Sip Project Report Wms

Hedge Equities Pvt Ltd

Kirloskar Institute of Advanced Management Studies 0

PROJECT REPORT

Project report submitted in partial fulfillment of the requirements for the post graduate

diploma in management.

ANOJ BABY

Roll no – PG 2013-015

Under the Guidance of:

Mr. Vinay Sasidharan

(Assistant Vice President WMS)

Mr. Benil Dani Alexander

Assistant - Vice President

[Hedge School of Applied Economics]

FSG - Prof. Chetan G.K.

KIAMS, Harihar

KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMET STUDIES

PGDM 2013-2015



“Industrial Study on Hedge Equities WMS & Dynamic

Asset Allocation strategies With Respect to Retail

Investors”

Submitted by

Anoj Baby

WMS Intern



ACKNOWLEDGEMENT

It was my privilege to get the SIP in Hedge Equities where I get to learn the key aspects of the

company’s Wealth Management Services. I would like to thank all my mentors, without whom

my SIP would not have been a great success.

Mr. Vinay Sasidharan and Mr. Benil Dani Alexander for invaluable assistance, support and

guidance. Their passion and commitment towards work constantly inspired us towards fulfilling

the objectives of the project and to get this project in the current position. We are grateful to them

for dedicating their precious time and extending all help possible from time to time to explain the

nuances of the Wealth Management Industry.

I would like to thank Mr. Suraj R for his support and assistance. With their help we were able to

overcome the challenges and obstacles faced during the course of the project.

I would also like to thank the illustrious management of Hedge Equities for providing us this

exciting opportunity to work on this challenging project.

I would also like to thank my FSG - Prof. Chetan G.K. KIAMS, Harihar for invaluable assistance

in 2 months of my internship





TABLE OF CONTENTS

Page no

1. EXECUTIVE SUMMARY …………………………….. 5

2. OBJECTIVE OF THE PROJECT ……………………………. 6

3. INTRODUCTION ON WEALTH MANAGEMENT …………………. 7

4. WHY WEALTH MANAGEMENT IS IMPORTANT ……………. 8

5. PROCESS OF WEALTH MANAGEMENT SERVICE ……………….. 9

6. UNDERSTANDING PROFILE OF CLIENT …………………………... 11

7. PORTFOLIO ADVISORY SERVICES…………………………... 14

8. OVERVIEW OF TAXATION ON INVESTMENT PRODUCTS…….. 21

9. WORLD WMS INDUSTRY OVERVIEW …………………….. 23

10. NEW RULES AND REGULATORY CHALLENGES…………… 26

11. INDIAN WMS INDUSTRY OVERVIEW …………………………. 36

12. INIVIDUAL WEALTH: INDIA VERSUS WORLD ……………… 43

13. FUTURE OF INDIA’s INIVIDUAL WEALTH ………………… 44

14. COMPETITOR INFORMATION 45

15. DYNAMIC ASSET ALLOCATION STRATAGIES WITH RESPECT TO

RETAILINVESTOR 54

16. FINDINGS OF THE PROJECT 58

17. CONCLUSION 59

18. RECOMMENDATION 60

19. LIMITATION OF THE PROJECT 61

20. ACRONYMS 61

21. BLIBIOGRAPHY 62



EXECUTIVE SUMMARY

“Hedge Equities” was established in 2008, under the leadership of Mr. Alex. K. Babu. He

is the Founder, Chairman, and Managing Director of the Hedge Group of Companies. Hedge

Equities is one of the leading financial services company in India. The firm offers wide range of

financial services and wealth management solutions to various individuals, institutions,

corporations. The firm have spanned their presence all over India through meticulous research,

high brand awareness, intellectual management and extensive industry knowledge. The philosophy

of the company was entirely focused on providing long term value addition to clients. The firm

maintains high ethical standards and professionalism in providing sustainable financial services

platform for its customers.

My Project is “Industrial Study on Hedge Equities WMS & Dynamic Asset

Allocation strategies With Respect to Retail Investors”

Since the financial crisis began in 2008, stock markets have enjoyed a considerable bull run, GDP

growth is again robust in many markets, and assets under management are on the upswing around

the globe. the prospects for wealth management have improved significantly over the last 12

months, but new global regulations (including the battle against undeclared offshore assets),

changing client behavior, the rapid advance of digitization, and a fluid competitive landscape have

permanently altered the rules of the game and raised the cost of doing business. Wealth managers

must learn the new rules quickly and adapt their playbook accordingly if they are to capitalize on

the continued economic recovery in 2014 and 2015

Asset allocation can be an active process to varying degrees or strictly passive in nature. Whether

an investor chooses a precise asset allocation strategy or a combination of different strategies

depends on that investor's goals, age, market expectations and risk tolerance



OBJECTIVE OF THE PROJECT

The main objective of This Project is to understand the role of a wealth manager and how

to manage the wealth in dynamic economic environment

To understand the process of wealth management

To Understand Current performance of Hedge WMS

Determine the Growth prospective of this industry

Comparison World and Indian wealth management services

Determination of risk profile of an investor

Determination of asset allocation strategies

Comparison between competitor



INTRODUCTION ON WEALTH MANAGEMENT

Wealth management as an investment-advisory discipline incorporates financial planning,

investment portfolio management and a number of aggregated financial services. High-net-worth

individuals (HNWIs), small-business owners and families who desire the assistance of a

credentialed financial advisory specialist call upon wealth managers to coordinate retail banking,

estate planning, legal resources, tax professionals and investment management

Many of them had different opinions about the term “Wealth Management”. Some consider it as

selecting the products while some confuse it with “Portfolio Management”.

In order to understand the definition of Wealth Management one has to know about the meaning of

wealth. Wealth is nothing but accumulation of resources. As per the definition “Wealth

Management” defined as service to optimise, protect and manage the financial goals of individual,

household or corporate.

Wealth management is selecting and investing in various asset classes and ensuring that client can

gain better returns for the risk taken by him. Wealth manager mainly focuses on requirements of

client rather than money manager who specialises in specific asset class or asset manager who

specialises in maintaining portfolio. Wealth manager always works on helping the clients to achieve

their financial goals through effective management of their wealth.

In wealth management the process of asset allocation is considered as prime importance. According

to various studies returns are mainly varied due to selection of right assets but not due to timing of

market or skills of wealth manager.



Why is wealth management important?

Wealth creation is a pursuit followed by everyone. However, successful management of wealth is

not everybody’s forte. It calls for a lot of planning, discretion and commitment. No matter you

earn money the hard way, win a lottery or inherit some wealth, without a well-planned strategy in

place, wealth can get depleted before you realize it. A better quality of life and financial security

are the major factors driving one’s efforts for wealth creation and management. However, in the

endeavor of these, people often overlook that in the absence of proper management of assets, all

wealth is potentially at stake of getting diminished. In order to facilitate the growth of wealth, it is

best to trust private wealth management companies for their expertise. They have a rich experience

of the financial market and can advise best on investment concerns.

Wealth management experts suggest that investment in Private Equity firms is a good option to

grow wealth as it offers attractive Return on Investment (ROI).



PROCESS OF WEALTH MANAGEMENT SERVICE

Firstly, if any client wants to open an account in WMS it’s mandatory to maintain a Demat account.

To open a Demat account one needs to furnish following documents:

PAN Card

Proof of Address

Bank Proof

Copy of ITR Acknowledgement

In case of salary income – Salary slip, copy of Form 16 etc.

Once the Demat account is opened then fund manager can invest on behalf of client basing on

his requirement criteria. Hedge WMS supports only investors who are systematic and logic oriented

in their decisions.

A fund manager will be allocated to each and every client. He helps to choose the schemes that

best suit the requirements of client. Fund manager also can advise client on following options

according to variable market conditions.

Redemptions

Switch of Units

Awareness about new products etc.,

In Hedge WMS, a fund manager will be meeting the client in person at least once in three months.

Every month they update the client about the status of his portfolio either through call or meeting him

in person.

Portfolios are constructed, managed, and rebalanced as needed under the expert supervision of the

Fund Manager backed by a strong research team. Portfolios are regularly monitored and new

information is continuously assimilated into the investment decision making process. This provides

rebalancing the portfolio as and when needed.

Hedge research team provides customized and research oriented investment solutions that aids fund

managers in decision making. Needs identification and portfolios selection based on customer risk-

reward profile ensures that the investments are made considering customer risk appetite and long term

financial needs.

Investors in Hedge WMS can monitor their investments through a dedicated website. Monthly reports

are emailed to customers detailing account performance. Investors can also get reports of performance

and research notes in their respective portfolios



Some benefits of investing in Private Equity firms:

High ROI- Private Equity investors choose opportunities where they can invest into

something of value at reduced costs, nurture it and wait for it to appreciate so that it can be

sold for a profit. PE investors are prepared to wait for this scenario most of the times. They

are usually willing to invest more money into the company if required, in the hope of

maximizing the ROI.

Great scope- Private equity firms offer a great scope as compared to the public markets.

Be it a small manufacturing company or the largest division of a multi-national giant, any

organization can be a private equity investment opportunity. Private Equity firms also

attract public companies that are looking on to go private.

Transparency and Accountability- Private Equity firm investors can hold the company

accountable for their performance deliverables and target milestones. They can even

bargain a chair on the board and exert a lot more authority than a public company

stakeholder. Moreover, Private Equity firms grant direct access to investors if they want to

get in touch with the top officials of the company; which is in quite contrast to a public

sector company.



UNDERSTANDING PROFILE OF CLIENT

Knowing the client is an important aspect to provide Wealth Management Service. One

needs to assess following details in constructing the portfolio of an extremely interested customer.

Details need to know are:

A. Investor attitude: Basing on his attitude they can be classified into 3 fields as

Conservative – Investors who seek some modest potential increase in the value

of their investments and are willing and able to accept some limited volatility in

the capital investments.

Moderate – Investors whose primary investment objective is to seek moderate

returns over investment time horizon. A moderate investor is equally concerned

about the risk – return trade off and is willing to accept limited volatility for the

capital invested.

Aggressive – Investors whose primary investment objective is to appreciate their

returns on the capital they invested. An aggressive investor is ready to accept

relatively higher degree of risk. High level of risk tolerance makes them to

choose more equity stocks than fixed income and cash.

Client Data

Investor Attitude

Need of Investment

Investor Horizon

Investor Type

Expecting Rate of return

Investment Size

Regulatory Provisions

Choice of Securities

Disposable Income

Net Worth

Tax Constraints



B. Type of Investor:

Investor can be an institutional or an individual investor.

C. Need for Investment: Fund manager need to know the need of client for investing the money. It can be of

various types like for retirement, for children education, for children marriage etc.

D. Expecting Rate of return: As a part of choosing the securities for his profile we need to know the level of return

he is expecting.

E. Investment Horizon:

It can be either short or long which differs due to change in the need of investment.

F. Investment Size: Total amount how much client is interested in investing. If he is a regular investor then

we can suggest him to go with SIP mutual funds also.

G. Regulatory Provisions: Few investors might be interested in investing in foreign securities also. So, we need

to clearly know the regulatory constraints w.r.t. his geography.

H. Choice of securities: Securities are of various types like

Equity

Mutual Funds

Debt Instruments

Commodities

Currencies

Options

Futures

Fixed Maturity Plan’s

Non – Convertible Debentures etc.

So, basing on his interest and risk profile we can choose the securities among the above.



I. Disposable Income: From disposable income we would be able to know what is the amount that the client

can invests in various schemes as savings.

J. Net Worth: Fund manager can maintain the portfolio in appropriate manner only by knowing the

net salary of individual.

K. Tax Constraints: Investors might be looking to invest the money for the benefit of tax. So, fund manager

as well as investor should be aware of tax benefit schemes and tax constraints imposed by

government.

Apart from the above mentioned list fund manager should also be aware of

Constraint set of investors

Liquidity Risk:

This risk mainly explains about the marketability of an asset (ease of

asset to be converted into cash (vice versa))

Market Risk

Mandatory cash level for certain asset classes



Portfolio advisory services of Hedge Equities

Portfolio Advisory Services is a value-added service offered to our esteemed clients who seek to

a high-quality wealth management advisory desk and research team but are comfortable making

their own investment decisions.

As a Portfolio Advisory Services client, you have

A dedicated Wealth Advisory Desk standing ready to answer your queries and unique

needs

Assessment of your risk profile and help with constructing / rebalancing an investment

portfolio that matches your risk appetite.

Access to high quality research and investment strategies

The guidance can be on-going or as needed at client discretion

Under these services, our Wealth Management Service desk can only suggest investment ideas

that match the assessed risk-reward profile agreed for the investor. The choice as well as the

execution of the investment decisions rest solely with the Investor.

Minimum account balance for availing Portfolio Advisory Services is Rs. Twenty Five

Lakhs

Customer needs to sign a Portfolio Advisory Services agreement and get his Risk Profile

assessed

We do not charge any fees to provide this service



Portfolio Management Services

Portfolio Management Service (PMS) is a product offering that caters to the investment needs and

objectives of a certain investor class.

It is ideally suited for investors who,

Lack sufficient time to adequately monitor and manage a portfolio

Lack sufficient interest and knowledge of financial marketplace to obtain the desired

results

Desire Customized and Research oriented investment solutions

Desire investment decisions that minimize emotion and manage risk

Desire returns that are in sync with their risk profile (ability to take risk)

Our portfolios are designed and offered solely based on identifying the risk profile of the customer

and investment in these portfolios are tailored to the risk-reward profile that is established for the

same. The portfolios invests in equities, debt instruments, gold ETF’s, and other structured

products and is managed by competent portfolio managers. The securities are held in an investor’s

own depository account and as such can be monitored and viewed by the investor. Regular

performance reports and research notes are also provided to the investors in the respective

portfolios.

Benefits of PMS

Competent Management Portfolios are constructed, managed, and rebalanced as needed under the expert

supervision of the Portfolio Manager backed by a strong research team.

Ongoing Monitoring Portfolios are monitored daily and new information is continuously assimilated into the

investment decision making process. This facilitates rebalancing the portfolio as and

when needed.

Best of Breed Research Our research team provides customized and research oriented investment solutions that

aids portfolio managers in decision making.

Tailored to meet your profile Needs identification and portfolios selection based on your risk-reward profile ensures

that the investments are made considering your risk appetite and long term financial

needs.

Transparency Investors in PMS can monitor their investments through a dedicated website. Monthly

reports are emailed to customers detailing account performance



Conservative Portfolio

Investment Philosophy

Hedge Conservative Portfolio is designed for investors who seek some modest potential increase

in the value of their investments and are willing and able to accept some limited volatility in the

capital investments. As such this portfolio is designed as a long term defensive portfolio designed

to provide a real return after inflation and taxes in line with an investor’s conservative risk profile,

while providing the most protective cover possible. The portfolio implements detailed fundamental

analysis and long term technical indicators to ensure that investor’s funds are invested in reliable

and competent manner in securities which have a history of providing stable and secure returns.

In keeping with this philosophy, we have designed this portfolio on some basic principles which

are summarized below,

Stock Selection is made through detailed fundamental analysis of the securities.

Investments are made in equities, debt instruments, gold ETF’s, and other instruments.

Opportunity cost on idle cash is managed through efficient management and exposure on

mutual funds and other debt instruments.

Investments are made with a view to buy and hold, but to take advantage of short term

gains a moderate churn ratio will be maintained.

Investment Process

Evaluation and analysis of,

Company Financials

Valuation

Financial Ratios

Cash Flow Generation

Net Profit Margins

Debt to Equity Ratio

Sector analysis and future prospects using both fundamentals and technical indicators.

Portfolio Construction

This portfolio assigns a slightly higher weightage to equity instruments but still maintains

a conservative bias.

Investments are spread across Equities, Debt, Gold ETF’s, and other Liquid Investments

with the purpose of generating a real return after inflation & taxes.



Who can invest

Resident Indians

Non Resident Indians

Corporate Institutions

Minimum Investment: Rs Twenty Five Lakhs.

Mode of Corpus: Introduced by way of Cash only

Our PMS Service offers various features such as:

24 x 7 Online Access

Performance Reports accessible via our secure website

Transaction & Holding Statements

Trial Balance & Other Financial Reports

Moderate Portfolio


Hedge Moderate Portfolio is intended for the investors whose primary investment objective is to

seek moderate returns over investment time horizon. A moderate investor is equally concerned

about the risk – return trade off and is willing to accept limited volatility for the capital invested.

This Portfolio is called moderate as it is designed to adapt to various situations, perfectly molding

itself into the best shape for the current market situation. As with our other portfolios, this one too

has its set of principles which are used in its design and construction:

Stock selection based on extensive fundamental and technical analysis. Both sectorial and individual stock performance is taken into consideration. Portfolio would generally consist of equities and debt instruments with some exposure to

gold ETF’s; however derivatives would be used to hedge the portfolio against losses. Opportunity cost on idle cash would be minimized through efficient management and

exposure to mutual funds and other debt instruments. To take advantage of short term gains in the market, a moderate churn ratio would be

maintained.



Investment Process

In-depth evaluation of fundamental factors and detailed technical indicators are used to pick

diversified and versatile stocks.

A detailed historical analysis is undertaken to ensure the pedigree of the company and to model future growth prospects for the company.

A comprehensive financial analysis is undertaken which includes analysis of: Company Financials Valuation Financial Ratios Cash Flow Generation Net Profit Margins Debt to Equity Ratio Sector analysis and future prospects using both fundamentals and technical indicators


This portfolio may hold 40% – 60% directly in equities with the rest held in debt instruments, gold, or other liquid investments.

The portfolio’s top 10 holdings may carry 50% of the total investment weight-age The Portfolio’s will be rebalanced continuously on the basis of market situation

Aggressive Portfolio


The primary objective of this portfolio is to seek considerable accumulation of wealth over the

investment time horizon. The investors who are willing to accept fair amount of volatility in the

capital and fully understand the emotional and monetary impacts these could have on the value of

the investment are the right prospect for Hedge Aggressive Portfolio.

Hedge Aggressive Portfolio endeavors to deliver superior performance of investment over a long

period through extensive technical research and fundamental backing. The portfolio constitutes

equities, which have a historical track record of outperformance compared to other investment

avenues like bank deposits, bonds, real estate, gold, commodities, etc. We believe that investing

in a properly managed business through equity shares can deliver returns of around 20-30% per

annum in the long term, compared to returns of between 10% – 18% for other modes of investment.



In keeping with this philosophy, we have designed this portfolio, on some basic principles which

are summarized below.

To invest in stocks which have fundamentally sound business and a good technical track

record

Investing in companies which have excellent growth prospects and are consequently

cheaper in terms of valuation.

Ensuring maximum returns while at the same time minimizing risk; portfolios generally

consist of equity protected and hedged using derivatives.

Minimizing opportunity cost incurred by idle cash through efficient cash management.

Investment Strategy

The portfolio weightage will constitute 60-70% in equities which are diverse in nature. The stocks

are invested in different weightages and allotted on the basis of market movement and potential

future movements. For example, equities which have high beta will be included when retracement

of the index is imminent and vice versa. We realize that some short term gains may be lost if the

portfolio is held with a long term objective only and thus a moderate churn ratio of investment is

implemented to capture short term gains. In order to maintain such a churn ratio a percentage

amount of cash is kept. This cash and derivatives also serve the purpose of tactically hedging the

portfolio against any losses.

Investment Process

Our investment process follows our investment philosophy closely; we first evaluate the

fundamental factors of the particular stock, then identify the technical trend exhibited and finally

we make sure that the company has a diversified product mix which make it a stable and long term

growth prospect. We also initiate an in-depth analysis which include,

Company Financials

Valuation

Financial Ratios

Cash Flow Generation

Net Profit Margins

Debt to Equity Ratio

Sector analysis and future prospects using both fundamentals and technical indicators


We believe that a portfolio of 10-15 stock with 60%-70% weight age in equity will

adequately create a perfect diversification.

The portfolio’s top 10 holdings carries 50% of the total investment weight-age,

Any shifts in investment and weights are done based on market movements and any

opportunity cost on non-deployed cash will be nullified through mutual fund and debt fund

exposure.



Mutual Fund Advisory Services

Hedge Wealth Management Services can help you choose the mutual fund schemes that best suit

your requirements. We can also advise you on redemptions, switch of units, etc according to

variable market conditions, etc.

Purchase and redemption of mutual funds are now made easier through our online mutual fund

purchase terminals and the mutual fund units can be held in your demat account. This allows for a

faster purchase & settlement process and facilitates online viewing of your mutual fund holdings.

Investors can choose to invest either a lump-sum investment or through a Systematic Investment

Plan (SIP) in Mutual Funds. Our exclusive research team will help you to make the right choice.

http://hedgewms.com/wp-content/uploads/2010/11/Ourmutualfundselectionprocess.jpg



OVERVIEW OF TAXATION ON INVESTMENT PRODUCTS

Key tax planning strategies used by Hedge Equities are:

Capital Gains reduction/ deferment strategies

Tax efficient investment strategies

o Selections of right funds in case of mutual funds

o Products which offer indexation benefits

Strategies to reduce liability across heads of income

Strategies to set off/ carry forward losses

The income gained through these asset classes are called as capital gains and are taxed

differently. Investor needs to be aware of tax implications on these assets to ensure better returns

from their investment. The key tax rates as per the latest financial year were mentioned below.

These capital gains are mainly classified as

I. Long-Term Capital Gains:

Capital gain is considered to be long term when an investor holds certain

asset class for definite period. Minimum years of investment vary from 1 year to 3

years across different asset classes. Applicable tax rate for various asset classes is

as shown below.

Type of Investment Min. years of investment Taxation

Equity 1 year NIL

Debt Instruments 1 year (Whichever is beneficial among

these)

10% without Indexation

20% with indexation benefit

Gold 3 years (physical gold, e-

gold)

1 year (Gold ETF, Gold

MF)


(Whichever is beneficial among

these)

10% without Indexation


Real Estate 3 years 20% with indexation benefit

Bonds/NCDs 1 year 10% without indexation



II. Short-Term Capital Gains:

Capital gain is considered as short term when an investor holds asset class

for very short period. These taxed as short term capital gains. Only the asset class

equity charges 15% tax rate whereas others are included in investor income and

taxed according to tax slab rate. Following table shows various asset classes in

detail.

Type of Investment Min. years of investment Taxation

Equity Less than 1 year 15%

Debt Instruments Less than 1 year Added to Income

Gold Below 3 years (physical

gold, e-gold)

Below 1 year (Gold ETF,

Gold MF)

Added to Income

Added to Income

Real Estate Below 3 years Added to Income

Bonds/NCDs Less than 1 year Added to Income

Indexation Benefit:

In order to reduce the effect of inflation indexation benefit is provided on long term capital

gain. Returns on investment are adjusted to the inflation using cost of inflation.



World WMS Industry Overview

Since the financial crisis began in 2008, stock markets have enjoyed a considerable bull run, GDP

growth is again robust in many markets, and assets under management are on the upswing around the

globe. But these gains have not translated into the amount of top- and bottom line growth that wealth

managers would expect based on past recoveries the prospects for wealth management have improved

significantly over the last 12 months, but new global regulations (including the battle against undeclared

offshore assets), changing client behavior, the rapid advance of digitization, and a fluid competitive

landscape have permanently altered the rules of the game and raised the cost of doing business. Wealth

managers must learn the new rules quickly and adapt their playbook accordingly if they are to capitalize

on the continued economic recovery in 2014 and 2015Wealth management is back and firms are winning

clients and assets at an accelerating rate. Wealth management is arguably now one of the fastest growing

segments of the financial services industry with global wealth expected to grow 61% to USD 313 trillion

by 2015.1 A recent study conducted by the Deloitte Center for Financial Services found that the total

wealth of millionaire households may grow from $92 trillion in 2010 to $202 trillion in 2020 (based on

a review of 25 economies).



An industry still in transition

After surviving a tumultuous period of plummeting asset prices, spiraling revenue, and the near

collapse of some of the world’s leading wealth management firms during the 2008 financial crisis,

the global wealth management industry is winning back some lost ground. But it is still struggling

on several fronts. According to a global wealth management study conducted by Strategy&,

consisting of quantitative market analysis and complemented by in depth interviews with more

than 150 wealth management executives, senior financial advisors, and regulators, assets under

management (AUM) are growing worldwide. In North America, after four years of steady growth,

these assets have recently passed their pre-crisis levels. In China, Latin America, and other

emerging markets, they have grown far beyond their mid-2000s levels. Only Europe is lagging

and, even there, assets under management have increased significantly since the nadir of

2008 .Nonetheless, market participants report that earnings are still under pressure and they don’t

expect the industry to return to a pre-crisis way of doing business. The rules for wealth

management have changed structurally — driven by increasing global regulations, the move from

undeclared to declared offshore assets, changing client behavior, the advance of digitization, and

a fluid competitive landscape

Wealth management: What it is, how it’s changing, what is required



AUM make steady gains

Many of the world’s wealth managers enjoyed solid AuM growth in 2012 for a number of reasons:

strong GDP performance in emerging economies, rebounding equity markets worldwide, net investor

inflows, and the fact that the number of high-net-worth individuals — those with more than US$1

million of investable assets — continued to grow two to three times faster than GDP in most markets.

However, performance by region varied significantly. In 2012, the Middle East was once again the

standout region for wealth creation, posting its third consecutive year of impressive gains— 19 percent

in 2012 after growth of 15 percent in both 2010 and 2011.The large Middle East wealth management

centers (such as Dubai)experienced particularly robust AuM growth, fueled by inflows from Syria and

politically unstable countries in North Africa, as well as the increasing number of HNWI households in

more stable countries in the Middle East and North Africa (MENA) region. The year 2012 also saw

AuM growth accelerate in other regions. Asia’s growth rate jumped to 20 percent, up from 2 percent in

2011, thanks to strong economic growth and increasing wealth concentration. This made Asia the

“hottest” region for wealth managers. Meanwhile, North America and Latin America both posted

healthy 12 percent AuM gains, up from 1 percent and 5 percent, respectively. In North America, AuM

have now passed their precrisis level. Latin America was the only region to notch positive AuM growth

every year from 2007 to 2012. The region’s largest market, Brazil, enjoyed political and macroeconomic

stability as well as relatively high interest rates, encouraging investors to keep more assets onshore. At

the same time, a flurry of initial public offerings by family-owned businesses, higher private-equity

activity, and the economic rise of various industries (such as agribusiness) contributed to wealth

creation. The one exception to full AuM recovery is Europe, which despite 7 percent growth in 2012

has not returned to its precrisis levels. A number of factors weighed on Europe’s performance. Besides

weak GDP growth, which was the primary culprit, other factors included the euro debt crisis, the

transition from undeclared to declared money (which significantly reduced assets held offshore), and

the growing confidence of wealthy citizens of emerging economies to manage their assets themselves.



Growth of assets under management worldwide, 2007–12, by region

New rules and regulatory challenges

The financial industry faces an unprecedented degree of regulation, covering a wide range of issues:

capital, liquidity, proprietary trading, derivatives, corporate governance, and the transparency of

offshore assets and income. These costly, complex rules have become a major —if not the most

important — factor affecting the strategy of wealth managers. This is true globally, although European

firms have arguably experienced the most pain; regulations on the continent have driven overall cost

increases by 5 to 10 percent since the financial crisis. If there is any good news on the regulatory front,

it’s that new global rules are finally taking clear shape, ending years of uncertainty about how to

prepare. Also, in an ironic twist, these regulations will likely raise the industry’s barriers to entry,

which may ultimately help wealth managers preserve their margins. We see the major regulatory

challenges for wealth managers falling into two main categories: taxation and transparency, and client

protection and suitability.

Client behavior

Besides the myriad regulatory issues reshaping the global wealth management landscape, the industry

must also placate clients whose daily experiences on sites such as Google and Amazon, and on devices

such as smartphones and tablets, are influencing their expectations for wealth management. Clients

want plentiful, transparent information at their fingertips, as well as the freedom to conduct research

and make decisions wherever and whenever it’s convenient. That might be at home on the couch after

the kids are put to bed, or on the train commuting to and from work. As more and more high-net-worth

individuals are motivated to use technology and emerging channels to manage their wealth, the

industry is moving toward a 24/7 multichannel, digital environment dictated by clients especially for



standard products and services. About half of wealth managers surveyed expect the number of self-

directed investors to increase, while only 6 percent expect it to decline.

Client protection and suitability

Besides creating taxation and transparency issues, new regulations are also changing traditional

distribution, compensation, and pricing models in the wealth management industry, altering well-

established ways of doing business. In the past, product manufacturers paid banks handsome

distribution remunerations (“retrocessions”). But recent legislative initiatives aimed at eliminating

conflicts of interest — such as MiFID II and the Retail Distribution Review — spell the end for these

business practices. The U.K. has banned retrocessions since the beginning of 2013, and stricter

regulations are expected soon in the European Union (E.U.) and Switzerland. Most of those surveyed

expect that these bans will lower product costs for clients and profits for banks — as has already

proven the case in the United Kingdom. Interviewees also expect that integrated players with their

own asset management capabilities will prove more profitable than pure distribution banks going

forward. On the issue of “suitability” — the matching of riskiness to client risk tolerance in financial

guidance — regulators have pushed national and international client protection initiatives such as

packaged retail investment products to improve client information, eliminate conflicts of interest, and

document client meetings. The current draft of MiFID II also contains suitability rules. For example,

a client relationship manager (CRM) must be certain that a client is sophisticated enough to

Understand the financial markets and a particular investment’s associated risks. If the client lacks

sufficient understanding, the CRM is at risk of being sued for “mis-selling.” Suitability rules like this

increase sales and marketing risks for wealth managers, along with their cost burdens.



Client behavior

Not surprisingly, younger HNWIs embrace the new technologies with gusto, and their digital approach

to wealth management has become much more sophisticated. Generation Y investors (those born since

the early 1980s, currently in their 20s and 30s), are not simply making trades online. They are joining

peer-to-peer networks and other virtual communities to benchmark their own results and make

investment



Decisions. Some platforms leverage social media by allowing participants to “follow” successful

portfolio managers and replicate their portfolios and trades. Clients still desire personal consultations

for more complex wealth management decisions, but they also expect these interactions to occur

whenever and wherever they want.

Enter new digital players

Three types of digital providers are targeting the wealth management

market: investment advisors that provide real-time customized advice including goal setting,

allocation, monitoring, and rebalancing; portfolio review providers that offer financial management

portals to track portfolio and advisor performance; and investment communities that offer a platform

to share and discuss investment ideas. But their long-term viability is uncertain. So far these digital

innovators have mainly managed to destroy the value pools of incumbent players by offering digital

services for free or at a much lower price point, rather than taking market share. Nevertheless, they

are forcing incumbents to make significant technology investments to keep pace. Over time, a more

serious threat to today’s wealth management firms will be established online brokers that decide to

complement their transactional expertise with wealth management services. For example, Charles

Schwab has made several acquisitions to expand its fee advisory offerings and is rolling out 80

branches in 2014. It has already enjoyed some success: Revenue from advisory services saw

compound annual growth of 30 percent from 2009 to 2012

Four response priorities

We believe wealth managers can keep pace with the industry’s changing dynamics and capitalize on

the recovery in 2014 and 2015 by concentrating on four priorities: focus on markets that offer superior

growth by applying a “capabilities lens,” rethink the value proposition; go digital; and adopt a Fit for

Growth approach.

1. Apply a capabilities lens

First, wealth managers need to define clearly which markets they intend to play in onshore and/or

offshore. As noted earlier, wealth managers are understandably drawn to markets that promise superior

underlying growth, but the expense and patience required to compete in some of these markets make

profits elusive. Going forward, wealth managers need to apply a capabilities lens to identify the

markets where they can most effectively compete and maintain long-term differentiation. Even

The biggest wealth managers can no longer be all things to all people. This inevitably requires some

difficult trade-offs in terms of markets to play in, client segments to target, and business models to

adopt. Managers need the discipline and rigor to stick to whatever capabilities strategy they choose

and execute diligently over time.



2 Rethink the value proposition

New regulations on suitability and compensation, as well as the demands of clients for tailored

solutions and digital access to financial information, are forcing banks to rethink how they bundle

products and services in tiered service offerings that appeal to different client segments and enable the

wealth manager to control the cost-to-serve

Appropriately for the different segments. These packages should include digital client communication

elements including “post-advisory services” such as notifying clients when a product drops off the

bank’s recommendation lists. The industry also needs new pricing models. Clients want to know

exactly what they are paying for, and regulators want clients to have the ability to compare prices

across the industry. Transparency is the name of the game. This will fundamentally change how wealth

management services get priced. Two-thirds of banks believe that pricing will shift from fee- and

transaction-based models toward “pay for advice” or flat-fee arrangements. In fact, some banks have

already introduced such pricing models, particularly in the U.K., where new client protection and

suitability laws are already in effect. Though the U.K. experience suggests that pay-for-advice pricing

will become more widespread, many wealth managers still doubt the HNWI’s willingness to pay for

advice. Self-directed clients in particular are highly price sensitive and shop for the lowest rates and

commissions. But even less self-directed, less price-sensitive investors increasingly demand

transparent pricing schemes, such as flat fees for basic packages, all-in fees for advanced packages,

and volume/transaction fees clearly linked to established thresholds. With retrocession payments

phasing out, banks may need to reduce their product partnerships for economic reasons and build or

buy their own menu of offerings to maintain an adequate diversity of investment options. On the flip

side, if product providers choose to vertically integrate by building or buying in-house retail

distribution capabilities, they could compete effectively against wealth managers, given their pricing

advantage. In a world of increased transparency around advice and investment performance, wealth

managers must perform more rigorous risk profiling of clients and take a more controlled and

centralized approach to investment management for both tactical and strategic asset allocations. This

could represent a major culture change for many wealth managers, but those that are making the

change are already reaping the benefits.

3 Go digital

The perceived imperative to digitize the business model varies by region to a surprising degree. In the

U.S., digitization is a top priority. Wire houses see digitization as a way to profile and segment clients

for target product and service offerings. Discount brokers see digitization as a way to provide “high

touch, low cost” services. Wealth managers use digitization to track client interactions for compliance

and audit purposes. And, overall, managers in the U.S. tend to be on the

Lookout for novel digital offerings they might mimic, acquire, or gain

Through partnership. In other parts of the world, digitization is a greater priority for large players than

small players. Some even argue that being non-digital is a differentiator and part of their value

proposition. Overall, Latin American wealth managers gave the lowest priority to digitization — 60

percent said it’s not relevant, and 20 percent more described digitization as a low priority. This despite



the fact that digitization is critical to fulfilling wealth managers’ stated priorities for 2014–15: to better

understand client needs, generate client-centric holistic advice, and deliver a superior client

experience. Demographics may influence digitization’s low priority among wealth managers in

general. New technologies appeal strongly to clients in their 20s, 30s, and 40s, but some HNWI clients

are 65 years of age or older and may still prefer low-tech, high-touch interactions with an advisor.

There are five pillars to a digital agenda: Build a 360-degree view of clients’ assets and behavioral

profiles to provide high-quality, competitive, and personalized advice. Provide high-speed, always-on

access to portfolio, research, and advice through mobile technologies, such as advisor–client chat,

videoconferencing, and interactive applications (financial planning and portfolio simulations, for

example). Enhance the quality and personalization of advice using “big data” analytics to identify the

most relevant opportunities for each client. Streamline and automate back-office operations to

eliminate time consuming manual activities. Establish a social media presence to evaluate client

sentiment (through mining text on blogs and forums), to communicate with existing clients (for

example, by enabling advisors to connect with LinkedIn groups and Twitter followers), and to

strengthen the financial advisors’ community (using internal blogs and enterprise social networks, for

instance).



4 Adopt a Fit for Growth approach

Wealth managers have worked hard over the past two years to lower their cost bases, but the effort

has not been enough to overcome the escalating cost of doing business. In response, wealth managers

need a strategic, ongoing approach to fixing their cost base and positioning themselves for growth.

Taking a Fit for Growth approach starts by articulating a clear and compelling cost agenda from the

front line to the back office; continues with building lean and resilient processes, systems, operations,

and organization structures; and culminates in the institutionalization of capabilities that keep

resources flowing to “good” costs and away from “bad” costs. Growth markets need an approach to

cost management very different from one appropriate for mature

Markets. For wealth managers, the process of cutting costs while growing stronger manifests itself in

several identifiable moves: Exit markets of nonstrategic importance where the company does not have

the capabilities to win, and make sure no stranded costs remain; set client profitability standards and,

when these standards are not met, fix, sell, or close the book; introduce tiered service offerings to align

cost-to serve

with client value; avoid duplicating activities across the organization (e.g., multiple house views),

which drives up costs, confuses clients, and creates compliance risks; build or buy only when

differentiation is possible — otherwise partner with low-cost specialists across the value chain; and

avoid damaging fat-tail events by adopting

Careful policies for managing reputational and operational risks and a zero tolerance for transgressions

An attractive industry

Despite the trials of the last few years and the challenges that lie ahead, wealth management is an

attractive growth industry for the long term with return on equity superior to that of any other financial-

services segment. As noted earlier, the number of HNWIs is growing two to three times faster than

GDP growth in many regions of the world; that, plus the continued strong economic activity in the

worlds most robust

Emerging markets, bodes well for the industry. Yet this positive outlook does not make the industry’s

transition any easier to manage today. Given the regulatory load, changing client behavior, and new

competitors enabled by digitization, the costs of doing business have never been higher and earnings

are under intense pressure. However, we believe that by focusing on the priorities set forth in this

paper — apply a capabilities lens, rethink the value proposition, go digital, and apply a Fit for Growth

approach — wealth managers can navigate the industry’s transformation and capitalize on the

continuing global recovery in 2014 and 2015



LEVERAGING PRIVATE WEALTH

MANAGEMENT

Liberalization of economy has led to mushrooming of private banking systems in India. Private

wealth management companies are helping people manage their wealth. Investors are getting

attracted to private equity firms, which are now a lucrative option for a good ROI.

Leveraging private wealth management

Private banking has been a part of the Indian economy ever since banking system started in India.

After the liberalization of the Indian Banking Industry by the Reserve Bank of India, private

banking systems in India gained a lot of momentum. Senior private bankers began setting up

private wealth management firms to provide wealth management services. People began seeking

their services to plan their wealth management strategy.

http://www.globalbankingandfinance.com/wp-content/uploads/2013/11/index_bestpractices.jpg



Pivot, tweak or pounce: Strategic challenges in wealth management

The private banking sector used to have a reputation as being rather cozy as well as lucrative. No

longer. Multiple developments in the last few years have driven major change. Clients and

providers alike now have dramatically different constraints and expectations. The opportunity

remains to develop sound, profitable business. But clear strategic decisions are needed.

Private banking and wealth management have always been attractive business sectors. Wealthy

individuals not only have more money, but they also require specialist investment management

support, income protection and tax advice for which they are willing to pay a significant price. The

numbers of such individuals are growing, despite the financial crisis, both in developed markets

and particularly in high-growth emerging markets, such as Asia and Latin America. From the

bank’s perspective, wealth management carries low credit risk and, as a result, requires lower

regulatory capital. A high proportion of revenue comes from recurring fees. With low overheads

and limited need for an extensive branch network, this adds up to traditionally profitable business.

Change and challenges

But the wealth management business is changing and will change further in the wake of the crisis

and as regulatory changes begin to bite. One significant challenge is that margins are coming under

increasing pressure. While assets under management have recovered since the financial crisis in

2008, increases in adviser remuneration and other expenses have resulted in a higher cost-to

income ratio. This trend is being exacerbated by current market conditions, as investors prefer

capital preservation products, which generate low fees for the wealth managers.

Investors are also becoming much more demanding of their relationships with wealth managers.

In a world where returns are low, assets have suffered losses and trust has been damaged, clients

are far less willing to take the performance of wealth managers for granted. They want more

vigorous action to generate returns; they want strong frameworks for risk management and wealth

protection; and they want transparency and justification over fees and charges. They are

increasingly wary of bespoke products and in-house funds; they are looking for portability and

low-cost asset classes such as exchange-traded funds. The internet offers them the ability to

compare the performance and costs of service providers in an instant.

On the policy and regulatory front, profound changes in attitudes to financial services are still

working their way through. The industry is under greater scrutiny and greater pressure to reform

itself than ever before. Traditional banking privacy is rapidly being destroyed as banking secrecy

in offshore centers and in traditional private banking locations such as Luxembourg and

Switzerland is being blown away by a combination of regulatory and fiscal authorities. The

Foreign Account Tax Compliance Act (FATCA) will require effectively full disclosure of all

accounts held by US nationals anywhere in the world. Tax authorities are increasingly extracting

account information from domestic institutions and passing it over to counterparties in other

jurisdictions. Specific regulatory initiatives, such as the Alternative Investment Fund Managers

Directive (AIFMD) and the Markets in Financial Instruments Directive (MiFID) II in Europe as



well as the complex set of new regulations emerging under the Dodd-Frank Wall Street Reform

and Consumer Protection Act in the US are all having serious ripple effects throughout private

banking.

These pressures all increase operating costs and require extensive and expensive investment in

information technology, systems and processes. The demands of compliance, reporting, more

active client account management and other factors can no longer be satisfied with traditional

back-office systems and low-technology customer relationship channels.

The industry is under greater scrutiny and greater pressure to reform itself than ever before.

Traditional banking privacy is rapidly being destroyed as banking secrecy in offshore centers and

in traditional private banking locations such as Luxembourg and Switzerland is being blown away

by a combination of regulatory and fiscal authorities.

Strategic options

Wealth management firms that want to survive these increasing pressures and succeed in the new

environment have a number of options available. The least radical, but most challenging to

accomplish, would be to sustain the existing business model attempt to drive it back to acceptable

profitability. This is what we term the ‘tweak’ strategy. It involves rationalizing unprofitable

clients and increasing revenue per client by cross-selling a broader range of services and products.

On the operations side, it means ruthlessly streamlining processes and driving up efficiency across

the whole front-to-back office chain. It will be especially challenging to reconcile the costs of

necessary investment with improving profitability and to satisfy increasing client demands while

streamlining and automating the relationship.

A second approach is to look much more strategically at the future business and regulatory

environment and at the longer-term requirements for success in order to reconfigure the business

accordingly. We refer to this as a ‘pivot’ strategy. This may involve disposing of unprofitable

businesses or client books; developing and focusing on particular niche products or market sectors

where high value can be added; and perhaps changing the geographical target of operations to

focus more closely on areas such as Asia, which have the most rapid growth in high-net-worth

(HNW) individuals.

Finally, churn in the marketplace is likely to increase and open up other opportunities. More

stringent regulatory capital requirements may force multinational parents of private banks to

dispose of assets in the course of optimizing their balance sheets, especially in the case of smaller

companies where the fixed cost of implementing new regulations becomes too burdensome. On

the other hand, the sector is still significantly fragmented. Industry estimates suggest that the 20

largest wealth managers, who have a little over US$11 trillion of assets under management, only

account for around 10 percent of the total private wealth available to be targeted.1 The current

turmoil is likely to stimulate consolidation of the industry. Those who are determined to expand

their presence, especially in developing markets, should find significant opportunities to do so, but

need to be prepared to act – to pounce – when necessary.



Potential

Significant potential remains, despite the pressures facing the industry. The Boston Consulting

Group estimates that over the 5-year period ending 2016, private wealth will reach US$151.2

trillion, with an overall compound annual growth rate (CAGR) of 4.2 percent.2 Within this total,

growth in HNW and ultra-high-net-worth (UHNW) households is expected to be more rapid, at 6

percent and 7.5 percent, respectively. These investors are relatively more resilient than average

retail investors. They have deeper pockets and access to timely and sophisticated advice, which

also helps them ride out market cyclicality better. They remain an attractive prospect.

The big opportunities will increasingly be found in Latin America and in Asia. The Julius Baer

Group, which currently derives one-third of its assets under management from developing markets

such as these, expects this proportion to grow to over 50 percent by 2015. HNW individual wealth

in Asia-Pacific region is forecast to grow at over 10 percent until 2016. More significantly, only

around 17 percent of Asia’s HNW individuals have wealth management relationships with their

banks. Thus, a large pool of HNW individuals remains untapped.

This is not to say that success will come easily. New regulatory requirements will mean stronger

processes for risk management, customer protection and capital management. Business models

will have to remain flexible and responsive to rapid changes in the global distribution of wealth.

The days of easy profits in private banking may be over, and rightly so, but significant

opportunities remain for those who are prepared to grasp them.

INDIAN WMS Industry Overview

As with any almost any element of the financial markets in India, wealth management is at an early

stage of development. Only about 1% of the population owns equities to articulate the opportunity

in the Indian wealth management market the country has more billionaires than Japan. The Indian

economy is the tenth largest in the world in terms of nominal GDP and ranks as the third largest in

terms of GDP based on Purchasing Power Parity (PPP), behind only United States of America and

China. With the economy performing well after the global economic downturn of 2008, recording a

GDP growth rate of 9.2% in FY11 and 6.2% in FY12, the GDP growth slumped to a 10 year low of

5% in FY13. FY13 was a year of challenges for the economy with a slowdown experienced in

agriculture, manufacturing as well as service sector. This coupled with rising current account deficit,

high inflation, weakening exports due to weak global demand and delayed policy action slowed

down the GDP growth rate. As a result, even Foreign Direct Investment inflows took a hit,

registering a 38%1 decline from FY12, making foreign investors wary about India. Growth is

expected to remain at 5% in FY14. Agricultural sector owing to normal monsoon and growth in



Exports is likely to give a boost to the economy. However growth in manufacturing and service

sectors are expected to remain subdued

The Indian Economy is growing at a robust rate. Indian Financial Services Industry gets a rub-off of

this growth, but also has some complexities to shoulder along the way. The challenges are a transition

from Commission based to Advisory based services as a result of “No load” regime in Mutual Fund

schemes. The investor today is not only looking for a financial product in isolation but in a holistic

manner for meeting his/her life goals and risk factors. Therefore, there is a crying need to enhance

and upgrade the skill set of the financial product advisor in order to protect and safeguard the interest

of the investor and develop a long term relationship with him.

The Wealth Management industry in India is a prime example of the success of free competition in

the country. Wealth Management is one of the fastest growing disciplines of the banking sector and

with a GDP growth rate hovering around the 9% mark and a strong future outlook, India’s growth

story is making it an increasingly attractive market for wealth management firms. This trend is

expected to continue, with India estimated to become the third largest global economy by 2030.

Given the nascent stage of the market and a demographic and regulatory environment that is

significantly different from elsewhere in the world, Wealth Management Business Houses consider

the following to succeed in the Indian market:

Building of brand and focus on overcoming the trust barrier.

Invest in advisor technology to improve advisor productivity and retention.

Evaluate a partnership-based model, coupled with innovative use of technology, to increase reach.

Focus on transparency and compliance, while targeting customers with attractive, segment

focused products.

Current Primary Focus of Wealth Management Business Houses

Qualified advisors will be the best brand ambassadors for new firms seeking to gain a competitive

edge against established players.

Investor education programs could deliver information pertaining to various asset classes and the

associated risks, fee structures and benefits of each.

Establishing trust is a vital component for any successful brand-building exercise in India.

Strategies Opted by Wealth Management Business Houses

Invest in brand building to build trust.

Invest in advisor technology to improve productivity and advisor retention.

Offer a 360-degree view.

Shifting to a profit-sharing model (where the advisor’s fees are based on the overall performance

of the portfolio) would help mitigate issues to some extent.



Immediate Issues before Wealth Management Business Houses

Difficulty in putting a value to your service & advice.

Building the right business model.

Maintaining brokerage structure may be difficult and cumbersome and bulky.

Technology – Online platforms with direct investments.

Immediate cash-flow concerns.

Need for Qualified Advisors!

The Current Indian Financial Advisory Market is looking for Brand building through its

“Qualified Advisors” as Brand Ambassadors.

Qualified Advisors shall develop trust with the clients on a better footings.

Qualified advisors will be the best brand ambassadors for new firms seeking to gain a

competitive edge against established players.

Advisor platforms that offer lead management, portfolio management, financial profiling,

asset allocation and transaction management capabilities can integrate multiple touch points

and improve advisor experience.

IFA’s require a qualification to equip themselves with the required skill set and knowledge to call

themselves as Qualified Advisors

Individual Wealth in India

The amount of individual wealth in India is arrived by a summation of all asset classes in which

investments are made by individuals. It does not consider government and institutional holdings. In

this report, Financial assets and Physical assets, where investments are made by individuals of India

are considered. Also International investments made by these individuals in financial and physical

assets have been considered. As on FY13, Indian Individual wealth in financial assets stands at

`109.86 lakh crore whereas Indian Individual wealth in Physical

assets (Gold & Real Estate Investments) stands at ̀ 92.06 lakh crore. Hence the total Individual Wealth

in India stands at `201.90 lakh crore. Due to the stupendous growth and development in financial

markets in the last two decades since liberalisation, Indians now have 54.4% of their wealth invested

in financial assets.

Asset Class Amount (` Cr) Proportion (%)





Investments in fixed deposits & bonds form the largest component of the total individual wealth in

financial assets with 23% of Indian Individual financial wealth being held in this asset class. Direct

Equity comes a close second attracting 22.1% of total individual wealth in financial assets. Assets

held in Fixed Deposits have been increasing over the past couple of years as banks are now offering

high interest rates in the range of 8-12%. Indian Equity market saw the Nifty giving a return of 9.39%

as compared to a -8% in FY12. Growth in equity markets was also largely driven by higher inflows

from foreign institutional investors (FIIs).



Key Trends

Overall wealth held by individuals in India is expected to double to `411 lakh crore in the next 5

years. However the ratio of financial assets to Physical assets in total wealth (55:45) are expected to

broadly remain the same.

The Wealth held in Real Estate (excluding Primary Residence of the Individual) is expected to double

in the next 3 years.

In the coming years with improvement in the economy and the percentage of households owning

primary homes set to increase to greater than 90%, the fresh inflow into physical assets will increase

at a decreasing rate.

With expected upturn in the economy there will be a gradual shift of more financial savings being

invested in equities.

Even with a higher minimum investment size, alternative investments such as high yield debt, private

equity, real estate funds and hedge funds will remain popular among the HNIs.

With the expansion of workforce and pension benefits being limited for the newer generation from

employers/government, retirement/pension funds are expected to grow at a rapid pace in the next

decade.



Individual Wealth: India versus World

In this age of global integration, trends in Indian asset allocation should ideally be similar to trends

of asset allocation globally, Table 20 shows the proportion of investments in key asset classes by

individuals in India and globally

As is evident that investment in debt instruments is highest among asset classes

Both globally and in India. Investments in Alternative assets form a larger portion in India as

compared to that done globally primarily because of investments in Gold, where Indian individuals

preference to invest in Gold is still higher as compared to other nations. Investing in Equity in India

is still very low as compared to globally, however we foresee this to gradually increase in the future.



Future of India’s Individual Wealth The global economy is still going through an upheaval and there are uncertainties ahead. The global

economic recession and crisis has, quite expectedly, impacted India, too. It is well known that - on a

purchasing power parity basis – India is already, at over USD four trillion of GDP, the third largest

economy in the world. In the next 15 to 18 years this size is expected to grow, as per various studies

and estimates, four to five times. As a result many foreign investors and a majority

of global companies and businesses are making a beeline for the Indian market, which promises a

booming middle class, expanding steadily in the next few decades. India’s GDP for FY13 is `100

lakh crore and is expected to grow to `176 lakh crore by FY18. Individual wealth in financial assets

is expected to grow from the current `109.86 lakh crore to `228.36 lakh crore by FY18. Investment

in Physical assets is expected to increase from the current `92.06 lakh croreto `183.15 lakh crore by

FY18.

Hence the total wealth is expected to more than double from the current `201.92 lakh crore to `411.51

lakh crore



Competitor Information (Kerala circle)

1. Geojit BNP Paribas

Geojit BNP Paribas, today, is a leading retail financial services company in India with a growing

presence in the Middle East. The gamut of value-added products and services offered ranges from

equities and derivatives to Mutual Funds, Life & General Insurance and third party Fixed Deposits.

In 2007, global banking major BNP Paribas joined the company The needs of over 672800 clients

are met via multichannel services - a countrywide network of over 522 offices, phone service,

dedicated Customer Care Centre and the Internet

2. Acumen Capital Market India Pvt Ltd

Acumen Capital Market (India) Limited provides stock broking services. The company was

formerly known as Peninsular Capital Market Ltd. before it changed its name in May, 2008. The

company was incorporated in 1995 and is based in Kochi, India. Acumen Capital Market (India)

Limited operates as a subsidiary of Acumen Group. Acumen has emerged as a leading financial

services provider, having a network of 40,000 customers, spread over 12 states across the country,

served by over 375 associates

3. Doha Brokerage & Financial Services Ltd

Doha Brokerage & Financial Services Ltd, the flagship company of the DBFS group had its origin

in 1992 as one the first corporate brokerages in India and one of the leading financial service

companies in the country. Select group, as it was known then had a very humble beginning with

branches in select locations in Kerala. The group has a network of over 280 branches spread across

India and offices in Middle East. DBFS has trading licenses in BSE and NSE for cash and

derivative segment. We have memberships in premier commodity exchanges like MCX, NMCE

and NCDEX

4. Sharewealth Securities Ltd

Sharewealth Securities Ltd is the first corporate member of National Stock Exchange of India Ltd,

Bombay Stock Exchange Ltd and MCX Stock Exchange Ltd(MCX-SX) from THRISSUR, the

Cultural Capital of Kerala. Sharewealth is also a Depository Participant with CDSL (Central

Depository Services (India) Ltd).

Sharewealth Securities Ltd has two group companies, Sharewealth Commodities Pvt Ltd

http://www.justdial.com/Ernakulam/acumen-capital-market-india-pvt-ltd-%3Cnear%3E-Veekshanam-Road/0484PX484-X484-090708170810-N2A3

http://www.fundoodata.com/companies-detail/Sharewealth-Securities-Ltd/54927.html



(Member: MCX, NCDEX, NMCE ,ICEX & NSEL) and Sharewealth Financial Services Ltd

(AMFI Registered Mutual Fund Distributor). Sharewealth has a group (Overseas Joint Venture)

company at Abu Dhabi, Sharewealth Financial Consultancy LLC.

Registered & Corporate offices of Sharewealth Group of companies are at Thrissur.

Top Wealth Management Companies in India

1. ICICI Asset Management Company

ICICI group is the third largest fund based asset management company in India. This financial

company was founded in 1954 and currently K V Kamath is the chairman of the firm.

Market Capitalization: Total revenue of the ICICI financial services is around Rs 2000

crore to Rs 4000 crore. The profit of the company is around Rs 80 Crore to 90 Crore and

growing at the rate of 25% every year.

Business and Services: Core Banking, Financing, Asset Management.

Employees: 8000 to 15000.

Headquarters: The bank is based in Mumbai with offices and operations all over the

country.

Website: www.icicibank.com

2. HDFC Asset Management Company

HDFC Asset Management Company was formed in the year 1990 HDFC has over 318 outlets

including 77 offices across India and it covers over 90 locations.

Market Capitalization: market value of the HDFC is around $3.5 billion, for asset

management services profit is around Rs 400 Crore approx.

Business and Services: Banking, Wealth Management Services, Loans, Financial Security

Services.

Employees: 1700 to 2000 for various operations.

Headquarters: Corporate Office is in Mumbai and Deepak Parekh is the chairman.

Website: www.hdfc.com

3. Reliance Asset Management Company

Reliance Capital was founded in year 1986 and currently Anil Ambani is the chairman.

http://topcompaniesindia.com/finance-companies-in-india/

http://topcompaniesindia.com/finance-companies-in-india/



Market Capitalization: Total revenue is over $1 billion and average asset managed by

44 fund houses is Rs 6,60,000+ Crore

Business and Services: Asset management, Mutual funds, Life and general insurance,

Private equity and proprietary investments, Stock broking, Reliance PMS, Depository

services and financial products, Consumer finance and other activities in financial

services.

Employees: 12,500+

Headquarters: The company is based in Mumbai and Sundeep Sikka is the CEO of the

firm

Website: www.reliancecapital.co.in

4. UTI Asset Management Company

UTI asset Management Company was established in the year 2003 and incorporated on the date

Nov 14 2002.

Market Capitalization: Asset managed until this date is around Rs 74233.29 Crore

Business and Services: Mutual Funds, Wealth Management services

Employees: 3000 to 4000, company has a network of 149 UTI financial Centers and UTI

international offices in London, Dubai and Singapore

Headquarters: Headquarter of UTI is in Mumbai and Mr Leo Puri is CEO and Managing

Director

Website: www.utimf.com

5. Birla Sun Life Asset Management Company

The company is joint venture between Aditya Birla Group and Sun Life Financials.

Market Capitalization: Total revenue of the firm is around Rs 1000 crore to Rs 2000

crore.

Business and Services: capital market, corporate finance, wealth management services,

commercial real estate and mortgage and structured finance.

Employees: 10,000 to 15000 for various sectors.

Headquarters: Corporate office is in Mumbai.

Website: www.adityabirlafinance.com

6. Kotak Mahindra Asset Management

Kotak Mahindra has over 7 million loyal customers. It stated its operation in the year 1998

http://topcompaniesindia.com/mutual-fund-companies-in-india/

http://topcompaniesindia.com/top-10-life-insurance-companies-in-india/



Market Capitalization: The Net worth of the company is over Rs 7911 Crore

Business and Services: Asset management services and various bonds & funds

Employees: 20,000+

Headquarters: Headquarter is in Mumbai and the Company has over 76 branches in 79

cities

Website: www.kotakmutual.com

7. Religare Asset Management Company

Religare Mutual fund is the sole product developed and marketed by Religare asset management

company. The company was registered in National Stock Exchange in the Year 1994. The firm

has over 1 million customers around the world.

Market Capitalization: Total revenue is around Rs 120 crore and average asset is Rs 126

Billion

Business and Services: brokerage, health & life insurance, asset management, Small and

medium enterprises (SME) lending, wealth management, institutional equities and

investment banking services.

Employees: 8000 to 10000 across the country.

Headquarters: headquarter of the company is in New Delhi with 2200 offices in 550 cities

around the world.

Website: www.religareinvesco.com

8. Reliance Mutual Fund

Reliance Mutual fund is subsidiary of Reliance group. Reliance Mutual fund has over 6 million to

7 million investors

Market Capitalization: Total assets worth Rs 86,327 Crores

Business and Services: Mutual Funds and Asset Management services

Employees: 10,000 to 15,000

Headquarters: Corporate office is in Mumbai with presence in over 179 cities

Website: www.reliancemutual.com

http://topcompaniesindia.com/health-insurance-companies-in-india/



9. Tata AMC

Tata Group wealth or asset management company is subsidiary of Tata Group, it was established

in the year 1995. It fully enjoys the support of Tata Group. There are around 5 to 10 lakhs investors

that Tata AMC caters to.

Market Capitalization: Total Assets worth around Rs 20,000 Crore to Rs 22,000 Crore

until now

Business and Services: Fund Management, Asset Management, Mutual Funds etc

Employees: 8000 to 10,000

Headquarters: Mumbai, Maharashtra

Website: www.tatamutualfund.com

The World’s Largest Wealth Manager by Client Assets (June 11 -2014)

Rank YoY Firm AuM

2013 change ($bln)

1 +2 UBS AG 2,055

2 -1 Bank of America Corp. 2,002

3 -1 Morgan Stanley 1,909

4 -- Wells Fargo & Co. 1,618

5 -- Credit Suisse Group AG 887

6 -- Royal Bank of Canada 660

7 +2 Raymond James Financial Inc. 454

8 +2 BNP Paribas SA 383

9 -2 HSBC Holdings Plc 382

10 -2 Deutsche Bank AG 380



Top Brokerage Companies in India

1. Sharekhan Limited

ShareKhan is an online trading company of SSKI group. It has presence in over 170 cities of the

country and India’s most trusted brokerage firms.

Head Office: Mumbai, India

Number of Terminals: 2000 to 2500

Number of Sub Brokers: 200 to 300

Number of Branches: 510 offices

Number of Employees: 1000 to 2000

Account Opening Fee: Rs 750/- for Classic Account and Rs 1000/- for Trade Tiger

Website: www.sharekhan.com

2. India Bulls

India bulls was founded by Sameer Gehlaut in the year 2000. India bull has a net worth of Rs

17,000 crore.

Head Office: Gurgaon, Haryana



Number of Branches: 414 to 450


Account Opening Fee: Rs 1200/- (Rs 250/- for equity + Rs 200/- for Demat + Rs 750/-

for software )

Website: www.indiabulls.com



3. Angel Broking Limited

Angel is counted among top 3 broking firms in India. It was founded in the year 1987 and it offers

various services like ebroking, commodity trading and other wealth management services.






Account Opening Fee: Stock Trading Account + Demat Account = Rs 500/-, Commodity

Trading = Rs 625/-

Website: www.angelbroking.com

4. Reliance Money

Reliance money is India’s number one broking firm. It has over 3.5 million customers with more

than 6000 outlets around the country.

Head Office: Lower Parel, Mumbai





Account Opening Fee: Trading + Demat = Rs 750/- and for foreign nationals it is Rs

1000/-

Website: www.reliancemoney.com

5. India Infoline Limited

India Infoline was started in year 1996 and has over 2 million customers.

Head Office: Andheri, Mumbai







Account Opening Fee: Trading + Demat = Rs 750/-

Website: www.indiainfoline.com

6. Kotak Securities Limited

Kotak Securities was incorporated in 1994 and it is subsidiary of Kotak Mahindra.

Head Office: Nariman Point, Mumbai





Account Opening Fee: Derivative brokerage Rs 150 per contract and delivery brokerage

is .45%

Website: www.kotaksecurities.com

7. ICICI Direct

ICICI Direct is a stock trading company of ICICI bank.

Head Office: Mumbai, Maharashtra





Account Opening Fee: Rs 750/- for share trading account, wise investment, active trader

account

Website: www.ICICIdirect.com

8. Motilal Oswal Securities

Motilal Oswal securities Ltd was founded in 1987 and considered to be best local brokerage firm.

Head Office: Mumbai, Maharashtra







Account Opening Fee: Rs 600/- with first year Amc and from next year only Rs 400/-

Website: www.motilaloswal.com

9. HDFC Securities

HDFC securities was established 10 years back. It has over a million customers.






Account Opening Fee: Minimum Brokerage per order Rs 25/- for resident and NRI.

Subject to ceiling of 2.5% of total traded value

Website: www.hdfcsec.com

10. Bajaj Capital

Bajaj Capital started its website justtrade.in in the year 2008.






Account Opening Fee: Onetime payment of Rs 499/- and trading account with 1st year

AMC and from next year it is Rs 180/- and Rs 1499/- for DEMAT

Website: www.justtrade.in

11. Aditya Birla Money

There are seven companies representing Aditya Birla Money are Birla Sun Life Insurance

Company, Birla Sun Life Asset Management Company, Aditya Birla Money, Birla Sun Life

Distribution Company, Aditya Birla Finance, Birla Insurance Advisory and Broking Services








Account Opening Fee: Account charges are around Rs 750/- for online cum offline

trading and Demat A/C

Website: www.adityabirlamoney.com

12. SMC Global Securities Limited

SMC Global Securities is present all over the country. It has over 6 million satisfied investors and

over 3.5 million trades per day.

Head Office: New Delhi, India





Account Opening Fee: Demat + Trading One Time Charge = 499/-

Website: www.smcindiaonline.com

13. Geojit BNP Paribas

Geojit BNP Praibas has over 7 million clients with 522 offices around the country and in Middle

East also.

Head Office: Kochi, Kerala





Account Opening Fee: For deliver based trading: .10% to .30%, for intra-day trading:

.01% to .03% and F &O trading brokerage is Rs 30 to Rs 75 per lot.

Website: www.geojitbnpparibas.com



Dynamic Asset Allocation strategies With Respect to

Retail Investors

Who is Retail Investor?

A retail investor is an individual who purchases securities for his or her own personal account

rather than for an organization. Retail investors typically trade in much smaller amounts than

institutional investors. Retail investing generally occurs through four channels: individual

investors, retail brokers (who act at the direction of these individuals), managed accounts (whereby

the account manager makes the buy and sell decisions for the individual), and investment clubs

(groups of people who pool their money to make investment)

What is Asset Allocation?

An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets

according to an individual's goals, risk tolerance and investment horizon.

The three main asset classes - equities, fixed-income, and cash and equivalents - have different

levels of risk and return, so each will behave differently over time.

6 Asset Allocation Strategies That Work

Establishing an appropriate asset mix is a dynamic process, and it plays a key role in determining

your portfolio's overall risk and return. As such, your portfolio's asset mix should reflect your goals

at any point in time. Here we outline some different strategies of establishing asset allocations and

examine their basic management approaches

1. Strategic Asset Allocation

This method establishes and adheres to a "base policy mix" - a proportional combination of assets

based on expected rates of return for. each asset class For example, if stocks have historically

returned 10% per year and bonds have returned 5% per year, a mix of 50% stocks and 50% bonds

would be expected to return 7.5% per year.

2. Constant-Weighting Asset Allocation

Strategic asset allocation generally implies a buy-and-hold strategy, even as the shift in values of

ssets causes a drift from the initially established policy mix. For this reason, you may choose to

adopt a constant-weighting approach to asset allocation. With this approach, you continually



rebalance your portfolio. For example, if one asset is declining in value, you would purchase more of

that asset; and if that asset value is increasing, you would sell it. There are no hard-and-fast rules for

timing portfolio rebalancing under strategic or constant-weighting asset allocation. However, a

common rule of thumb is that the portfolio should be rebalanced to its original mix when any given

asset class moves more than 5% from its original value.

3. Tactical Asset Allocation

Over the long run, a strategic asset allocation strategy may seem relatively rigid. Therefore, you may

find it necessary to occasionally engage in short-term, tactical deviations from the mix to capitalize

on unusual or exceptional investment opportunities. This flexibility adds a market timing component

to the portfolio, allowing you to participate in economic conditions more favorable for one asset

class than for others.

Tactical asset allocation can be described as a moderately active strategy, since the overall strategic

asset mix is returned to when desired short-term profits are achieved. This strategy demands some

discipline, as you must first be able to recognize when short-term opportunities have run their

course, and then rebalance the portfolio to the long-term asset position.

4. Dynamic Asset Allocation

Another active asset allocation strategy is dynamic asset allocation, with which you constantly adjust

the mix of assets as markets rise and fall, and as the economy strengthens and weakens. With this

strategy you sell assets that are declining and purchase assets that are increasing, making dynamic

asset allocation the polar opposite of a constant-weighting strategy. For example, if the stock market

is showing weakness, you sell stocks in anticipation of further decreases; and if the market is strong,

you purchase stocks in anticipation of continued market gains.

5. Insured Asset Allocation

With an insured asset allocation strategy, you establish a base portfolio value under which the portfolio

should not be allowed to drop. As long as the portfolio achieves a return above its base, you exercise

active management to try to increase the portfolio value as much as possible. If, however, the portfolio

should ever drop to the base value, you invest in risk-free assets so that the base value becomes fixed.

At such time, you would consult with your advisor on re-allocating assets, perhaps even changing your

investment strategy entirely.

Insured asset allocation may be suitable for risk-averse investors who desire a certain level of active

portfolio management but appreciate the security of establishing a guaranteed floor below which the

portfolio is not allowed to decline. For example, an investor who wishes to establish a minimum



standard of living during retirement might find an insured asset allocation strategy ideally suited to his

or her management goals.

6. Integrated Asset Allocation

With integrated asset allocation, you consider both your economic expectations and your risk in

establishing an asset mix. While all of the above-mentioned strategies take into account expectations

for future market returns, not all of the strategies account for investment risk tolerance. Integrated

asset allocation, on the other hand, includes aspects of all strategies, accounting not only for

expectations but also actual changes in capital markets and your risk tolerance. Integrated asset

allocation is a broader asset allocation strategy, albeit allowing only either dynamic or constant-

weighting allocation. Obviously, an investor would not wish to implement two strategies that compete

with one another.

Dynamic Asset Allocation

All investment portfolios have an asset allocation; whether intentional or not. However, dogmatically

relying on any static long-term strategic asset allocation to ensure that investment objectives are

achieved can be detrimental, especially where investors have multi-faceted objectives across a

continuum of timeframes. Market dynamics are continually changing and short-term risks can

dominate news headlines and market volatility. Dynamic asset allocation continuously evaluates the

investment market landscape to deliver additional returns and abate portfolio risks; such as tail events.

Dynamic asset allocation (DAA) describes active portfolio management from a macro, or top down,

perspective. The process aims to generate additional returns, or abate portfolio risks, by reallocating

capital when capital markets deviate from ‘fair value’. DAA bridges the divide from strategic asset

allocation (SAA) which uses equilibrium assumptions to provide long-term policy weights by

introducing a more flexible framework to increase exposure to under-valued opportunities while

reducing exposure to overvalued assets.

How it works/Example:

Let’s assume you have $100,000 to invest. Based on your circumstances, risk aversion, goals and tax

situation, you put $50,000 of the money in stocks, $30,000 in bonds, $10,000 in real estate, and

$10,000 in cash. Thus, 50% of the portfolio is in stocks, 30% is in bonds, 10% is in real estate, and

10% is in cash. As time passes, the stocks in the portfolio might rise so much in value that the stock

weighting increases from 50% to 70% and consequently reduces the proportion of the other asset

classes in the portfolio.

In this situation, the investor might sell some of the stocks or purchase securities in other asset classes

in order to bring the portfolio back to the original weighting. If the investor reweights the portfolio

frequently, say every three months, then the investor is said to engage in market timing, tactical asset

allocation, or active investing. In both types of rebalancing approaches, the investor must consider

whether the effort and additional transaction costs will increase returns. However, if the investor



refrains from rebalancing the portfolio at all, effectively leaving the investments to do what they may,

the investor is practicing a true buy and hold strategy.

Why it Matters:

Many experts believe that what an investor buys or sells is more important than when he or she buys

or sells it. This is the essence of asset allocation. Because many asset classes tend to rise and fall

together, a portfolio’s overall return is much more affected by how the portfolio is allocated rather

than the specific securities chosen. A well-known 1986 study by Brinson, Hood and Bee bower

confirmed that 95% of the time, asset allocation determined a portfolio’s returns rather than the

specific securities chosen. A dynamic asset allocation strategy is a mix of active and passive investing.

On one hand the investor keeps a consistent, long-term asset allocation and does not alter that based

on short-term market swings or stock fads. On the other hand, the investor buys and sells securities in

his portfolio occasionally in order to keep the portfolio aligned with the original weightings. Dynamic

asset allocation is often cheaper than active trading. It can have tax benefits if the IRS taxes long-term

capital gains at a lower rate than short-term capital gains. Also, the strategy requires less in trading

commissions and advisory fees, which often force investors to have higher return requirements to

compensate for these extra costs.

There is no simple formula that can find the right Dynamic asset allocation for every Retail investors.

However, the consensus among most financial professionals is that asset allocation is one of the most

important decisions that investors make. In other words, your selection of individual securities is

secondary to the way you allocate your investment in stocks, bonds, and cash and equivalents, which

will be the principal determinants of your investment results.

Methodology Followed

The Project “Industrial Study on Hedge Equities WMS & Dynamic Asset Allocation strategies

With Respect to Retail Investors” forecasting two components wealth and Asset Allocation since

it is an industry analysis primary data analysis is not possible. Secondary data analysis is the most

suitable methodology for this particular project and for the asset allocation strategies questionnaire

can also be included but continues relationship with investor will more effective to determine the

risk profile of the investor



Findings of the Project

Wealth management is arguably now one of the fastest growing segments of the financial

services industry with global wealth expected to grow 61% to USD 313 trillion by 2015

The total wealth of millionaire households may grow from $92 trillion in 2010 to $202

trillion in 2020 (based on a review of 25 economies).

The Boston Consulting Group estimates that over the 5-year period ending 2016, private

wealth will reach US$151.2 trillion, with an overall compound annual growth rate (CAGR)

of 4.2 percent.2 Within this total, growth in HNW and ultra-high-net-worth (UHNW)

households is expected to be more rapid, at 6 percent and 7.5 percent,

India’s GDP for FY13 is `100 lakh crore and is expected to grow to `176 lakh crore by

FY18

Individual wealth in financial assets is expected to grow from the current ̀ 109.86 lakh crore

to `228.36 lakh crore by FY18

lakh crore in the next 5 years. However the ratio of financial assets to Physical assets in

total wealth (55:45) are expected to broadly remain the same.

The Wealth held in Real Estate (excluding Primary Residence of the Individual) is expected

to double in the next 3 years

With the expansion of workforce and pension benefits being limited for the newer

generation from employers/government, retirement/pension funds are expected to grow at

a rapid pace in the next decade.

only about 1% of the Indian population owns equities

In WMS nobody has a significant market share

International wealth managers are exiting India UBS and Morgan Stanley, which

announced their own Indian exits

There is no simple formula that can find the right Dynamic asset allocation for every Retail

investors it is based on the



Conclusion

Hedge Equities has over 20,000 satisfied customer and is awarded the best brand by the investor

community of Asianet channel. It offers a variety of products to the investor community. It was

able to achieve a good growth within a short period of time and is ready heading its head high like

the bull logo of the company.

Wealth Management department of Hedge has grown tremendously over a very short time and

now handles 500 crore. It is filled with enthusiastic people who have the zeal and enthusiasm to

work in the market. It is this team that is responsible for the success of the department

The Wealth Management industry in India is a prime example of the success of free competition

in the country. Wealth Management is one of the fastest growing disciplines of the banking sector

and with a GDP growth rate hovering around the 9% mark and a strong future outlook, India’s

growth story is making it an increasingly attractive market for wealth management firms. This

trend is expected to continue, with India estimated to become the third largest global economy by

2030

Asset allocation can be an active process to varying degrees or strictly passive in nature. Whether

an investor chooses a precise asset allocation strategy or a combination of different strategies

depends on that investor's goals, age, market expectations and risk tolerance

Be aware that allocation approaches that involve anticipating and reacting to market movements

require a great deal of expertise and talent in using particular tools for timing these movements.

Some would say that accurately timing the market is next to impossible, so make sure your strategy

isn't too vulnerable to unforeseeable errors.



RECOMMENDATION

Based on the above study, the following recommendations have been made

People of Kerala are unaware of many of the investment options they have. They still

follow old methods of investing. Awareness can be created by conducting workshops and

seminars. This will increase the turnover of the WMS department in the long run.

While drawing a financial plan to a customer, it would be better to follow observe his life

stage and a FBR kind of report needs to be obtained for better results.

I suggest clubbed profiling were in a two main members of the family are profiled

(Husband and wife mainly) and clubbed to make a single profile for them. This is needed

to cover the hidden risk tolerances and meeting forgotten expectations that may incur on

single customer man profiling.

Macro-economic report needs to be submitted by the research team to the Wealth managers

in crisp manner whenever there is a news regarding the same. It can be put in the bulletin

as well.

Debt instruments is found to be underutilised .It should be utilised more. Time value of

money calculations needs to be done on same.

Alternate assets like gold and real estate related investments should be looked upon.

Currently it forms a small percentage of the investments.

Hedge funds are not been considered till now. It can be looked by the WMS team if it can

meet all statutory requirements.

All the members in the WMS departments should look and attain qualifications in different

courses and certifications issued by NSE NCFM and NISM. This will keep them updated

about new techniques used in this wealth management sector.

From a marketing point of view, I have found that WMS department requires a good

advertising and penetration into the masses. Hedge being a popular name among people

should make their WMS department the best perceived name in wealth management and

this will help the company a lot in years to come as this sector will witness a boom as

explained in the industry analysis.



Limitation of the Project

As the project is an industrial analysis primary data collection is very difficult

Trust worthiness of secondary data is questionable

As the company provides daily works project have to do single handily with fixed time frame

As the stock market changes every seconds our guide is helpless to help in our project

As Hedge Equities is an financial company the confidential data is not available or they are

not ready to give

As I make this as a Research paper my lack of experience in the same acted as a big obstacle

Since the future uncertain making assumption regarding wealth of economies may go wrong

like 2008 crisis

ACRONYMS

WMS Wealth Management Services

GDP Gross Domestic Product

HNWIs High-net-worth individuals

ROI Return on Investment

PE Private Equity

SIP Systematic Investment Plan

PMS Portfolio Management Service

ETF Exchange-Traded Funds

AUM Assets under Management

PPP Purchasing Power Parity



Bibliography

www.hedgeequities.com

http://www.geojitbnpparibas.com

http://www.karvy.com

www.bcg.com/

www.pwc.com

www.sebi.gov.in

www.moneycontrol.com/

http://www.kpmg.com/in/en/pages/default.aspx

http://www.crisil.com

http://www.hedgeequities.com/

http://www.geojitbnpparibas.com/

http://www.karvy.com/

http://www.bcg.com/

http://www.pwc.com/

http://www.sebi.gov.in/

http://www.moneycontrol.com/

http://www.kpmg.com/in/en/pages/default.aspx

http://www.crisil.com/

Documents

Sip Project Report Wms