.596 48.393 1.289 8.596 48.393

6 1.162 7.750 56.143 1.162 7.750 56.143

7 1.024 6.828 62.971 1.024 6.828 62.971

8 .953 6.352 69.323

9 .882 5.878 75.201

10 .824 5.490 80.692

11 .695 4.635 85.326

12 .635 4.234 89.560

13 .585 3.901 93.461

14 .534 3.560 97.021

15 .447 2.979 100.000

Extraction Method: Principal Component Analysis.

7Component extracted


45/51

Component Matrix

Component

1 2 3 4 5 6 7

Organizing your wealth -.023 -.165 .526 .518 .320 .128 -.068

Disposable income .053 .240 .143 -.165 .501 -.234 .596

Improved savings -.108 -.540 -.242 .225 -.359 -.022 .322

Future goals -.182 -.397 .558 .041 .206 .171 -.035

Liabilities .561 .184 .310 -.029 -.217 -.323 -.080

Risk -.291 .108 -.511 .043 .045 .533 -.073

Consistent return .697 -.011 -.097 .149 -.090 -.081 -.325

Horizon .570 .241 .008 -.086 .169 .479 .323

Market capitalization -.311 .347 .268 -.198 -.026 .069 -.326

Market trend of

investors-.447 .371 .223 -.147 -.106 -.030 -.209

Capital growth -.362 .144 -.015 .586 -.193 -.391 .201

Liquidity -.127 .423 .241 .333 -.240 .396 .230

Regular income .240 .416 .015 .372 -.372 .070 .041

Tax saving

.166

-.057

-.200

.521

.489

.083

-.302

Sector specific growth -.151 .394 -.391 .148 .441 -.330 -.058

Extraction Method: Principal Component

Analysis.

7 components extracted


46/51

Result

1 2 3 4 5 6 7

Liabilities Market

Capitalizatio

n

Organizin

g your

wealth

Capital

Growt

h

Tax

saving

Ris

k

Disposabl

e income

Consisten

t return

Market trend

of investors

Future

goals

Sector

specifi

c

growt

h

Improved

Savings

Horizon Liquidity

Regular

income

The research tool Factor Analysis shows that the above factors

are clubbed in their similar respective categories. This result says

that liability, consistent return and horizon give parallel

behavior of the HNIs, similarly Market capitalization, market

trend of investors, liquidity and regular income falls under one

roof.

This will help RMs in better interaction with clients and less

wastage of time with better persuasive tactics.


47/51

ANNEXURE: 1

Age of Respondent: [ ] Date:Gender: [ ]

I prefer investment because it organises my Wealth:

Strongly Disagree

Disagree

Neither agree nor disagree

Agree

Strongly Agree

The degree of my investments depend on my disposableincome:

Strongly Disagree

Disagree


Agree

Strongly Agree

The motto behind my investments is to increase my savings

over my expenditure:

Strongly Disagree

Disagree


Agree

Strongly Agree


48/51

I seek investments for fulfilment of the future financial goalsthat I currently have and those that Ill make in my lifetime:

Strongly Disagree

Disagree


Agree

Strongly Agree

I have a priority towards my liabilities and would compromisemy investments over them:

Strongly Disagree

Disagree


Agree

Strongly Agree

I will look forward to invest in high-risk assets:

Strongly Disagree Disagree


Agree

Strongly Agree


49/51

In order to secure my financial needs I want to generateconsistent returns from my investment:

Strongly Disagree

Disagree


Agree

Strongly Agree

My plan is to make and generate returns from investmentsover a long horizon:

Strongly Disagree

Disagree


Agree

Strongly Agree

While making investments in equity I will prefer stock oflarge Market Capitalization companies:

Strongly Disagree

Disagree


Agree

Strongly Agree

My investment decisions are largely influenced by markettrend i.e. investment route taken by other Investors:


50/51

Strongly Disagree

Disagree


Agree

Strongly Agree

Capital Growth is the primary motive for me to makeinvestments:

Strongly Disagree

Disagree


Agree

Strongly Agree

For me Investment is a mode of generating liquid assets that

are capable to meet any financial needs as and when required:

Strongly Disagree

Disagree


Agree

Strongly Agree

Motive behind my investments is regular income:

Strongly Disagree

Disagree


Agree


51/51

Strongly Agree

I prefer investments to get Tax Shield over my income:

Strongly Disagree

Disagree


Agree

Strongly Agree

Sector Specific Growth is a bait to my investments:

Strongly Disagree

Disagree


Agree

Strongly Agree

Documents

Mudit Project Abmm