SUMMER INTERNSHIP

PROJECT
COMPARATVE STUDY OF VARIOUS
ALTERNATIVES AVAILABLE IN THE
MARKET FOR WEALTH
MANAGEMENT
(keeping the Bank of Baroda as the base
bank)
STUDY CONDUCTED AT
BANK OF BARODA,
LUCKNOW, CHOWK
BRANCH.

By –
VARUN MISHRA
M.B.A. (C.M.)
I.M.S. Lucknow University
 ACKNOWLEDGEMENT
It is a matter of great satisfaction and pleasure to present this report on
Comparative study of various alternatives available in the market for wealth
management, taking Bank of Baroda as the basis of my study. I take this
opportunity to thank all those involved in my summer training.

This project report could not have been completed without the help and guidance
of Mr Pradeep Srivastava, Chief Manager, Bank Of Baroda, Chowk Branch and
Mr. Biman Bihari Kar, Manager Operations, Bank Of Baroda, Chowk Branch. I
am thankful to them for their able guidance and encouragement at every step of my
6 week long summer training. I am also thankful to the staff members of Bank Of
Baroda, Chowk Branch for their support, guidance and cooperation.

And last but not the least, I would like to thank the teaching staff of IMS, LU, for
making me capable enough to undertake this project independently and for
broadening my horizons. I would like to extend my thanks to everyone who has
even remotely been associated with me, as the old adage goes we, may not learn
everything from someone but learn something from everyone.
 CONTENTS
INDEX
Sl. No. Particulars

1 Executive Summary
2 Objective & Scope of Project
3 Company Profile
4 Theoretical Background
5 Survey Findings And Results
6 Bibliography

** CONTENTS
1. INTRODUCTION
2. CONCEPT OF WEALTH MANAGEMENT
Wealth Management Range
Key Elements of Wealth Management Services
Key Challenge Area
3 Solution Framework
4. Wealth Management – An Emerging Sector
5. Core Elements of Wealth Management Services
Packaged at various levels
 Advisory
 Investment Processing (transaction oriented)
 Custody, Safekeeping and Asset Servicing
 End-to-end Investment Lifecycle Management
Key function areas
 Financial Planning
 Client Profiling
 Investment Objective
 Portfolio Strategy Definition / Asset Allocation
 Defining Portfolio Strategies and Portfolio Modeling
 Determination of Portfolio Constituents and Allocation of Assets
 Strategy Implementation
 Portfolio Management
 Portfolio Administration
 Performance Evaluation and Analytics
 Strategy Review and Alignment
 Recalibration of Portfolio Strategy
 Rebalancing, Reallocation and Divestment of Assets
6. Key Challenge Areas
Highly Personalized and Customized Services.
Personal relationship driving the business.
Evolving Client Profile.
Client Involvement Level.
Passion Investment (Philanthropy and Social Responsibility).
Limited Leveraging Capabilities of Technology (as an enabler).
Technical Architecture and Technology Investment.
Intricate Knowledge of Cross-functional Domain.
7. Solution Framework
Quality of Service Level
Universal Service Offering
Investment in People Processes
Price not a True Differentiator
Unconventional Delivery Channel and Communication
Flexibility of Technical Architecture
8. SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS
Custodian Services
Trust Services
Retirement Plan Services
9. ADVANTAGES AND LIMITATIONS
10. Consumer Point Of View :
Wealth Management
PMS vs Wealth manager and fund manager.
Is PMS for you?
How to choose a PMS.
Investment philosophy.
Scheme benchmarks.
Minimum investment.
Returns.
Cost structure.
Frequency of disclosure.
Broking house.
Assets under management (AUM).
11. CONCEPT OF ASSET CLASSES
Asset Mix

List Of Different Asset Class
 Fixed Deposits
 Merits and Demerits
 Interest rates on FDs
 Effective Return
 MUTUAL FUND
 Open-end fund
 Exchange-traded funds
 Equity funds
 Capitalization
 Bond funds
 Money market funds
 Funds of funds
 Hedge funds
 Equity investment
 Direct holdings and pooled funds
 Commodities Market
 ART FUND
 Diversified portfolio
 Tie-ups with galleries
 REAL ESTATE FUND
 Insurance Product
 General Insurance
 Unit Linked Insurance Plan (ULIP)
 Structured Product
 Composition
 Risks
 GOLD
 Factors influencing the gold price
 Gold becomes desirable in times of :

  Bank failures
  Low or negative real interest rates
  War, invasion, looting, crisis
 Currency
 Portfolio composition of currency
12. Companies providing Wealth management services

Kotak securities
 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

Morgan Stanley
 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

Moti Lal Oswal
 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

Religare Wealth Management

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

Standard chartered
 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 
Abn Amro Wealth Management
 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

HSBC Financial Planning Services
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

Citi Bank
 INTRODUCTION
 PRODUCTS
 ASSET SIZE
 ASSET CLASSES USED

ICICI Wealth Management

 INTRODUCTION
 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE

AXIS BANK & WEALTH MANAGEMENT

Procedure for entertaining a client in AXIS BANK

BANK OF BARODA WEALTH MANAGEMENT SERVICES

13. SURVEY ANALYSIS-

Survey results and findings
Coustmer Profiling
 Upto 30 years of age
 30-45 years of age
 45-60 years of age
 over 60 years

14. WEALTH MANAGEMENT : INDIAN CONCERN

Position of India in Wealth Management

EXECUTIVE SUMMARY
Bank of Baroda Wealth Management provides discretionary wealth
management service, in which wealth managers give recommendations to
customers and invest according to customer discretion.
Bank Of Baroda is one of the major banks of India offering wealth
management services. Their major competitors are-
Kotak securities
Morgan Stanley
Moti Lal Oswal
Religare Wealth Management
Standard chartered
Abn Amro Wealth Management
HSBC Financial Planning Services
Citi Bank
ICICI Wealth Management
BoB offers guidance and services to perspective investors and offers products
and services through which they can maximize their wealth. It offers services
suited to the needs of different class of customers, as have been discussed in
detail later in the report.
The study was conducted at the chowk branch, of Bank of Baroda, Lucknow.
The project was of 6 weeks duration. During the project I had taken the
guidance of bank managers & staff to collect the data, & also made use of
Company’s various reports. I also conducted a survey on the topic of
alternatives of wealth management and the level of customer awareness of
various facilities provided by the bank. The data thus collected was then
compiled, tabulated and analyzed.
Apart from objectives, Some of the points which were considered in this topic to
make project report more comprehensive were :-
1. What a customer expects from a wealth management service provider.
2. Solution framework for wealth management.
3. Key Challenge Areas.
4. Core Elements of Wealth Management Services.
I conducted a survey of the customers which revealed the tastes and preferences of
the customers regarding their investment portfolios and some well known
principles of wealth management came to light from the survey-
a. With advancement of age, people became more and more conservative and
risk averters. In this connection I would like to quote a well known formula:
(100-age)= amount of risk taken by a person or the amount of investment
done by him.
b. Prospective customers are averse to making changeovers from one
investment to another, even if there is a strong advice from investment
advisors to make a changeover.
c. Most investors are in search of tax free bonds rather than bonds on which tax
has to be paid, even though they may give a higher return.
d. Mutual fund brand image of BoB is popular.
e. There is lack of creativity and imagination in the wealth management service
provided by BoB.
f. Several popular schemes of wealth management are not prevalent in BoB.
g. Investment guidelines are not easily available and no dedicated cell in each
branch for the same.
h. Senior citizen FD schemes (of higher interest rate) not available in BoB.

OBJECTIVES
1) Through the past results, to identify the potential of wealth management
sector.
2) Understanding company’s procedure in wealth management department.
3) To know the comparative position of the companies offering wealth
management services.
4) To have a general notion on different asset classes available in financial
market.
5) To have a conceptualized view on wealth management services.

COMPANY PROFILE
A saga of vision and enterprise
It has been a long and eventful journey of almost a century across 25 countries.
Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech
Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise, financial
prudence and corporate governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted in
private capital, princely patronage and state ownership. It is a story of ordinary
bankers and their extraordinary contribution in the ascent of Bank of Baroda to the
formidable heights of corporate glory. It is a story that needs to be shared with all
those millions of people - customers, stakeholders, employees & the public at large
- who in ample measure, have contributed to the making of an institution.

Latest Quarterly/Half-yearly Company Statistics

As on(Months) 31-Mar-10(3) 31-Mar-09(3) % Change

Interest Income 43538.40 41387.80 5.20
Other Income 7668.90 8536.30 -10.16
Total Income 51207.30 49924.10 2.57
Interest Expenses 26088.90 26679.90 -2.22
Other Expenses 9645.10 10199.40 -5.43
Provision & Contingencies 3773.30 2097.40 79.90
OPBDT 11700.00 10947.40 6.87
Depreciation 0.00 0.00 --
Extra-Ordinary / Cash Adjustment 0.00 0.00 --
Provision for Tax 3451.70 3420.50 0.91
After tax Profit 9062.80 7526.90 20.41
Equity Capital 3655.30 3655.30 0.00
Reserves 134196.10 110216.60 21.76

INCOME STATEMENT

31-Mar-09(12) 31-Mar-08(12) 31-Mar-07(12)

Profit/Loss A/C Rs. mn %OI Rs. mn %OI Rs. mn %OI
150915. 118134. 92126.3
  Interest Income Earned 84.55 85.21 88.70
77 77 7
    Commission, Exchange and
7455.04 4.18 5401.68 3.90 4728.50 4.55
Brokerage Income
    Lease Income 0.00 0.00 0.00 0.00 0.00 0.00
    Dividend Income 322.24 0.18 109.38 0.08 318.72 0.31
    Miscellaneous Income 19799.3 11.09 14999.3 10.82 6685.19 6.44
 0 0
27576.5 20510.3 11732.4
  Other Income 15.45 14.79 11.30
8 6 1
178492. 100.0 138645. 100.0 103858. 100.0
Total Income (OI)
35 0 13 0 78 0
99681.6 79016.7 54265.5
  Interest Expenditure 55.85 56.99 52.25
8 1 7
23481.3 18037.6 16440.6
  Employee Expenditure 13.16 13.01 15.83
3 4 3
  Depreciation 2305.03 1.29 2319.96 1.67 1942.85 1.87
  Other Operating Expenditure 9974.26 5.59 8985.32 6.48 7059.65 6.80
20778.0
  Provision and Contingencies 11.64 8213.99 5.92 7607.43 7.32
4
156220. 116573. 87316.1
Total Expenditure 87.52 84.08 84.07
34 61 4
22272.0 22071.5 16542.6
Pretax Income 12.48 15.92 15.93
1 2 4
  Tax 0.00 0.00 7716.30 5.57 6278.00 6.04
  Extra Ordinary and Prior Period
0 0.00 0 0.00 0 0.00
Items Net
22272.0 14355.2 10264.6
Net Profit 12.48 10.35 9.88
2 2 5
22272.0 14355.2 10264.6
Adjusted Net Profit 12.48 10.35 9.88
2 2 5
Dividend – Preference 0.00 0.00 0.00 0.00 0.00 0.00
Dividend - Equity 3835.56 2.15 3409.39 2.46 2524.58 2.43

Balance Sheet
31-Mar-
31-Mar-09 %BT 31-Mar-08 %BT %BT
07
  Equity Capital 3655.28 0.16 3655.28 0.20 3655.28 0.26
  Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00
Share Capital 3655.28 0.16 3655.28 0.20 3655.28 0.26
Reserves and Surplus 124700.13 5.48 106783.99 5.95 82844.10 5.79
Deposits 1923969.5 84.60 1520341.2 84.65 1249159.7 87.26
 2 7 9
Borrowings 56360.86 2.48 39270.48 2.19 11425.62 0.80
Other Provisions and
165381.47 7.27 125944.14 7.01 84376.96 5.89
Liabilities
2274067.2 100.0 1795995.1 100.0 1431461.7 100.0
Capital and Liabilities (BT)
5 0 6 0 5 0
Fixed Assets 23097.19 1.02 24270.08 1.35 10888.08 0.76
Investments 524458.76 23.06 438700.68 24.43 349436.28 24.41
1439858.9 1067013.2
Advances 63.32 59.41 836208.70 58.42
6 4
Cash & Money at Call 240871.17 10.59 222992.87 12.42 182803.65 12.77
Other Current Assets 45781.17 2.01 43018.29 2.40 52125.04 3.64
2274067.2 100.0 1795995.1 100.0 1431461.7 100.0
Properties and Assets (BT)
5 0 6 0 5 0
Ratio Analysis
As on 31-Mar-09 31-Mar-08 31-Mar-07
Profitablility
Interest Income/Total Income (%) 84.60 85.20 86.70
Non Interest Income/Total Income (%) 15.40 14.80 13.30
Reported Net Profit/Total Income (%) 12.50 10.40 9.90
Net Interest Income/Total Income (%) 28.70 28.20 34.40
Net Interest Margin (%) 3.60 3.70 4.30
Return Related
ROE (%) 17.40 13.00 11.90
ROA (%) 1.00 0.80 0.70
Leverage & Capital Measures
Customer loans/deposits (%) 74.80 70.20 66.90
Investments/Deposits (%) 27.30 28.90 28.00
Total Liabilities/Networth 17.70 16.30 16.50
Growth (%)
Growth in Interest Income 27.75 31.20 27.72
Growth in Interest Expenses 26.15 45.61 40.04
Growth in Employee cost 23.34 9.71 7.89
Growth in PAT 55.15 39.85 24.13
Growth in Deposits 26.55 21.71 33.37
Growth in Borrowings 43.52 243.71 --
Per Share
Book Value Per Share (Rs) 351.10 302.10 236.60
Earnings Per Share (Rs) 60.90 39.30 28.10
Dividend Per Share (Rs) 10.50 9.30 6.90
The Bank has strengths in both retail and corporate banking and is
committed to adopting the best industry practices internationally in order to
achieve excellence.

Theoretical Background
INTRODUCTION
The term Wealth management now a day has a lot of importance. So many
Banking companies are engaged in this business of Wealth management. The
premier insurance industry is now booming because so many bankers are also
adopting and playing safe in the business of insurance the term called is Bank-
assurance. Now a day Wealth Management has a lot of craze in the corporate
world. In a survey it was found that India had 300,000 millionaires by end of year
2009 which had grown up by 21% from an year earlier (Asia pacific Wealth
report).
The Wealth management services area in financial sector has been witnessing more
attention during last couple of years. C Merrill Lynch Wealth Report 2009 cites
number of HNWIs globally to be around 9.5 million with wealth held by them
totaling to US$37.2 trillion in year 2006. Value of wealth held by HNWI
represents an increase of around 11.4% since 2005.
Considering long-term high value business proposition, number of banks and niche
players has started offering full range of wealth management services targeted to
HNWIs and emerging effluents.
While growing volume of premium services to affluent clients becomes the key
driver for most of the service provider firms, many unique elements inherent to
wealth management services requires completely different service offering model
than the existing model for transactional services. Greatly accustomed in offering
commoditized financial services so far, demand of unconventional form of service
model poses a big challenge in charting growth path for these wealth
management firms.
CONCEPT OF WEALTH MANAGEMENT
The term Wealth management formed with two words Wealth & Management.
The Meaning of Management They have already seen in the steering introduction.
The meaning of Wealth is – Funds, Assets, investments and cash it means the term
Wealth management deft with funds Asset, instrument, cash and any other item of
similar nature. While defining Wealth Management They have to think in planned
manner. “Wealth Management is an all inclusive set of strategies that aims to
grow, manage, protect and distribute assets in a much planned systematic and
integrated manner”.

WEALTH MANAGEMENT RANGE

The Indian market has been segmented by Wealth management service providers
into five categories, namely:
Ultra-high net worth, or Ultra-HNW (in excess of US$30 million), will have a
total population of 10,500 households by 2012.
Super high net worth (between US$10 and $30 million) will have a total
population of 42,000 households by 2012.
High net worth (between US$1 million and $10 million) will have a total
population of 320,000 by 2012.
Super affluent (between US$125,000 and $1 million) will have a total
population of 350,000 households by 2012.
Mass affluent (between US$25,000 and $125,000) will have a total population
of 1.8 million households by 2012.
Mass market (between US$5,000 and $25,000) will have a total population of 39
million households by 2012.

Key Elements of Wealth Management Services

Wealth management services involve fiduciary responsibilities in providing
professional investment advice and investment management services to a client.
Depending on the mandate of the services given to the Wealth Manager, wealth
management services could be packaged at various levels:
a) Advisory
b) Investment Processing (transaction oriented)
c) Custody, Safekeeping and Asset Servicing
d) End-to-end Investment Lifecycle Management
Wealth management services comprises of following key
function areas of:
(a) Financial Planning
(b) Portfolio Strategy Definition/ Asset Allocation / Strategy Implementation
(c) Portfolio Management –Administration, Performance Evaluation and Analytics
(d) Strategy Review and Modification.

a) Financial Planning
 Client Profiling
Client profiling takes in account multitude of behavioral, demographic and
investment characteristics of a client that would determine each client’s wealth
management requirements. Some of key characteristics to be evaluated for defining
client’s investment objective are:
Current and future Income level
Family and life events
Risk appetite / tolerance
Taxability status
Investment horizon
Asset Preference /restriction
Cash flow expectations
Religious belief (non investment in sin sector like - alcohol, tobacco, gambling
firms,
or compliant with Sharia laws)
Behavioral History (Pattern of past investment decisions)
Level of client’s engagement in investment management (active / passive)
Present investment holding and asset mix
 Investment Objective
Based on the client profile, investment expectations and financial goals of the
client could be clearly outlined. Defining investment objectives helps to identify
investment options to be considered for evaluation. Investment objective for most
of the investors could be generally considered amongst the
following:
 Current Income
Growth (Capital Appreciation)
Tax Efficiency (Tax Harvesting)
Capital Preservation (often preferred by elderly people to make sure they don’t
outlive their money.)
b) Portfolio Strategy Definition / Asset Allocation
Defining Portfolio Strategies and Portfolio Modeling

After establishing investment objectives, a broad framework for harnessing

possible investment opportunities is formulated. This framework would factor for
risk-return tradeoff of considered options, investment horizon and provide a
clear blueprint for investment direction. Investment strategy helps in forming broad
level envisioning of asset class (Securities, Forex, Commodity, Real State,
Reference and Indices, Art/Antique and Lifestyle Assets (Car, Boat, Aircraft)),
market, geography, sector and industry. Each of these asset classes is to be
comprehensively evaluated for inclusion in portfolio model, in view of defined
investment
While defining the strategy, consideration of client preference or avoidance for
specific asset class, risk tolerance, religious beliefs is the key element, which
would come into picture. Thus, for a client with a belief of avoidance of
investment in sin industries (alcohol, tobacco, gambling etc.) is to be duly
taken care of. Likewise, for a client looking for Sharia-compliant investment,
strategy formulation should consider investment options meeting with the client
expectations.

Determination of Portfolio Constituents and Allocation of

Assets
Guided with the investment strategy, constituents in portfolio model are
determined, which would directly and efficiently contribute towards client’s
investment objectives. Thus, a broad level investment guidance of – “investment in
fixed income in emerging market” would further determine classification within
Fixed Income such as Govt. or corporate bonds, fixed or variable rate bonds, Long
or short maturity bonds, Deep discounted or Par bonds, Asset backed or other debt
variants. Return profile, risk sensitivity and co-relation of constituents within
portfolio model would help to determine the size (weightage) of each individual
constituent in the portfolio.
Having decided the portfolio constituents and its composition, transactions to
acquire specific instruments and identified asset class is initiated. As acquisition
cost would be having bearing on overall performance of the portfolio, many times
process of asset acquisition may be spread over a period of time to take care of
market movement and acquire the asset at favourable price range.
Portfolio Administration involves handling of investment processes and asset
servicing. This would also require tax management, portfolio accounting, fee
administration, client reporting, document management and general administration
relating with portfolio and client. This function would involve back office
administration and custodial services to manage transaction processes (trading and
settlement) – interfacing with brokers/dealers/agents, Fund managers, Custodians,
Cash,
agent and many other market intermediaries.

Performance Evaluation and Analytics

Performance evaluation of the portfolio is an ongoing process. Portfolio return is
continuously monitored and analyzed with respect to defined portfolio objectives.
Analysis dimension could be varied – simple and complex. These may include -
absolute return, relative return (in comparison to chosen benchmark), trend,
pattern, cost impact, tax impact, concentration, lost opportunity and other form of
sensitivity and what-if analysis. Any deviation of portfolio performance
observed during performance evaluation would lead to strategy review and any
possible alignment of portfolio strategy.

Strategy Review and Alignment Recalibration of Portfolio Strategy

Based on performance evaluation and future outlook of the investment, portfolio
strategy is evaluated on periodic basis. To keep it aligned with the defined
investment objectives, portfolio strategy is suitably re-calibrated from time to time.
Many times, review of portfolio strategy would be necessitated due to change in
client profile or expectations.

Rebalancing, Reallocation and Divestment of Assets

Any re-calibration of strategy and consequent change in portfolio model would
require rebalancing of the assets in portfolio. This would be achieved through
rebalancing the asset (divesting over-allocated part and acquiring under allocated),
relocation (from one sector the other or from one instrument to other instrument in
the same class) or complete divestment.

Key Challenge Areas

While immense business potentiality of this emerging sector is a driving point for
most of the firms, they face many challenges in formulating winning services
offering meeting the client needs. In the following section, we would briefly take
a look on the key challenges area in the present context.
Highly Personalized and Customized Services
Unlike other stream of financial services, mostly being transactional /
commoditized in nature, wealth management services require client specific
solution and service offering. No one solution exactly meets the needs of other
client. In a situation of highly personalized and customized nature of service
offering, developing any form of generic service model does not support growth of
the business.

Personal relationship driving the business

To meet client expectation of personal attention, mode of communication in wealth
management services tends to be highly personalized. Thus, the conventional grids
of communication, such as call centre, data centre does not fit
well. Success of wealth management services heavily draws on personal
interaction with the dedicated relationship manager, who takes care of whole
investment management lifecycle for bunch of clients on one-to-one basis. This
essentially requires service firm to invest heavily in human processes to groom and
retain a team on competent relationship managers with cross functional skills.
Evolving Client Profile
The biggest challenge in providing wealth management service offering is to factor
and reckon the evolving nature of client profile, in terms of investment objective,
time horizon, risk appetite and so on. Thus, a service model developed for a
particular client cannot remain static over a period of time. Any service model has
to be flexible enough to consider the dynamic nature of client profile and
expectations arising out of it.

Client Involvement Level

The conventional adage – the more money you have, more effort is needed to
manage it – proves to be otherwise in case of HNWIs. Generally, client
involvement in managing the finance remains on the lower side. This brings onus
of managing the whole gamut of investment and due performance single-handedly
on the shoulders of investment manager.

Passion Investment (Philanthropy and Social Responsibility)

In the recent years a trend has been observed that bulk of investments by HNWIs
has been directed towards passion investments (art, antique, jewellery, coins,
unique assets, luxury), philanthropy and social/community causes. As per World
Wealth report, 11% of HNW investors worldwide contributed to philanthropic
causes with a contribution over 7% of their wealth in year 2006. Ultra-HNWIs
contribution was even more - 17% of Ultra-HNW investors that gave to
philanthropy contributed over 10% of their wealth. In total, this equates to more
than US$285 billion globally. Against this backdrop, new breed of HNWIs expect
to strategically manage the wealth and personal resources allocated to philanthropy
purpose, in order to maximize its impact. This demands a relationship manager not
just to be a passive financial advisor rather a passionate partner sharing interest and
inclination of the associated client.

Limited Leveraging Capabilities of Technology (as an enabler)

In the recent times, we have witnessed technology a key enabler to help business to
expand its market reach with reduced cost of services offering. Online banking and
online trading/brokerage services are the best examples in this regard. Technology
leveraging has helped services firm to achieve universal proliferation of market
with substantially reducing transaction cost. As business rules and service
definitions to guide the applications tends to be quite composite in wealth
management services, leveraging the capabilities of technology to meet the
business requirement may not be highly feasible in the initial years.

Technical Architecture and Technology Investment

As business architecture is still evolving, a proven basis of resilient technical
architecture and framework to support the emerging business greatly remains
missing. In absence of this framework, any investment commitment towards
application development / system implementation would be fraught with severe
risk.

Intricate Knowledge of Cross-functional Domain

By very nature of wealth management, it not just involves matters of plain vanilla
finance but has intricate relationship with many elements of domestic /
international law, taxation and regulatory norms. In order to provide sound
investment guidance, a relationship manager is required to have intricate
knowledge of domestic/cross-border finance, accounting, legal and taxation
subjects.

Solution Framework
Generic services offering model is going to draw big blank in case of wealth
management services. A HNWI client expects exclusiveness in services in a
normal manner. In highly competitive market, key to success for a firm lies in
offering exclusiveness in services delivery (high quality services on most
personalized basis), going beyond the client expectations. A solution framework
with considered inclusion of following key elements would help firms in meeting
and exceeding client needs towards sustainable business growth.
Quality of Service Level
Quality of service level provided by the service provider firm would the key
determinant of growth and success in client acquisition, client satisfaction and
client retention aspects. In a sense, service offering could be developed in the form
of partnership with the client based on trust and integrity, where the relationship
manager remains highly responsive to client sensitivities and expectations. Without
over-emphasizing, a satisfied client would provide multitude of opportunities of
growth of business – through deepening the relationship, direct / indirect
referencing as well as cross selling of products. In the other situation of deficiency
in service level, he would not hesitate to move the business to another firm. This
keeps strong emphasis on continued engagement with the client on the aspects of
client expectation and servicing, rather than showing extra attention only during
the period of client acquisition. Focused around client needs, a broad framework of
service offering during whole lifecycle of client investment management would be
revolving around: Anticipate, Analyze, Advice, Act and Monitor cycle.
Key Challenge Area
Wealth management firms face many challenges in formulating Winning services
offering meeting the client needs. Some of the key challenges faced by wealth
management firms are:
1. Highly Personalized and Customized Services
2. Personal relationship driving the business
3. Evolving Client Profile
4. Client Involvement Level
5. Passion Investment (Philanthropy and Social Responsibility)
6. Limited Leveraging Capabilities of Technology(as an enabler)
7. Technical Architecture and Technology Investment
8. Intricate Knowledge of Cross-functional Domain

Solution Frame work

A HNWI client expects exclusiveness in services and key to success for a firm lies
in offering exclusiveness in services delivery (high quality services on most
personalized basis), going beyond client expectations. A solution framework with
considered inclusion of following key elements would help firms in meeting and
exceeding client needs towards sustainable business growth:
1. Quality of Service Level: Highly focused around client needs, a broad
framework of service offering would be revolving around: Anticipate, Analyze,
Advice, Act and Monitor cycle.
2. Universal Service Offering
3. Investment in People Processes
4. Price not a True Differentiator
5. Unconventional Delivery Channel and Communication
6. Flexibility of Technical Architecture: Against the background of lack of clarity
on business model and involved process, A loosely oriented technical architecture
with optionality and mix of Build – Buy – Integrate components would be
considered as a good beginning point. To meet the information technology
requirements, a firm has several alternatives (or combination of alternatives) to
consider:
Integrated solution approach: Developing in-house applications to meet end-to-
end new business requirements. Service Bureau /ASP Model: Information
technology service providers offering integrated end-to-end processing
infrastructure and services including core of business processes of wealth
management. Stand-alone commercial software product/solutions: Pre-packaged
solutions that can be focused to specific part of services or provide comprehensive
end-to-end processing.

To provide enough resilience and high business relevance, any of the considered
option and associated technical structure should keep due provisions for the
following key elements:
Rule based processing to manage complex business rules and service
definitions.

Client profiling / data management to cater a profile driven solution offering.

Complex decision support and client oriented analytics.
Flexibility to incorporate manual processing interfaces in applications.

Wealth Management – An Emerging Sector

Wealth management services area in financial sector, hitherto used to be the
preserve of some top multinational banks and financial firms- offering exclusive
services to a select few, has been witnessing more attention during last couple of
years. A booming economy, rising stock prices and an increase in income and
spending power have brought sharp focus on this sector. With an increasing
population of High Net worth Individuals (HNWIs)1, the unsaid tagline of earlier
days -
“Don’t call us. We’ll call you (if you are that wealthy!)” seems to be completed
altered in recent times. Considering long-term high value business proposition,
number of banks, financial firms and niche players has started offering full range
of wealth management services targeted to HNWIs and emerging effluents.

Universal Service Offering
To meet the client needs in holistic manner, product and service offering range of
the firm should be wide enough to cover the investment spectrum across its
lifecycle. In an ideal situation, a client would expect to deal with a single firm to
get complete range of investment management services. However, for various
business considerations of the service provider firm, in many situations it may not
be a viable proposition to offer those services. While universal service offering
with assortment of services under single umbrella is not attainable in house, it
could be achieved through active partnership and affiliation. But, due consideration
is required that quality of service level provided by partners / affiliates does not get
compromised in any manner. Any shortcoming in service quality, even if caused
by partner/affiliate’s services, would be ultimately impairing client satisfaction
towards the firm.

Investment in People Processes
As relationship manager remains the face of the firm to a client, success of the firm
would be greatly dependent on the skills, drive and enthusiasm of relationship
managers (to take an extra mile), while bonding and dealing with any of client
issues. This aspect is more challenging than as it appears. This necessitates
transformation of organizational philosophy towards its people and people
processes contributing to business success. Firms would be required to invest
heavily in human processes to attract, groom and retain a motivated team of
relationship managers, who will make the real difference between winning and
losing the game.


Price not a True Differentiator

Pricing as a key differentiator to distinct the service offering from one firm to other
may not be highly relevant in case of wealth management services. Focused on
performance and quality of service, pricing in isolation will not make much
meaning to service seeking clients. Client would always value the pricing from the
quality of services received. He will certainly not mind paying extra, if he finds
services offered to him meeting and exceeding his expectations.

Unconventional Delivery Channel and Communication
Delivery channel for service content and mode of communication has to be greatly
customized – aligned with the client-desired vehicles. This would require a process
of continuous re-inventing and re-defining the grid of delivery and communication
channels to meet client expectations. Impact of technological advancements and its
interplay on service delivery and communication method would certainly be an
equally challenging aspect to be factored in, while designing such strategies.

Flexibility of Technical Architecture

While business potential appears to be quite high, existing business architecture
still does not provide any sound basis to formulate technical roadmap. Added to
that, dynamic characteristics of client profile bring an increased challenge in
drawing a firm implementation blueprint. In the given situation, any big-bang
commitment towards technical implementation plan would not be a wise idea. A
prudent approach would be to get started on modular basis with progressive
integration of functional components in order of its functional significance.
Gaining insight and confidence around the business processes, this could be
gradually scaled over the period of time. To meet the information technology
requirements, a firm has several alternatives (or combination of alternatives) to
consider:
a) Integrated solution approach : Developing in-house applications to meet end-to-
end new business requirements. These applications are based on existing
technology architecture of the firm and are closely integrated with the existing
service models. It would be a least preferred choice in the current situation, on
count of cost, time, lack of clarity and complexity of solution.
b) Service Bureau /ASP Model : A recent trend has been witnessed in the solution
provider’s landscape. Many of information techno service providers have come out
with novel solution for investment management / investment processing platform
in the form of service bureau / ASP. This platform provides integrated end-to-end
processing infrastructure and services including core of business processes of
wealth management.
On the part of a wealth management firm, paying agreed charges to service bureau
provider, option of service bureau completely eliminates the requirement of
ongoing resource commitment and cost of maintaining information technology
infrastructure. While total cost of owning may be the key motivating point for a
wealth management firm to adopt service bureau model, the key consideration of
providing high quality of service level with enhanced responsiveness may not
be adequately answered.
c) Stand-alone commercial software product/solutions : Prepackaged solutions that
can be focused to specific part of services or provide comprehensive end-to-end
processing. These can be deployed independently or could be integrated with
existing systems. Cost, customization and integration difficulties would be the
challenging points. A loosely oriented technical architecture with optionality and
mix of Build – Buy – Integrate components would be considered as a good
beginning point. To provide enough resilience and high business relevance, any of
the considered option and associated structure should keep due provisions for the
following key elements:
Considering the complexity of business processes and involved business rules,
rule based processing would be the core of processing.
Client profile acquires many new dimensions with plethora of attributes. Client
data is required to be appropriately managed (aggregate / segregate) to build a
profile driven solution offering. Decision support and client oriented analytics
acquire more importance.
Applications should provide adequate flexibility to incorporate manual
processing interfaces.

SERVICES PROVIDED BY WEALTH MANAGEMENT

INSTITUTIONS
(1) Custodian Services
(A) Securities Safekeeping
(B) Income collection from Securities
(C) Settlement of Securities trades as directed
(D) Payment of fund when directed
(E) Timely settlement delivery

(2) Trust Services

(A) Charitable Trust
(B) Revocable Trust
(C) Irrevocable life Insurance Trust
(D) Special Need Trust
(E) Institutional Trust

(3) Retirement Plan Services

(A) IRA’s Custodian Or Trustee
(B) Defined Benefit Plans
(C) Defined Contribution Plans
Wealth Management Practice Orientation Overview
Transactors:
Product Expert: Handles high-volume transactions involving sophisticated
products or asset classes, such as foreign exchange derivatives.
Investment Broker: Handles transactions involving basic asset classes, such as
equities, fixed income and options.
Investment Managers:
Investment Advisor: Offers strategic investment planning, as well as playing a
handsome role in constructing, reviewing and rebalancing client portfolios.
Relationship Manager: Establishes and nurtures client relationships, delegating
portfolio management to internal or external managers.
Wealth Planners:
Wealth Planner: Offers holistic advice in accordance with client’s finances and
short/long-term goals, such as real estate, retirement and generational wealth
transfer.
Personal CFO: Aspires to provide quasi family-office services, often acting in
a lead discretionary role coordinating with the client’s other trusted advisors.

The significance of these practice-model categories is that each reflects a different

advisory approach, borne of a different perspective. While some firms claim to
have a single practice orientation, many actually use multiple models in and across
regions—and often leverage different models within their core markets to
capitalize on the strengths of individual advisors. As they move into new markets,
firms can create or exacerbate friction among the different advisory approaches
they use. Importantly, practice orientations need not be mutually exclusive, but the
mix of intra-firm practice models does need to be consciously managed

ADVANTAGES AND LIMITATIONS

ADVANTAGES: The following are the advantages of Wealth management

concept.
1) Helpful In Tax Planning : The Wealth management professional always shows
the good path to the customers and provide the service of tax planning. How to
minimize the tax and save more money?
2) Helpful In Selection of Investment Strategy: Another advantage from the
customer point of view is with the help of WM Professional the customer can
easily know the investment strategy and analyze risk and return.
3) Helpful In Estate Management: With the help of Wealth management
professional They can also manage their estate. Estate management is a task to
provide objective administration of their funds tailored to aim in responsible
distribution and protection of their overall estate.
4) Helpful in forward looking : They can say planning, that recognizes as Their
estate grows and changes occurs They require some team of professionals who
help us in future planning.
5) Helpful for Indian Economy : Banks which are engaged in business of WM
earning revenues from the foreign countries i.e. outsourcing for economy

LIMITATIONS

1. WM Reduces The Scope Of Management : Though They all know that

management has existence at all levels of life and society but the term Wealth
management only related with the higher level means rich people, and is not
having any plans and provisions for poor and lower and middle level of society.
2. Chances of Fraud : Another demerit or limitation of the WM concept is it is not
showing the actual position. The customer doesn’t know about the things going on
with using his Wealth and there may be chances of forgery and fraud with
customers.
3. Actual Picture VS Inflation : What is the actual position of market they don’t
know because everything is done by some WM professionals. So they cannot
assume their position in the market that also results in inflation because economy is
unknown about the actual state. There may be chance that the customers are in risk
but they are showing the false return and Vice-versa.

Consumer Point Of View : Wealth Management

Technically, PMS can be defined as hybrid service provided by portfolio
managers, which includes customised stock and mutual fund investing. Portfolio
managers can be of two kinds, discretionary or non-discretionary. Discretionary
portfolio managers manage the funds of clients independently on their own accord,
while the latter manage the funds according to their clients’ direction. Any person
who is registered with Securities and Exchange Board of India (Sebi) as a portfolio
manager is allowed to offer PMS. A list of these entities can be found at
www.sebi.gov.in.

PMS vs Wealth manager and fund manager.

PMS is completely different from priority banking and Wealth management.
Priority banking or Wealth management is the umbrella of products while PMS is a
product. So if priority banking and Wealth management is a grocery shop then
PMS is a specific grocery. Priority banking is usually offered to premiere
customers who have a relationship manager appointed, who would advice you on
your investments across the products offered by the bank like insurance, and
investment linked products (mutual funds, bonds and unit linked insurance plan).
Mutual funds and PMS differ on the degree of customization, minimum investment
and on the fee structure. Minimum investment required for PMS is more than
mutual fund. Unlike PMS, there is no concept of profit sharing in mutual funds.
Also, the level of customization of your investments is higher in PMS.

Is PMS for you?

PMS is for those people who don’t have the time or the expertise to do enough
research to take informed investment decisions. If you have the required time and
expertise, then you don’t need these services. Also, SEBI has prescribed a
minimum of Rs 5 lakh investment for PMS, which means the service is not for
small and medium investors. Risks involved. Though PMS is a good option for
managing your Wealth, it is not entirely without risk or pain. B.D. Sabu, executive
director, Pylon Engineers (India), had opted for Kotak’s PMS services. “Though
the relationship manager told me about the commissions and brokerage fees, he did
no promise any cut-off or absolute number when asked about returns. The market
was moving up when I invested and my money grew to about one and half times.
But when the market tumbled suddenly, my earnings fell substantially.” He adds,
“The company churned the portfolio frequently, which gave them two-way profit
on each transaction, as brokerage and profit sharing.” Sabu now feels it is better to
understand the market and invest on your own. He withdrew his investments after
14 months, even though he got returns of 25 per cent. Outlook Money tried
unsuccessfully to get a response from Kotak Securities on this episode.

How to choose a PMS

Investment philosophy.
Akhilesh Singh, business head, Emkay Wealth, says, “The most important factor
is to understand the fund manager’s investment philosophy and strategy, which
must align with the investor’s objectives.” Singh adds, “Some portfolio managers
structure long-term portfolios, while some prefer to actively churn the portfolio for
higher short-term returns, which adds to the overall cost and tax liability.”
HSBC, for instance, has a product called Strategic, which is for the long term,
while Angel’s Bluechip is for medium to long term investors.
Scheme benchmarks. Make sure that the portfolio is benchmarked to an
appropriate index. This helps measure the performance of the scheme and the
portfolio manager. Benchmarks are important also as profit-sharing is linked to the
performance of the portfolio above the benchmark. So, an aggressive portfolio
benchmarked to a low-return index will mean higher over-the-benchmark returns.
This means that you will have to share a larger portion of your profit. The wrong
benchmark distorts the performance of the fund.
Minimum investment. There are many portfolio managers whose thresholds
are much higher than the Sebi-mandated minimum of Rs 5 lakh. Choose a scheme
that fits the size of your portfolio.
Returns. It is difficult to judge a scheme’s performance based on returns, as it
may vary from the returns of an investor. Also, depending on the time of entry, an
investor’s returns may vary from that of others. Before signing the contract, make
sure your portfolio manager has a fair record of surpassing the returns from the
benchmark index for numerous years. I.V. Subramaniam, CEO and chief
investment officer, Quantum Advisors, says: “The performance should be judged
over long periods of time during both high and low market levels. There should not
be any survivor bias. This happens when an investor withdraws a portfolio due to
bad performance, or a portfolio manager removes a portfolio to show the
performance numbers of only good portfolios.”
Cost structure.
Portfolio managers usually have two kinds of charges— management fee, which is
fixed, and profit sharing, which is variable. You can also pay a fully fixed fee.
Further, if the portfolio is churned frequently, it adds to the cost due to higher tax
and brokerage. On each transaction you pay brokerage and short-term gains tax of
20 per cent. Management fee ranges from scheme to scheme. You could opt for a
higher performance-linked charge as it puts pressure on the fund manager to
perform better as he has a share in the profits.
Frequency of disclosure.
This varies from firm to firm, and largely depends on the agreement between the
investor and the company. Most NAVs are disclosed daily, but you can opt for a
company that also discloses portfolios daily.
Broking house. If the broker is internal, it may be possible that your portfolio is
churned frequently. Usually, asset management companies have external brokers,
while some, such as Religare, have both external as Well as internal
broking.
Assets under management (AUM).Though higher AUMs do not guarantee
higher returns, it remains an important factor. A low AUM could be an indicator of
poor performance. They believe that Rs 100 core AUM is a healthy floor.

CONCEPT OF ASSET CLASSES

Asset Mix
Asset mix is the allocation of a portfolio between asset classes, it balances return
and risk. Returns are a combination of the income from an investment and the price
appreciation over the period. Risk is usually proxies by the “standard deviation” of
returns, how much the return change about the long-term average.
List Of Different Asset Class
1. Fixed deposit
2. Mutual Fund
3. Equity
4 Commodities
5. Art Fund
6. Real-Estate Fund
7. Insurance product
8. Structured product
9. Gold
10.Currency
11.Oil

Fixed Deposits
FDs, are the most popular today. With FDs you deposit a lump sum of money for a
fixed period ranging from a few weeks to a few years and earn a pre-determined
rate of interest. FDs are offered by both banks and companies though putting your
money with the latter is generally considered riskier.
Merits and Demerits
The main advantage is that FDs from reputed banks are a very safe investment
because such banks are carefully regulated by the Reserve Bank of India, RBI, the
banking regulator in India.
Note that company FDs isn’t as safe as bank FDs because if the company goes
bankrupt you may lose your money. Make sure you check the credit rating of a
company before investing in its FDs. You should be especially wary of companies
which offer interest rates significantly higher than the average to attract your
money. The other advantage of FDs is that you have the option of receiving regular
income through the interest payments that are made every month or quarter. This
option is especially useful for retirees. On the flip side, a fixed deposit won’t give
you the same returns that you may get in the stock markets. For instance a stock-
portfolio may rise 20-30 per cent in a good year whereas a fixed deposit typically
earns only 7-10 per cent. A fixed deposit also doesn’t offer protection against
inflation. If inflation rises steeply during the maturity of the FD your inflation
adjusted return will fall. The rate of interest on FDs varies according to the
maturity with longer deposits generally earning a higher interest rate. Interest paid
on a fixed deposit is paid either monthly or quarterly according to the investor’s
choice. So if you invest Rs 3 lakhs in a one year fixed deposit which pays 8 per
cent you can earn Rs 2,000 of interest every month or Rs 6,000 of interest every
quarter.
Interest rates on FDs
The rate of interest on FDs varies according to the maturity with longer deposits
generally earning a higher interest rate.
Note that FDs vary quite a bit from bank to bank so you should search around
before investing. Interest paid on a fixed deposit is paid either monthly or quarterly
according to the investor’s choice. So if you invest Rs 3 lakhs in a one year fixed
deposit which pays 8 per cent you can earn Rs 2,000 of interest every month or Rs
6,000 of interest every quarter.

Effective Return
Before you invest in FDs you need to understand the concept of effective return
which is higher than the rate of interest on the FD. Effective return is relevant if
you choose to reinvest your interest every Year.

MUTUAL FUND
A mutual fund is a professionally managed firm of collective investments that
collects money from many investors and puts it in stocks, bonds, short-term money
market instruments, and/or other securities. The fund manager, also known as
portfolio manager, invests and trades the fund’s underlying securities, realizing
capital gains or losses and passing any proceeds to the individual investors.
Currently, the worldwide value of all mutual funds totals more than $26 trillion.
Since 1940, there have been three basic types of investment companies in the
United States: open-end funds, also known in the US as mutual funds; unit
investment trusts (UITs); and closed-end funds.
Similar funds also operate in Canada. However, in the rest of the world, mutual
fund is used as a generic term for various types of collective investment vehicles,
such as unit trusts, open-ended investment companies (OEICs), unitized insurance
funds, and undertakings for collective investments in transferable securities
(UCITS).
Types of mutual funds
Open-end fund
The term mutual fund is the common name for what is classified as an open-end
investment company by the SEC. Being open-ended means that, at the end of every
day, the fund issues new shares to investors and buys back shares from investors
wishing to leave the fund. Mutual funds must be structured as corporations or
trusts, such as business trusts, and any corporation or trust will be classified by the
SEC as an investment company if it issues securities and primarily invest in non-
government securities. An investment company will be classified by the SEC as an
open-end investment company if they do not issue undivided interests in specified
securities (the defining characteristic of unit investment trusts or UITs) and if they
issue redeemable securities. Registered investment companies that are not UITs or
open-end investment companies are closed-end funds. Neither UITs nor closed-end
funds are mutual funds (as that term is used in the US).
Exchange-traded funds
A relatively recent innovation, the exchange-traded fund or ETF, is often
structured as an open-end investment company. ETFs combine characteristics of
both mutual funds and closed-end funds. ETFs are traded throughout the day on a
stock exchange, just like closed-end funds, but at prices generally approximating
the ETF’s net asset value. Most ETFs are index funds and track stock market
indexes. Shares are issued or redeemed by institutional investors in large blocks
(typically of 50,000). Most investors purchase and sell shares through brokers in
market transactions. Because the institutional investors normally purchase and
redeem in kind transactions, ETFs are more efficient than traditional mutual funds
(which are continuously issuing and redeeming securities and, to effect such
transactions, continually buying and selling securities and maintaining liquidity
positions) and therefore tend to have lower their expenses.
Equity funds
Equity funds, which consist mainly of stock investments, are the most common
type of mutual fund. Equity funds hold 50 percent of all amounts invested in
mutual funds in India. Often equity funds focus investments on particular strategies
and certain types of issuers.

Capitalization
Fund managers and other investment professionals have varying definitions of
mid-cap, and large-cap ranges.

Bond funds
Bond funds account for 18% of mutual fund asset Types of bond funds include
term funds, which have a fixed set of time (short-, medium-, or long-term) before
they mature. Municipal bond funds generally have lower returns, but have tax
advantages and low risk. High-yield bond funds invest in corporate bonds,
including high-yield or junk bonds. With the potential for high yield, these bonds
also come with greater risk.
Money market funds
Money market funds hold 26% of mutual fund assets in India. Money market funds
entail the least risk, as Well as their rates of return. Unlike certificates of deposit
(CDs), money market shares are liquid and redeemable at any time. The interest
rate quoted by money market funds is known as the 7 Day SEC Yield.
Funds of funds

Are mutual funds which invest in other underlying mutual funds (i.e., they are
funds comprised of other funds). The funds at the underlying level are typically
funds which an investor can invest in individually. A fund of funds will typically
charge a management fee which is smaller than that of a normal fund because it is
considered a fee charged for asset allocation services. The fees charged at the
underlying fund level do not pass through the statement of operations, but are
usually disclosed in the fund’s annual report, prospectus, or statement of additional
information. The fund should be evaluated on the combination of the fund-level
expenses and underlying fund expenses, as these both reduce the return to the
investor.
Most FoFs invest in affiliated funds (i.e., mutual funds managed by the same
advisor), although some invest in funds managed by other (unaffiliated) advisors.
The cost associated with investing in an unaffiliated underlying fund is most often
higher than investing in an affiliated underlying because of the investment
management research involved in investing in fund advised by a different advisor.
Recently, FoFs have been classified into those that are actively managed (in which
the investment advisor reallocates frequently among the underlying funds in order
to adjust to changing market conditions) and those that are passively managed (the
investment advisor allocates assets on the basis of on an allocation model which is
rebalanced on a regular basis).
The design of FoFs is structured in such a way as to provide a ready mix of mutual
funds for investors who are unable to or unwilling to determine their own asset
allocation model. Fund companies have also entered this market to provide
investors with these options and take the “guess work” out of selecting funds. The
allocation mixes usually vary by the time the investor would like to retire: 2020,
2030, 2050, etc. The more distant the target retirement date, the more aggressive
the asset mix.
Hedge funds
Hedge funds are pooled investment funds with loose SEC regulation and should
not be confused with mutual funds. Some hedge fund managers are required to
register with SEC as investment advisers under the Investment Advisers Act. The
Act does not require an adviser to follow or avoid any particular investment
strategies, nor does it require or prohibit specific investments. Hedge funds
typically charge a management fee of 1% or more, plus a “performance fee” of
20% of the hedge fund’s profit. There may be a “lock-up” period, during which an
investor cannot cash in shares. A variation of the hedge strategy is the 130-30 fund
for individual investors.

Equity investment
Generally refers to the buying and holding of shares of stock on a stock market by
individuals and funds in anticipation of income from dividends and capital gain as
the value of the stock rises. It also sometimes refers to the acquisition of equity
(ownership) participation in a private (unlisted) company or a startup (a company
being created or newly created). When the investment is in infant companies, it is
referred to as venture capital investing and is generally understood to be higher risk
than investment in listed going-concern situations.
Direct holdings and pooled funds
The equities held by private individuals are often held via mutual funds or other
forms of pooled investment vehicle, many of which have quoted prices that are
listed in financial newspapers or magazines; the mutual funds are typically
managed by prominent fund management firms (e.g. Fidelity Investments or The
Vanguard Group). Such holdings allow individual investors to obtain the
diversification of the fund(s) and to obtain the skill of the professional fund
managers in charge of the fund(s). An alternative, usually employed by large
private investors and pension funds, is to hold shares directly; in the institutional
environment many clients that own portfolios have what are called segregated
funds as opposed to, or in addition to, the pooled e.g. mutual fund alternative.

Commodities Market

Commodity markets are markets where raw or primary products are exchanged.
These raw commodities are traded on regulated commodities exchanges, in which
they are bought and sold in standardized contracts. It covers physical product
(food, metals, electricity) markets but not the ways that services, including those of
governments, nor investment, nor debt, can be seen as a commodity. Articles on
reinsurance markets, stock markets, bond markets and currency markets cover
those concerns separately and in more depth. One focus is the relationship between
simple commodity money and the more complex instruments offered in the
commodity markets.
ART FUND
Wealth management now includes art, real estate investments. With prices of
paintings rising 10 times in the last two years, three new financial entities have
launched ‘art advisory’ services as part of Wealth management services. While
Citibank has been providing art advisory services like art insurance, art storage and
using art as a tradable collateral for some time, the recent surge in prices has driven
Yes Bank, ABN Amro and Dawnay Day to start this service. The works of M.F.
Hussain, Jatin Das or Anjolie Ela Menon are sought after by art lovers not only for
their aesthetic value but also as an asset. Art galleries are involved in art
valuations, i.e. mapping the
pricing history of an artist or research on art. Art is now being treated as an
investment and high net worth individuals are prompting banks to look at
alternative asset classes, such as art or real estate, for investment as a part of
Wealth management products.
Diversified portfolio
Individuals looking at alternative investments rather than the usual investments in
equity-related products. “Investments in alternative asset classes give clients a
diversified portfolio across a variety of asset classes,”
Yes Bank is expected to launch a Wealth management service that will offer
investment in real estate, art and jewellery. It expects to kick start the real estate
service during this fiscal.
“The bank is planning tie-ups with real estate consultant agencies. The service will
largely cater to non-resident Indians seeking opportunities to invest in real estate in
the country”.
Tie-ups with galleries
In the art segment, tie-up with art galleries. “Contemporary Indian art will be at
focus. The hiring specialists in the field for advisory,” High net worth individuals
in India are increasingly looking at contemporary Indian art as a good investment.
With the advent of private art funds and galleries, art is becoming an emerging
asset class. ABN Amro advises clients on investment in art. However, the
execution depends on the client in conjunction with experts in the field. It is
difficult to generalise. The majority of clients begin with an investment of around
4-5 per cent of their portfolio,” targets customers with Rs 2-2.5 crore threshold for
investment. According to the banks, some clients also invest in these asset classes
to minimise risk because they are looking at protecting their capital. Investment in
these asset classes requires a review of client’s age, personal ability to take risk and
most importantly, client’s interest. What percentage of assets would be allocated to
alternative assets would depend on the client’s interest and ability to take risk.
REAL ESTATE FUND
India Real Estate Fund is a significant component of the Indian realty market
flooded with Indian and foreign financial institutions. The growing increase in the
industrial, commercial and residential projects have boosted the real estate market
in India. This has thrown open unlimited scope for the incoming of the India Real
Estate Funds. The profits have encouraged financial assistance from not only
domestic funds but also lured many foreign investors to participate in the India
Real Estate Fund. The cooperating assistance from the government has further
encouraged liquidity flow into the India real estate market sector. The foreign
contributions in the India Real Estate Fund have been witnessing a steady rise of
40%-45% per year. The domestic financial institutions have also build up their
investments like their foreign counterparts. This combined participations from both
along with contributions of the corporate houses has accelerated the growth of
India Real Estate Fund.

Leading India Real Estate Fund:

Some of the leading India Real Estate Fund are :
1. HDFC Property Fund- HDFC India Real Estate Fund (HI-REF), the first scheme
HDFC Property Fund, invest in all the stages of the real estate projects.
2. DHFL Venture Capital Fund- DHFL Venture Capital Fund, promoted by Dewan
Housing, has a focus on developing properties rather than investing in real estate.
3. Kshitij Venture Capital Fund - Kshitij Venture Capital Fund, a group venture of
Pantaloon Retail India Ltd., will be deploying funds exclusively in developing
malls specially in western and southern India.
4. India Advantage Fund (ICICI)
5. Kotak Mahindra Realty Fund

• India Real Estate Mutual Fund:

The further involvement of the real estate mutual funds have improved the quality
of the construction practices. The 10th Five-Year Plan has proposed that Securities
and Exchange Board of India would regulate the India real estate mutual funds.

• Real Estate Investment Trusts:

The primary difference between Real Estate Investment Trusts and a mutual fund
is that investments made in the former are traded in real estate stocks and not
invested in company stocks moreover they provides a heavier liquidity than the
mutual funds.
• India Real Estate Foreign Funds-
The significant international investments in the India Real Estate Fund are like:
1.Warburg Pincus
2.Blackstone Group
3.Broadstreet
4.Morgan Stanley Real Estate Fund
5.Columbia Endowment Fund
6.Hines
7.Tishman Speyer
8.Sam Zell’s Equity International

Insurance Product
The modern concept of insurance practices in India started during the British rule
in 1818 when Oriental Life Insurance Company was established in Calcutta. India
became independent from British rule in 1946, and by 1956 the insurance sector
was nationalized, with the Life Insurance Corporation of India created by
combining almost 245 private life insurance companies; 107 private non-life
companies combined in 1973 to form the General Insurance Corporation. But since
the very purpose of nationalizing the insurance sector got sidelined due to the
monopolistic power it enjoyed, coupled with the bureaucratic mindset of LIC and
GIC, insurance again was opened to private players in 1999. During 2000-2006,
almost 15 life and 13 nonlife private insurance players (mostly joint ventures
between Indian and foreign players) started operations in India, indicating the
willingness of foreign institutional investors to enter the Indian insurance sector.
But through all these major changes the actual impact was felt only in major urban
areas, while the vast majority of the rural population was excluded from the
insurance sector. Around the world, scholars and financial experts believe that in
the next 5 to 10 years, India and China are going to be the targets for insurance
companies. So far, most of the insurance companies in India are not actively
tapping the huge potential of the rural markets. Unless the rural markets are given
priority consideration, all predictions about future insurance industry potential in
India are going to be distant dreams. The present insurance business is not even
able to penetrate 20%-30% of the total population of 1.095 billion, and the
projected population figure by 2025 will be approximately 1.501 billion. The order
of the day will be to refocus on micro insurance in India to capture the huge
potential of rural customers Unit Linked Insurance Plan (ULIP) provides for life
insurance where the policy value at any time varies according to the value of the
underlying assets at the time. ULIP is life insurance solution that provides for the
benefits of protection and flexibility in investment. The investment is denoted as
units and is represented by the value that it has attained called as Net Asset Value
(NAV).
ULIP came into play in the 1960s and is popular in many countries in the world.
The reason that is attributed to the wide spread popularity of ULIP is because of
the transparency and the flexibility which it offers.
As times progressed the plans They are also successfully mapped along with life
insurance need to retirement planning. In today’s times, ULIP provides solutions
for insurance planning, financial needs, financial planning for children’s marriage
planning also can be done with this.
Structured Product
A structured product is generally a pre-packaged investment strategy which is
based on derivatives, such as a single security, a basket of securities, options,
indices, commodities, debt issuances and/or foreign currencies, and to a lesser
extent, swaps. The variety of products just described is demonstrative of the fact
that there is no single, uniform definition of a structured product. A feature of
some structured products is a “principal guarantee” function which offers
protection of principal if held to maturity. For example, an investor invests 100
dollars, the issuer simply invests in a risk free bond which has sufficient interest to
grow to 100 after the 5 year period. This bond might cost 80 dollars today and after
5 years it will grow to 100 dollars. With the leftover funds the issuer purchases the
options and
swaps needed to perform whatever the investment strategy is. Theoretically an
investor can just do this themselves, but the costs and transaction volume
requirements of many options and swaps are beyond many individual investors. As
such, structured products were created to meet specific needs that cannot be met
from the standardized financial instruments available in the markets. Structured
products can be used as an alternative to a direct investment, as part of the asset
allocation process to reduce risk exposure of a portfolio, or to utilize the current
market trend.
Composition
Structured products are usually issued by investment banks or affiliates thereof.
They have a fixed maturity, and have two components: a note and a derivative. The
derivative component is often an option. The note provides for periodic interest
payments to the investor at a predetermined rate, and the derivative component
provides for the payment at maturity. Some products use the derivative component
as a put option written by the investor that gives the buyer of the put option the
right to sell to the investor the security or securities at a predetermined price. Other
products use the derivative component to provide for a call option written by the
investor that gives the buyer of the call option the right to buy the security or
securities from the investor at a predetermined price.
Risks
The risks associated with many structured products, especially those products that
present risks of loss of principal due to market movements, are similar to those
risks involved with options. The potential for serious risks involved with options
trading are wellestablished, and as a result of those risks customers must be
explicitly approved for options trading.
GOLD
Factors influencing the gold price
Today, like all investments and commodities, the price of gold is ultimately driven
by supply and demand, including hoarding and disposal. Unlike most other
commodities, the hoarding and disposal plays a much bigger role in affecting the
price, because most of the gold ever mined still exists and is potentially able to
come on to the market for the right price. Given the huge quantity of hoarded gold,
compared to the annual production, the price of gold is mainly affected by changes
in sentiment, rather than changes in annual production. According to the World
Gold Council, annual mine production of gold over the last few years has been
close to 2,500 tonnes. About 3,000 tonnes goes into jewelry or industrial/dental
production, and around 500 tonnes goes to retail investors and exchange traded
gold funds.
This translates to an annual demand for gold to be 1000 tonnes in excess over mine
production which has come from central bank sales and other disposal. Central
banks and the International Monetary Fund play an important role in the gold
price. At the end of 2004 central banks and official organizations held 19 percent
of all above-ground gold as official gold reserves. The Washington Agreement on
Gold (WAG), which dates from September 1999, limits gold sales by its members
(Europe, United States, Japan, Australia, Bank for International Settlements and
the International Monetary Fund) to less than 400 tonnes a year. European central
banks, such as the Bank of England and Swiss National Bank, have been key
sellers of gold over this period. Although central banks do not generally announce
gold purchases in advance, some, such as Russia, have expressed interest in
growing their gold reserves again as of late 2005. In early 2006, China, which only
holds 1.3% of its reserves in gold, announced that it was looking for ways to
improve the returns on its official reserves. Many bulls hope that this signals that
China might reposition more of its holdings into gold in line with other Central
Banks. In general, gold becomes more desirable in times of:

Bank failures
When dollars were fully convertible into gold, both were regarded as money.
However, most people preferred to carry around paper banknotes rather than the
somewhat heavier and less divisible gold coins. If people feared their bank would
fail, a bank run might have been the result. This is what happened in the USA
during the Great Depression of the 1930s, leading President Roosevelt to impose a
national emergency and to outlaw the holding of gold by US citizens known as
Executive Order 6102 which has since been ended.

Low or negative real interest rates

If the return on bonds, equities and real estate is not adequately compensating for
risk and inflation then the demand for gold and other alternative investments such
as commodities increases. An example of this is the period of Stagflation that
occurred during the 1970s and which led to an economic bubble forming in
precious metals.
War, invasion, looting, crisis
In times of national crisis, people fear that their assets may be seized and that the
currency may become worthless. They see gold as a solid asset which will always
buy food or transportation. Thus in times of great uncertainty, particularly when
war is feared, the demand for gold rises.

Currency
The modern hedge fund manager’s liberal tongue-in-cheek definition is: “If it
moves up and down independently, then it’s an asset class.” While currencies
surely do a lot of moving up and down, they also stand out for other reasons:
The global foreign-exchange (FX) market can be considered by far the largest
marketplace in the world, not only geographically but also with reference to
trading volume. The daily turnover is growing constantly and has long ago
surpassed the $1 trillion mark: forty times the size of world trade.
An important difference between currencies and other markets is that currency
prices allow us to analyze also their reciprocal values. A falling dollar/yen is
synonymous with a rising yen because the dollar can be expressed in yen and, vice
versa, the yen in dollars. By comparison, the dollar is never measured in units, as
the Dow Jones for example.
For the same reason the expression ‘short sale’ – so much maligned in equity
trading – does not exist in currency trading because the short sale of a currency is
equivalent to a purchase of the other currency.For similar reasons, the currency
market cannot suffer a ‘crash’ through which the wealth of all market participants
dwindles. In the currency market each loss is matched by an equivalent gain of the
counter-party.
Another unique feature of the currency market is that it is active without
interruption
‘round-the-clock’.

Portfolio composition of currency

Modern portfolio theory postulates that relative risk can be reduced by
diversification into at least six or more components. This is not necessarily true for
currency portfolios. Most delivering percentage returns. The index serves as a
proxy for available currency manager portfolio returns in general and has the
added benefit of being uncorrelated to returns of other asset classes. Low
correlation, liquidity and transparency are good enough reasons for currencies to
be considered a prime candidate for inclusion in any investment portfolio.

Companies Providing Wealth Management

Services
Kotak securities
INTRODUCTION
It is handling Wealth management department with a name of Kotak
portfolio management.
PRODUCTS
GEMS Portfolio
Origin
Select Portfolio
Select Optima
Klassic Portfolio - Flexi
Investguard Portfolio
Core Portfolio
NRI
They are providing above products according to the customer requirement. The
above products are varying to high risk customers to low risk customers with a
time origin of investment .They have a separate service for NRI asset management
service.

ASSET CLASSES USED

Direct Equity
Mutual funds
Structured products
Insurance products
Fixed deposits.

Asset Size
It is also one of the largest, with Assets Under Management of over Rs. 3300
Crores.

Morgan Stanley
INTRODUCTION
Morgan Stanley is a leading global financial services firm providing a wide range
of investment banking, securities, investment management and Wealth
management services. The Firm’s employees serve clients worldwide including
corporations, governments, institutions and individuals from more than 600 offices
in 33 countries Mutual Fund has a unique investment team model, best described
as a ‘Community of Boutiques’, which aims to ensure that each investment
strategy is managed by a dedicated team with specific experience in that strategy.
Morgan Stanley which has been active in the country since 1993 and is seeking to
develop an integrated platform in India, which encompasses the full range of
businesses the Firm conducts globally.

PRODUCTS
Large Cap Growth Equity with Sridhar Sivaram and Amay Hattangadi as Lead
Portfolio Managers.
Multi/Mid cap Equity with Jayesh Gandhi as Lead Portfolio Manager.
Multi-Strategy with Navneet Munot as Lead Portfolio Manager.
Morgan Stanley A.C.E. (Across Capitalisations Equity) Fund, an
open-ended equity scheme managed by Jayesh Gandhi, was
launched in February, 2008 as the first fund open ended offering
of Morgan Stanley Mutual Fund in India.
ASSET CLASSES USED
Mutual funds
Structured products
Insurance products
Fixed deposits.

Asset size
The India Magnum Fund, an offshore fund set up in 1989, marked the entry of
Morgan Stanley in the Indian market. In 1994, Morgan Stanley launched its first
domestic fund, Morgan Stanley Growth Fund (MSGF). As of December 31, 2007,
Morgan Stanley Rs 4380 crores in assets under management. Morgan Stanley
Investment Management, together with its investment advisory affiliates, has
nearly 1000 investment professionals around the world and approximately US$577
billion in assets under management or supervision as of February 29, 2008. By
leveraging its
global ‘community of boutiques’ structure and the strength of Morgan Stanley,
MSIM strives to provide outstanding long-term investment performance, service
and a comprehensive suite of investment management solutions to a diverse client
base, which includes governments, institutions, corporations and individuals.

Moti Lal Oswal Wealth Management

INTRODUCTION
In today’s complex financial environment, investors have unique needs which are
derived from their risk appetite and financial goals. But regardless of this, every
investor seeks to maximize his returns on investments without capital erosion.
While there are many investment avenues such as fixed deposits, income funds,
bonds, equities etc…. It is a proven fact that Equities as an asset class typically
tend to outperform all other asset classes over the long run. Investing in equities,
require knowledge, time and a right mind-set. Equity as an asset class also requires
constant monitoring may not be possible for you to give the necessary time, given
your other commitments. They recognize this, and manage your investments
professionally to achieve specific investment objectives, and not to forget,
relieving you from the day to day hassles which investment require.
PRODUCTS
Value Portfolio
Bull’s Eye Portfolio
Next Trillion Dollar Opportunity Portfolio
ASSET CLASSES USED
Direct Equity
Mutual funds
Structured products
Insurance products
Fixed deposits

Asset Size
Motilal Oswal Securities Ltd brings with more than 2 decades of experience &
expertise in equity research and stock broking. They are one of the leading
portfolio service providers, with asset under management worth Rs. 590 Crores

Religare Wealth Management

INTRODUCTION
Wealth Spectrum
Portfolio management
Art Intiative
Priority Client Equity Service
In The continuous endeavor to provide the best of the product and services to the
clients, it The Religare and Macquarie are now 50:50 Joint venture partners in the
newly created entity Religare Macquarie Wealth Management Limited. The new
entity is testimony to Religare’s firm commitment to all its
businesses wherein, it believes in offering nothing short of the very best to its
clients and the end consumers. In order to do so, it believes in creating and
delivering value by either going solo or by leveraging relevant and meaningful
partnerships with global majors and domain specialists. They believe that this joint
venture with Macquarie is a marriage of strengths that combines the sharp
understanding, insights and execution capabilities of Religare in the Indian context
with the global expertise of Macquarie. The new brand for the venture-Religare
Macquarie Private Wealth shall strive to proactively manage their Wealth and is
hungry and keen to bring about a much needed refreshingly different paradigm
shift in the Indian market place.Religare Macquarie Private Wealth shall draw
strength and its core
essence from the values of Religare’s “Diligence” and Macquarie’s “Forward
Thinking”.
PRODUCTS :
Panther
Tortoise
Elephant
Caterpillar
Leo

Panther
The Panther portfolio aims to achieve higher returns by taking aggressive positions
across sectors and market capitalizations. It is suitable for the “High Risk High
Return” investor with a strategy to invest across sectors and take advantage of
various market conditions.
Tortoise
The Tortoise portfolio aims to achieve growth in the portfolio value over a period
of time by way of careful and judicious investment in fundamentally sound
companies having good prospects. The scheme is suitable for the “Medium Risk
Medium Return” investor with a strategy to invest in companies which have
consistency in earnings, growth and financial performance.

Elephant
The Elephant portfolio aims to generate steady returns over a longer period by
investing in Securities selected only from BSE 100 and NSE 100 index. This plan
is suitable for the “Low Risk Low Return” investor with a strategy to invest in blue
chip companies, as these companies have steady performance and reduce liquidity
risk in the market.

Caterpillar
The Caterpillar portfolio aims to achieve capital appreciation over a long period of
time by investing in a diversified portfolio. This scheme is suitable for investors
with a high risk appetite. The investment strategy would be to invest in scrip’s
which are poised to get a rerating either because of change in business, potential
fancy for a particular sector in the coming years / months, business diversification
leading to a better operating performance, stocks in their early stages of an upturn
or for those which are in sectors currently ignored by the market.

Leo
Leo is aimed at retail customers and structured to provide medium to long-term
capital appreciation by investing in stocks across the market capitalization range.
This scheme is a mix of moderate and aggressive investment strategies. Its aim is
to have a balanced portfolio comprising selected investments from both Tortoise
and Panther. Exposure to Derivatives is taken within permissible regulatory limits.

ASSET CLASSES USED :

Equities (Including International)
Debts
Commodities
Structured Products
Emerging Investment Classes.
Religare Arts Initiative (RAI)
Religare Arts Initiative (RAI)
The Indian arts Industry is currently valued as one of the growing industries of the
world market. Art prices in India are escalating every year. The Religare Arts
Initiative is a venture of Religare Enterprises Limited with a view to provide a
quality platform and infrastructure for Arts. This initiative has been envisioned as a
true champion “for the cause of arts”. The RAI will provide a platform for artists
of all ages, genres, and statures. They are already in the process of creating a
transparent and highly rich infrastructure that would involve cataloguing,
documentation, art research, and the development of an art aesthetic on an
institutional basis. RAI will work closely with the Indian art and design schools on
the issues such as the curriculum and resources to bring them into the same quality
domain as their international counterparts. RAI’s envisaged activities include
building infrastructure for arts, creation of an arts awareness program, creation of
spaces / canvases for the artists, creation of International quality Gallery Spaces,
providing Art Advisory Services and much more.
ASSET SIZE : Rs. 410 cr.

Standard chartered
INTRODUCTION
Priority Banking – personalized Wealth management program at Standard
Chartered Bank. It is their endeavor to be the Right Partner in all their personal and
business ventures. That’s why Priority Banking has been tailored to offer you the
highest level of service, appropriate to your unique requirements and status.
PRODUCTS :
Excel Banking
In today’s fast moving, technology-driven world, you need your bank to keep pace
with your banking needs. That’s why you need Excel Banking - a much
personalised Wealth management service that has been designed to help you make
the most of your money, without taking up most of your time. With the services of
their personal Relationship Manager customer can access complete Wealth
management solutions, from routine banking and transaction management to more
complex investment services and insurance advisory services. What’s more, you
also get fee waivers on premium savings and current accounts and preferred
pricing on a range of complementary banking products and services.
Here are the unique features of Excel Banking:
Access to a personal Relationship Manager
Exclusive privileges such as a free gold card, free debit cards and discounts on
lockers, demat accounts and overdraft against term deposits.
Free multi-city cheque book for current account and savings account holders.
Express cheque collection and national clearing speed service.
Free demat account.
Extended branch hour for easier and quick transactions.
Redirection of interest into any account specified by you.
Phone Banking and ATM facilities for 24 hour access
Parivaar Account
Parivaar is a unique Wealth Management Solution from Standard Chartered Bank
that offers your family flexibility, convenience and essential tools for Wealth
accumulation and preservation.
Parivaar is much more than a regular Savings Account. It allows you maintain your
individual identity while allowing you to tap your family’s financial strength.
Here are some of the features of the Parivaar savings account :
Your family can maintain individual savings accounts with the benefit of
clubbing balances in grouped accounts.
Anytime, anywhere access to accounts through ATMs, Phone Banking and
Online Banking.
Globally valid ATM-cum-debit card can be used at 3,26,000 merchant outlets
in India and 14 million outlets worldwide.
ASSET CLASSES USED :
Equities
Debts
Mutual funds.
Commodities
Structured Products
ASSET SIZE- Wealth Management Department has asset under management is
Rs.710 Cr.

ABN AMRO WEALTH MANAGEMENT

ABN AMRO NRI Services, under the aegis of Van Gogh preferred banking brings
to you a personalized and comprehensive solution through their exclusive Wealth
Management Services. They will help you preserve and enhance your Wealth
generated in India and abroad with a range of exclusive Investment and Insurance
solutions.
ABN AMRO Asset Management is the separately organized investment
management division of ABN AMRO Bank. ABN AMRO Asset Management is
headquartered in London and Amsterdam with other main units in Atlanta,
Chicago, Hong Kong and Singapore. It has significant experience in managing
money for over 2000 institutional clients including central banks, pension funds,
insurance companies and other institutions. In addition to managing funds for
institutional clients, ABN AMRO Asset Management offers tailored investment
management services to private clients. It employs 2000 people worldwide in over
30 countries, with portfolio managers and analysts located around the world. All
investment products benefit from the valuable source of local expertise, while
portfolios are often managed locally. This local knowledge is used as input for
international co-ordination of the investment policy. ABN AMRO Asset
Management’s approach to full-service investment management underlines Their
commitment to long term client relationships. They believe that excellence can
only be achieved when investment performance and risk management are
combined with high-quality client servicing. Their goal is to add value by offering
risk-controlled outperformance in the context of specific benchmarks and
investment horizons of their investors.

PRODUCTS
INVESTMENT SERVICES : They recognize financial needs vary and there is no
“one-size-fits all” approach. ABN AMRO Investment Services brings to you an
unmatched blend of personalized services and an array of innovative and exclusive
products suited for each of your investment needs. Whether you are in India or
abroad, They extend Their hand of partnership as your trusted financial advisors.
Their expert Investment Counselors ensure that your individual risk profile is
drawn so that They can cater to your specific and precise investment needs.
Optimal asset allocation among a wide range of investment products helps to
create a portfolio best suited to your requirements and preferences, while
maintaining the best balance between risk and return
ASSET CLASSES USED
Expertise In All Asset Classes
As a global, full-service investment manager, they offer their broad customer base
capabilities in all major asset classes, and a spectrum of products including both
fundamentally driven investment approaches and more quantitative investment
processes. ABN AMRO Asset Management has significant experience in
managing money for consumers as well as for institutional clients including central
banks, pension funds, insurance companies and other institutions.
ASSET SIZE -US $40.40cr

HSBC Financial Planning Services

Your portfolio can be managed in a fully discretionary manner from a selection of
‘Best of Breed’ third party panel of Portfolio Management Service providers.
The main objective is to help you to preserve your wealth in line with your
investment objectives.
Inflation, falling interest rates and fluctuating market conditions require you to
plan your finances carefully. Celebrate important occasions in the future by
managing your Wealth Well now. HSBC’s Financial Planning Services offer
assistance to secure your future. Their Financial Planning Services are available for
existing HSBC customers and are free of cost. Launched in India in November
2002, HSBC Investments manages assets of over INR 10,684 crores, spread across
21 schemes and plans under the HSBC Mutual Fund umbrella, as of end August
2006. HSBC Investments has also soft-launched HSBC Alpha Account, the
Portfolio Management services (PMS) Business to manage wealth for High Net
worth Individuals. Currently, the PMS business offers two product baskets,
namely, the Signature Portfolio andStrategic Portfolio.
ASSET CLASSES USED
Traditional investments :
Direct Equity Advisory : Customized advice on direct equity portfolios based on
your risk profile and specific requirements. The proposition, backed by
comprehensive in-house research, entails building portfolios with fresh funds or
restructuring legacy portfolios to provide better risk adjusted returns. Mutual Funds
: Our open architecture philosophy and ‘Best of Breed’ selection of debt and equity
mutual funds allows you to buy the top performing mutual funds available in the
market.

Non - traditional Investments :

Structured Products : Combinations of derivatives and financial instruments create
structures that have significant risk/return features that may not be otherwise
available in the marketplace. Structured products are designed to provide investors
with highly targeted investments tied to their specific risk profiles, return
requirements and market expectations. Real Estate Venture Funds : To provide you
with diversification avenues which reduce the overall portfolio risk, we seek to
bring to you opportunities in real estate space through venture capital funds
available in the market.
ASSET SIZE
Globally, the Group Investment Business currently manages and distributes assets
over US $ 297 billion worldwide, at the close of May 2006. Assets, which range
from retail mutual funds and money market funds to lifecycle products to
portfolios for private clients and institutions.

Citi Bank
INTRODUCTION
Citi has the largest footprint among wealth managers in the Asia Pacific with more
than 20 offices across the region. Over 2,000 wealth management professionals,
including 600-plus private bankers, financial advisors and investment specialists,
serve 6000 high net worth individuals and families, including half of all
billionaires in Asia ex-Japan. Citi Global Wealth Management is a top-tier global
wealth manager providing some of the best institutional capabilities available
today. Serving both private and institutional clients, Citi Global Wealth
Management taps the strength and resources of Citigroup to maximize value and
service. The Global Wealth Management division at Citi comprises three of the
most respected brands in wealth management:

PRODUCTS
Citi Private Bank
Citi Smith Barney
Citi Investment Research.

ASSET SIZE Rs.530Cr.

Structured products :
Art advisory services :-
In today’s market, art presents an attractive investment option. To assist you with
advice on various art investments, or to help you in buying or selling art, Citigold
has tied up with a reputed art house, Osians - Connoisseurs of Art Private Limited.
Osians is based in Mumbai and possesses the expertise, archival infrastructure and
professional capacity to systematically cohere various sTheirces of knowledge and
provide select Citigold clients objective information on purchasing, preserving,
valuing and selling art for seasoned connoisseur and emerging collectors. Citigold
together with Osians will now help you strengthen your investments in art by
providing you the following services:
Documentation and Archiving
Authentication, Certification and Valuation
Preservation and Restoration
Insurance and Custodial Services.
Publication and Design Services
Art and Cultural Events Management
Corporate Gifting
Museum and Collection Building Services.
Estate Planning
Citi bank Time Deposits
Deposits held in units of Rs. 1000 for easy liquidity.
Flexible tenures from 15 days to 5 years.
Overdraft facility of up to 90% against your deposit to fund another investment
opportunity.
Automatic roll over facility to renew your deposit when it matures.
An exclusive set of structured products like market linked products.

ICICI Wealth Management

INTRODUCTION
In India ICICI bank is a very Well known bank in the field of Wealth management.
ICICI Bank will float subsidiary for the purpose of WM activities in Canada &
other market even as ICICI has rolled out ICICI Group Global Private Clients for
those with net worth of $ 1 million or more. ICICI GCPC launched their business
in Dubai very recently in the month of April-08 and caught 2500 clients. They are
going to add another 1000 high network clients this year. ICICI Bank is using the
services of global players like Merrill Lynch, City group, and UBS for catching the
clients for Wealth Management business. ICICI Bank and its subsidiaries are
engaged in the development of various attractive products (services) for the clients
with net worth of $ 1 million. The eyes of ICICI Group Global Pvt. Clients on the
rising number of dollar millionaires at present they are 100,000 in number in few
year the number will definitely increase. India’s No.2 lender banker ICICI expects
to sustain the 70% growth in its private Wealth management business. ICICI has
150,000 customers with investible surplus of at least Rs. 10 lakhs equity, real
estate and private equity is driving the
private banking business in India. India has market of Wealth management about $
600 billion.

Asset classes used

ONLINE TRADING : They also bring to you the best value for money through
competitively priced brokerage charges for online share trading services from
www.icicidirect.co. With a 3-in-1 account consisting of a trading account, ICICI
Bank savings account and demat account, you can stay connected to the market at
all times. To add to this, They give you waiver on the account opening charges too!
With a 3-in-1 account consisting of trading, ICICI Bank account and demat
account, you can enjoy:
Competitive priced brokerage rates
Reduced account opening charges
Online share trading services
MUTUAL FUNDS :
They offer you advice on the entire universe of mutual funds. So be it equity funds,
where you look for growth and capital appreciation or debt funds for capital
preservation, They can help you select the right mix to suit you. Choose from an
array of more than 15 fund houses with innumerable schemes.
Customised Products
Structured Products : Their Structured Product offerings are tailor-made to suit
your investment objective and risk appetite. Their services include Portfolio
Management Services and specially designed products that are Equity or Index-
linked in nature.
Alternate Asset Products : They offer products which complement your
existing investments eg. Art Funds, Private Equity Funding, Realty Funds
Life and General Insurance
Asset SIZE
Rs.1230 Cr.
INVESTMENT PHILOSPHY Our approach emphasizes a globally diversified
investment strategy designed to provide above average performance, at below
average risk.
AXIS BANK & WEALTH MANAGEMENT
One of India’s leading private sector banker Axis bank also combined with Banque
Privee Edmond de Rothschild Europe based Wealth management expertise
institution & is going to make new standard for the NRI’s Wealth management.
The LCF Rothschild group has based its reputation in the area of Wealth
management on its big banking experience. Actually the institution is engaged in
the task of providing financial advise to the Europe’s leading families, Government
and various corporations for the last ‘7’ generations.
The Axis Bank 5th largest bank by market capitalization in India provides payroll
services to over 12000 corporates across 2.8 million salary accounts. The market
capitalization of Axis Bank was 235 million in the last year 2007 is engaged in the
business of Wealth management, with its international presence in Dubai,
Singapore Hong Kong, Shanghai and so on.

BANK OF BARODA
The Bank Of Baroda Wealth Management includes
Insurance
 Mediclaim Insurance
 Mutual Fund
Domestic Operations
 e-Broking

Bank of Baroda has set up dedicated desks at the SITB, headed by experienced
professionals, for undertaking various types of treasury activities in different
financial markets. Apart from activities pertaining to management of funds and
liquidity, the domestic treasury also handles financial instruments like:

 Commercial Papers (CP)

 Certificate of Deposits (CD)
 Government Securities
 Treasury Bills (TB)
 Bonds and Debentures
 Equities and various other derivatives.

The products and services offered by SITB cater to the inter-bank market as well
as to the corporate customers of the bank. The Bank is an active participant both in
the inter-bank market and the corporates for all the products.

The Bank offers its customers, including firms, companies, corporate bodies,
institutions, provident funds trusts, Regional Rural Banks, Urban Cooperative
Banks and Non-Banking Financial Companies opportunities to invest in
Government Securities as allowed by Reserve Bank of India for non-competitive
bidding.
Forex Operations

Bank of Baroda, one of the major public sector banks in India having a strong
global presence with a wide network of 61 overseas offices, including those of
subsidiaries, spread over 16 countries, is considered as a market leader in foreign
exchange operations in India. At present the Bank is having branches / offices in
countries like USA, UK, Belgium, South Africa, Hong Kong, UAE, Oman, Fiji
Islands, Mauritius, Seychelles, Bahamas, Guyana, Kenya, Uganda and Zambia

The Bank has completed fifty years of operations in overseas territories and is
poised to expand its reach to countries like Tanzania and China, apart from
consolidating its overseas operations in those countries where the bank has already
made its presence felt.

The modern state-of-the-art dealing room at its Specialised Integrated Treasury

Branch (SITB) at Mumbai provides the necessary wherewithal to its 95 designated
branches across the length and breadth of the country authorized to handle foreign
exchange business of its clientele. The bank has retained its primacy as a leading
market maker both in spot and forward markets, along with foreign exchange swap
markets.

The forex dealing desk at the SITB is provided with all modern communication
facilities and is in the process of linking all its authorized branches via Reuters
Automated Dealing System, to provide on-line quotes for foreign exchange
transactions.

Through its large network of authorized branches, the bank caters to the foreign
exchange needs of its clientele engaged in export and import trade and the SITB
provides rates for conversion of all major world currencies like U S Dollar,
Sterling Pounds, Euro, Swiss Francs, Japanese Yen and other exotic currencies.
The services to the customers of the Bank include hedging of foreign currency
risks by providing forward covers and various derivatives product.

Since most of its overseas branches are strategically situated at places where
sizeable Non-resident Indians are residing, the Bank is in a position to deliver its
products promptly and efficiently to its NRI customers. The range of products
includes remittance facilities and acceptance of deposits in Indian Rupees (NRE /
NRO) as well as in designated foreign currencies (FCNR). Resident as well as
Returning Indians can avail of benefits like Resident Foreign Currency Accounts
(RFC).
Baroda e-Trading
Bank of Baroda in association with M/s. India Infoline Ltd. brings forward a fast,
easy, transparent and hassle-free way for investing / trade in shares in secondary
capital market through National Stock Exchange and Bombay Stock Exchange.
Investment in shares traded on the NSE and BSE can be made without having to
visit your share-broker. All other associated hurdles like tracking of settlement
cycles, paying and receiving funds in savings account, paying and receiving shares
in Demat accounts have been removed. Now from a remote location while on tour,
picnic, holiday - through internet and laptop / personal computer - you can also
trade in the stock market. What's more you have access to world class research
reports, absolutely free, on trading and investment from India Infoline.

How Baroda e-Trading can help you?

Baroda e-Trading is 3-in-1 integrated account. Bank of Baroda helps you to

integrate your banking, demat and trading accounts. You can trade in shares
backed by funds and securities available in your bank / demat account. Trading has
been made very easy even for beginners.

India Infoline Baroda e-Trading, an on-line share trading in shares facility is

offered under a tie-up arrangement with M/s India Infoline Ltd. (IIL), one of the
most reputed and leading brokerage house. IIL is SEBI registered member of both
the stock exchanges NSE, BSE. They are also leading brokers in commodities
market. Under Baroda e-Trading following will be provided to you by IIL:

 Investor Terminal & Trader Terminal - Trading work station that refreshes
the rates on its own of stocks that are of interest to you. For traders, this is a
premium service and available at a cost or minimum brokerage amount.

 Multi exchange trading :Trade execution on both the exchanges, BSE &
NSE.

 Instant Limit - based on funds transferred to trading account

 MIS - You can generate / view / print your accounts related reports and
details (contracts/bills/ledger, trade register, net position details, etc.) any
time any where.

Baroda e-Trading : 3-in-1 Account: will help you to

 open your account with any of our CBS branches

 open Demat account can be opened either with us or with IIL

 open e-Trading account with IIL

 The account opening forms contain all necessary agreement cum power of
attorney for enabling online trading

 All these agreements are as per the guidance of SEBI

Baroda Health

"Baroda Health" (Mediclaim Insurance Policy) for Bank’s Account holders.

With a view to offer value added services to our customers, we have

developed a co-branded insurance product called as "BarodaHealth"
(Mediclaim Insurance Policy) for Bank's Account holders w.e.f. 23rd
February 2006 available at all branches across the country.

What is Baroda Health Policy?

It is a Medical Insurance Scheme, available only to account holders of our
Bank, which takes care of the hospitalization expenses incurred by the
customer up to the amount of sum insured, in respect of the following
eventualities.

 Any illness / disease

 Accidental injury and/ or any ailment.

 Any surgery that is required in respect of any disease or accident that

has arisen during the policy period

 The minimum hospitalization should be for 24 hours

Key Benefits :

 Very low premium

 In this co-branded product, single premium (generally payable for a

 single person) is payable and Medical Health insurance cover is
available to family of -4- (self, spouse and 2 dependent children) up to
the amount insured without any additional premium.

 A member or all the members in insured family can avail

hospitalization benefits during the policy period, to the extent of
aggregate sum not exceeding the sum insured.

 Premium paid is eligible for Income Tax exemption under Section 80 D

as per Income Tax Rules.

Salient features:

 No medical examination required for commencement of health cover.

 Pre-existing diseases also get coverage after 3 continuous claim-free

policy years.

 Coverage options available: 8 slabs ranging from Rs. 50,000/- to Rs.

5,00,000/- per family of 1+3.

 Upper age limit of primary member (first named person) is allowed

upto 80 years, if a person obtains the insurance cover before completion
of 65 years and continue to renew the policy up to the age he wishes to
or 80 years, whichever is earlier.

 The scheme is administered through Third Party Administrators (TPAs)

for settlement of Hospitalization Claims under the insurance cover.

 The insured individuals get cashless hospitalization facility also in the

selected hospitals through TPAs. The whole process is hassle-free and
treatment upto the limit of insurance is available without any payment
at the time of admission or discharge. Payment of hospital bill up to the
sum insured will be taken care of by the TPA directly.

Scope of cover:

 Room, Boarding expenses as provided by the Hospital / Nursing Home.

 Nursing expenses.

 Surgeon, Anaesthetist, Medical Practitioner, Consultants, Specialists

 Fees.

 Anaesthesia, Blood, Oxygen, Operation Theatre Charges, Surgical

appliances, Medicines & Drugs, Diagnostic Materials and X-Ray,
Dialysis, Chemotherapy, Radiotherapy, Cost of pacemaker, Artificial
Limbs and cost of organs and similar expenses.
 Additional Covers

Terms and Conditions:

 This policy is available only to account holders of our Bank.

 Period of insurance cover is one year. The policy needs renewal on or

before the expiry date for continuity.

 The Premium Payable (currently in force).

 The family for this purpose means self, spouse and two dependent
children.
 Non-earning son / daughter is considered dependent (scholarship
amount is not considered as income). However, Married daughters are
not considered dependent.

 There are certain diseases / expenses which are not covered in the
scheme. Kindly check the details of these Major Exclusions
 The insured will receive the following documents directly from the
insurance co. and TPA

 Original Receipt (can be used as proof for claiming

IT rebates U/s 80D of Income Tax Act.)
 Policy
 TPA guide book
 Identity Card issued by TPA

 The scheme is administered through Third Party Administrators (TPAs)

for settlement of Hospitalization Claims under the insurance cover.
Please check details for Claim Procedure

SURVEY
QUESTIONNAIRE

TICK MARK THE RIGHT ALTERNATIVE

1. What is your age?

A. 30 years or younger
B. 31-49
C. 50-60
D. 60 and above

2. What do you expect to be your next major expenditure?

A. Buying a house, investment real estate, etc.
B. Paying for a college education
C. Capitalizing a new business
D. Providing for retirement

3. When do you expect to use the bulk of the money you have been accumulating in your
investments?
A. At any time now – so a high level of liquidity is important
B. Probably in the near future – 1 to 5 years from now
C. In 6 to 10 years
D. Probably in 11 to 20 years from now

4. Over the next several years, you expect your household annual income to:
A. Stay about the same
B. Grow moderately
C. Decrease moderately
D. Decrease substantially

5. Due to a general market correction, one of your investments loses 14% of its value a short
time after you buy it. What do you do?
A. Sell the investment so you won’t have to worry if it will continue to decline
B. Hold on to it and wait for it to climb back up
C. Buy more of the same investment – because at the new low price, it looks even better than
when you bought it

6. Which of these plans would you choose for your investment rupee?
A. You would go for maximum diversity, dividing your portfolio among all available investments,
including those ranging from highest return, greatest risk to lowest return, lowest risk
B. You are concerned about putting all your eggs in one basket, so you would divide your
portfolio amount into two investments with high rates of return and moderate risk
C. You would put your investment rupee into the investment with the highest rate of return and
the most risk

7. Assuming you are investing in a stock mutual fund, which one do you choose?
A. A fund with companies with the potential to make significant technological breakthroughs,
and whose stocks are still at their low initial offering prices
B. A fund that only invests in established, well-known companies that have a potential for
continued growth
C. A fund devoted to “blue chip”, highly diversified stocks that pay dividends

8. Assuming you are investing in only one bond, which bond do you choose?
A. A “junk bond” that pays a higher interest rate than the other two bonds, but also gives you the
least sense of security with regard to possible default
B. A “treasury bond”, which pays the lowest interest rate of the three bonds, but is backed by
the Indian government
C. The bond of a well-established company that pays a rate of interest somewhere between the
two other bonds
D. A “tax-free bond” since minimizing taxes is your primary investment objective

9. Your investment advisor expects inflation to return and suggests that you invest in “hard
assets” such as real estate, which have historically outpaced inflation. Your only “financial
assets” are long-term bonds. What do you do?
A. Ignore the advice and hold onto the bonds
B. Sell the bonds, putting half the proceeds into “hard assets” and the other half into money
market funds
C. Sell the bonds and put all the proceeds into “hard assets”
D. Sell the bonds, put the proceeds into “hard assets” and borrow additional money so you can
buy even more “hard assets”

10. You have an opportunity to fund an underwater salvage operation to recover sunken
treasure. The chance of finding the vessel and recovering the treasure is only 25%. But, if the
operation is successful, you could earn 75 to 100 times your investment. How much would you
invest?
A. Nothing at all
B. One month’s salary
C. Three month’s salary
D. Six month’s salary

11. You have just reached the Rs10,000 plateau on a TV game show. Now you must choose
between quitting with the Rs10,000 in hand or betting the entire Rs10,000 in one of the three
alternate scenarios. Which do you do?
A. The Rs10,000 – you take the money and run
B. A 50% chance of winning Rs50,000
C. A 20% chance of winning Rs75,000
D. A 5% chance of winning Rs100,000

FINDINGS
CUSTOMER PROFILING
(On The Basis Of The Survey Conducted)

Based on different financial needs an average life cycle has been

divided into 4 stages of Financial Planning as given below.
 Upto 30 years of age
 30-45 years of age
 45-60 years of age
 Over 60 years

Upto 30 years of age
 General Profile :-
 Out of college/Professional Course.
 Junior or Mid level employment.
 Have had an average work life of 5-8 yrs.
 Unmarried or recently married.
 Small family.
 Nuclear family / Joint family.

General Characteristics :-
 Salary surpluses, especially if single or DINK.
 Minimal family responsibilities
 Propensity to spend/overspend
 Find investment/saving as Boring & waste of time.
 Lack of inclination to invest.
 Lack of proper information on investment.
 Do not need regular income from investment.

 Investment Needs :-
 Repayment of professional studies loan.
 Plan for tax.
 Saving for white goods/new vehicle.
 Biggest need is to save enough for a down payment for a house.
 Start to build an emergency fund.

Recommendation :-
 Negotiate tax-efficient salary.
 Budget and keep track of expenses.
 Use credit card prudently.
 Save regularly and consciously.
 Recommended Investment Style :-
 Should be an aggressive investor.
 Should focus on long term capital growth rather than
short term capital preservation.
 Have a long term investment horizon, as a balance of productive working life is
high.
 Can invest in high risk, high gain products

Recommended distribution of asset :-

90 % investments in equity.
10 % investment in debt.
 Should start SIP or recurring deposit through auto debit facilities to ensure
disciplined and compulsory savings.
 Should start planning for or at least start thinking about retirement.
 Product Recommendations :-
 If salaried, approximately 24% of basic is necessarily invested in PF and can be
supplemented with NSC & PPF.
 If self employed/professional, should start a PPF/Pension plan investment to
provide for retrials.
 Invest part of the surplus marked for equity investment , in equity oriented funds
like :
o Diversified equity funds(60%)
o Sector funds(10%)
o Tax saving funds(20%)

Between 30-45 yrs :-


General profile :-
 Married , usually with children
 Middle to senior level employees.
 Have had an average work life of 10-15 yrs.
 May have dependent parents
 Usually a personal vehicle owner.
 Already invested in a home/seriously thinking of investing in a home.

General Characteristics :-
 Surplus funds are limited.
 Lifestyle expenses go up
 Children need/expenditure is of prime importance.
 Household expenses are gradually increasing
 Realize the need for investment planning but lack time for investment planning.

 Investment Needs :-
 Shelter income from taxes.
 Plan for children’s higher education
 Start to build capital for retirement ,if not started already.
 Maintain an emergency fund & keep adding to it.
 Buy a home/service a home loan.
 Save for holidays/recreation.

 Recommended Investment Style :-

 Can take medium to high risk.
 Should continue to focus on capital growth.
 Investment horizon is still more than 5 yrs.
 Follow thumb rule of 100 less your age in years as percentage of savings to be
invested in equity.
 Upto 60% of surplus funds can be invested in equities.
 15% of surplus funds in liquid funds.
 25% in Bonds/PPF/NSC.

 Product Recommendations :-
 Diversified equity funds, more tilted towards large caps for capital growth for
retirement or seed money for home loan.
 Build up a direct equity.
 Invest in children specific mutual funds to provide for children’s higher
education needs .
 NSC and PPF to balance investments in equity.
 Tax efficient saving through ELSS.
 Keep adding to short term floating rate funds and bank FD’s for emergency
fund.
 Get medical insurance for your dependent parents.
 Get household contents insured.
 Get a life insurance against your home loan.
 Get an accident insurance against any disabilities.

Between 45-60 yrs.

General Profile :-
 Usually at the peak of career
 Grown up children.
 May need take care of dependent children.
 Retirement is not very distant.
 Could opt for VRS.
 May have a inherited portfolio of investments from
parents.

General Characteristics :-
 surplus fund higher than in previous life stage.
 High outgo on household expenses.
 Children expenses continue to increase.
 Life style expenses still high.
 2-3 major outflows of money (overseas education/marriage/set up business).
 High liquidity is a must.
 Sensitized to medical and retirement needs.

Recommendations :-
 Decide when to retire.
 Acquire all necessary consumer durables while still to plug future outflows.
 Consolidate and continue with wealth creation
 Start de-risk taking your portfolio.
 Revisit and revise financial goals.
 Rebalance your portfolio as per future needs.
 Medical insurance a must.
 Pension plans must be started if not done already.
 Prepare a will.

 Recommended Investment Style :-

 Greater vulnerability to risk hence focus on moderate
balanced growth.
 Shift focus from capital growth to capital preservation.
 Investment time horizon comes down.
 Turning point as investment debt now outpaces investment in equity.
 Up to 40% of surplus funds in equity.
 Up to 60 % of surplus funds in debt.

Product recommendation :-
 Prepay or finish all loans by 55 years of age.
 Invest in balanced funds or MIP’s
 Phase out high risk sector funds gradually.
 Keep investment in well-diversified large cap funds.
 Investment in debt should be around NSC & Bonds.
 Short term deposits and floating rate funds,along with cash or liquid funds
should be maintained for liquidity.
 Consolidate direct equity portfolio : gradually move part of it to high dividend
yield stocks.
 Keep all surplus funds in liquid/floater funds.


Above 60 years of age

 General profile
 Retired/working part time
 Living in self owned house.
 Children may be living separately.
 Dependent parents, needing medical attention, may be part of family.
 Could have grand children.
 Have more leisure time.

General Characteristics
 Income from existing investments, usually the only source of regular income.
 Surplus funds usually not available for additional investments.
 Capital preservation is the primary need.
 High life expectancy hence present capital has to stretch over a long time.
 Life style expenses go down.
 Medical expenses go up.

Investment needs.
 Regular income needed from investments.
 Emergency funds for medical etc.
 to be liquid and high.
 Preservation of wealth.
 Money for traveling/gifts.
 Need funds to pursue hobbies to keep busy.

Recommendation
 Monitor expenses to fit into the retirement income.
 Ensure tax efficiency of returns on investments
 Explore second careers/part time employment.
 Check excess liquidity as it needs to reduced returns on investments.
 Too much cash should not be kept with oneself in the house, as it may be a risk.
 Do maximum purchase transaction through debit cards to avoid the needs of
cash withdrawals.

 Recommended investment style

 Most challenging phase of life.
 Capital preservation of utmost importance.
 Low risk appetite.
 Income generation & consumption phase of investment.
 Investment horizon low.
 Maximum 15% equity exposure.

 Product Recommendations
 Invest in MIP’s and balanced equity funds.
 Senior citizen’s saving schemes.
 Post office monthly schemes.
 FD’s with monthly schemes.
 RBI Bond
 Continue with direct equity portfolio with high dividend yield stocks.
 Avail all possible tax breaks available to senior citizens
 Switch some investments from equity to debt and money market products.
 Go for systematic withdrawal plans(reverse of SIP).
 Growth portion of portfolio should be reduced to maintain only enough amount.
Health mediclaim.

BASED ON 2006-2009 DATA

POSITION OF INDIA IN WEALTH MANAGEMENT

 DATA FROM ICICI PRUDENTIAL

The wealth management industry in India is experiencing an evolutionary phase of

development, according to Celent. With the liberalization of the Indian economy
and subsequent growth and prosperity across sectors, the wealth management
industry is poised to gain greater traction. Celent segments the Indian wealth
management market and looks at trends and opportunities at the provider end.
According to the report, India is slated to become a US$1 trillion market (in assets
under management) for wealth management providers by 2012, with a target
market size of 42 million households. In the annual survey done by Cap Gemini,
SA and Merrill Lynch it was found that ranks of millionaires grew 6% in the
previous year, because the number of richer people grew in India & China where
India is competing China. India & China posted the biggest gain in millionaires
advancing by 23% & 20% respectively.
The facts were collected by Capegemini, S.A. and Merrill Lynch survey report.
India has 23% growth in the last year. The biggest Asian economy China stands on
second position with 20%, west Asia 16%, United States 4% and United Kingdom
(UK) 2%. So they can understand that there is more opportunities in the Wealth
management business in Asia specially in India.
Risk aversion of Indian customers
The repercussions of the mutual fund scandal of the 1990s are still evident. Many
Indian retail customers averse to diversifying their asset base into higher risk
classes. To account for this conservative tendency, PFS offerings can be tailored to
emphasize the value of a lower-risk investing approach.
“New money” mass affluent customers are not accustomed to Wealth management.
Most customers are used to obtaining financial services on an as needed basis
without much regard to a full view of their financial Well-being. As part of the
opportunity to define and develop offerings for India’s emerging HNW population,
customers may need an introduction to the concept of private banking (or Wealth
management). There is a shortage of skilled personal financial advisors. To date,
the PFS opportunity has been limited to a very small segment of the population, so
domestic banks have not generally developed expertise in comprehensive personal
financial
management. Global banks can take advantage of this gap by leveraging advisory
competencies that they have cultivated in other markets, importing that expertise
into the Indian market.
BIBLIOGRAPHY

1. Wealth Management July09 banking poll-r9 report.

2. www.moneycontrol.com.
3. www.google.com.
4. ICICI Prudential Asset Management Report.
5. World Wealth Report 2009 - Merrill Lynch, Capgemini.
6. “Year-End Review of Markets & Finance,” The Wall Street Journal, January 2,
2009
7. The Economist Intelligence Unit, January 2008.
8. Investment Strategy - No.6 August 2006 Societe Generale Asset
Management.
9. Goldman Sachs Asia Pacific Report.
10. IBM Business Consulting Wealth Management Report.
11. Axis Bank Reports.
12. Bank Of Baroda Reports and Database
13. Russia Trading System, http://www.rts.ru/en, accessed June 2010.
14. K.F. Wealth Report 2010.