BHARATI VIDYAPEETH

(DEEMED TO BE UNIVERSITY),
PUNE INDIA
Institute of Management and Entrepreneurship

Development, Pune

A STUDY ON THE ANALYSIS OF FINANCIAL ADVISORS RESPONSES

WITH REFERENCE TO INVESTMENT IN MUTUAL FUNDS

A Summer Training Project Report

Submit ted in Partial Fulfillment of the Requirements for the

A Ward of degree of Master of Business Administration

2018 – 2020

SUBMITTED BY GUIDED BY
NAME: - RUSHIL BHATIA MR. YOGESH GURAV
ROLL NO: - 128
DIVISION: - B
 Certificate of Originality

This is to certify that the project entitled “A study on the role of financial advisors in Nj wealth Pune”
Submitted to Bharati Vidyapeeth (Deemed to be University), Pune in partial fulfilment of the
requirement for the award of the degree of MBA is an original out by Mr. RUSHIL BHATIA under
the guidance of Mr. YOGESH GURAV. The matter embodied in this project is a genuine work done
by Rohit Yadav to the best of my knowledge and belief and has not been submitted before, neither to
this University nor to any other University for the fulfilment of the requirement of any course of study.

Signature of the Student Signature of the Guide

Designation
 Certificate

This is to certify that the Project titled “A STUDY ON THE ANALYSIS OF FINANCIAL
ADVISORS RESPONSES WITH REFERENCE TO INVESTMENT IN MUTUAL FUNDS” is
an academic work done by “Rushil Bhatia” submitted in the partial fulfilment of the requirement for
the award of the Degree of MBA from Bharati Vidyapeeth (Deemed to be University), Pune. It has
been completed under the guidance of Mr. Yogesh Gurav and Mr. Abhay Vishwakarma. We are
thankful to NJ wealth for having allowed our student to undergo project work training. The authenticity
of the project work will be examined by the viva examiner which includes data verification, checking
duplicity of information etc. and it may be rejected due to non-fulfilment of quality standards set by
the Institute.

Dr. Sachin S. Vernekar

Dean FMS, BVDU

Director IMED
 Acknowledgement

Apart from my efforts, the success of my project depends largely on the encouragement and guideline of many
others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful
completion of this project.

I am gratefully indebted to our esteemed guide Mr. Yogesh Gurav for his sincere guidance and priceless support
which would have been impossible for us to complete this project.

I express my gratitude to the staff members of Bharati Vidyapeeth (Deemed to be University) who directly or
indirectly helped me. I would also like to express my sincere gratitude to all my office colleagues in NJ wealth.

Finally, I thank Institute of Management and entrepreneurship Development (IMED) for giving me this golden
opportunity to do my summer internship in NJ wealth.

Name and Signature of the Student

 Preface

In this era of fast changing world, mere class room teaching is not sufficient to attain maturity and perfection for
application of theory into practice. The dynamic economy, political and technological environment in which we
live continually place demand on us to change, improve and learn more about jobs, superiors and subordinates.
Two years of continuous classroom teaching is sufficient for students to implement directly their knowledge in
the market. A practical approach is needed.

The knowledge through project report is an essential requirement for M.B.A students. The purpose of
this project report is to study “A STUDY ON THE ANALYSIS OF FINANCIAL ADVISORS
RESPONSES WITH REFERENCE TO INVESTMENT IN MUTUAL FUNDS”.

I have tried my level best to do justice to the project. And I hope the study which was conducted will help not
only the organization but also me and the society too.

Name and Signature of the student

 TABLE OF CONTENTS

CHAPTER NO. TOPIC PAGE NO.

01 INTRODUCTION

1.1 OVERVIEW OF INDUSTRY

1.2 PROFILE OF THE ORGANISATION
1.3 PROBLEMS OF THE INDUSTRY
1.4 COMPETITORS INFORMATION
1.5 SWOT ANALYSIS OF THE ORGANISATION
02 RESEARCH METHODOLOGY

2.1 STATEMENT OF PROBLEM

2.2 OBJECTIVES
2.3 MANAGERIAL USEFULNESS OF STUDY
2.4 TYPE OF RESEARCH AND RESEARCH DESIGN
2.5 DATA COLLECTION METHOD
2.6 LIMITATIONS OF STUDY
03 CONCEPTUAL DISCUSSION

3.1 REVIEW OF LITERATURE

3.2 CURRENT ISSUES

04 DATA ANALYSIS

4.1 METHOD AND TECHNIQUES OF DATA

ANALYSIS
05 MY CONTRIBUTION TO THE BODY OF
KNOWLEDGE

06 FINDINGS, CONCLUSION AND SUGGESTIONS

07 SUMMARY OF THE PROJECT

7.1 APPENDIX
7.2 BIBLIOGRAPHY
Chapter-1
Introduction
1.1 OVERVIEW OF INDUSTRY

The Indian financial system based on four basic components like Financial Market, Financial
Institutions, Financial Service, Financial Instruments. All play important role for smooth activities for
the transfer of the funds and allocation of the funds. The main aim of the Indian financial system is that
providing the efficiently services to the capital market. The Indian capital market has been increasing
tremendously during the second-generation reforms. The first-generation reforms started in 1991 the
concept of LPG. (Liberalization, privatization, Globalization).

The spared of the banking system has been a major factor in promoting financial intermediation in the
economy and in the growth of financial savings with progressive liberalization of economic policies,
there has been a rapid growth of capital market, money market and financial services industry including
merchant banking, leasing and venture capital, leasing, hire purchasing. Consistent with the growth of
financial sector and second generation reforms its need to fruition of the financial sector. It also needs
to providing the efficient service to the investor mostly if the investors are supply small amount, in that
point of view the mutual fund play vital for better service to the small investors. The main vision for
the analysis for this study is to scrutinize the performance of five star rated mutual funds, given the
weight of risk, return, and assets under management, net assets value, book value and price earnings
ratio.

A mutual fund is a professionally managed investment fund that pools money from many investors to
purchase securities. These investors may be retail or institutional in nature.

Mutual funds have advantages and disadvantages compared to direct investing in individual securities.
The primary advantages of mutual funds are that they provide economies of scale, a higher level of
diversification, they provide liquidity, and they are managed by professional investors. On the negative
side, investors in a mutual fund must pay various fees and expenses.

Primary structures of mutual funds include open-end funds, unit investment trust, and closed end
funds. Exchange traded funds (ETFs) are open-end funds or unit investment trusts that trade on an
exchange. Some close- ended funds also resemble exchange traded funds as they are traded on stock
exchanges to improve their liquidity. Mutual funds are also classified by their principal investments
as money market funds, bond or fixed income funds, stock or equity funds, hybrid funds or other. Funds
may also be categorized as index funds, which are passively managed funds that match the performance
of an index, or actively managed funds.
MUTUAL FUNDS COMPANIES IN INDIA

The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987
marked the existence of only one mutual fund company in India with Rs. 67bn assets under
management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the
80s decade, few other mutual fund companies in India took their position in mutual fund market.

The new entries of mutual fund companies in India were SBI Mutual Fund, Can bank Mutual Fund,
Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund.

The succeeding decade showed a new horizon in Indian mutual fund industry. By the end of 1993, the
total AUM of the industry was Rs. 470.04 bn. The private sector funds started penetrating the fund
families. In the same year the first Mutual Fund Regulations came into existence with re-registering all
mutual funds except UTI. The regulations were further given a revised shape in 1996.

Kothari Pioneer was the first private sector mutual fund company in India which has now merged with
Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up
to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India.

In 2003, the Unit Trust of India Act 1963 was repealed and was divided into 2 separate entities – the
UTI Mutual Fund, which is sponsored by Punjab National Bank, State Bank of India, Life Insurance
Corporation of India and Bank of Baroda and the second entity is the Specified Undertaking of the Unit
Trust of India. This bifurcation was effective from February 2003.

The Mutual Fund Industry in India has outsourced the work of servicing investors, to Registrar and
Transfer Agents (RTAs). These RTAs are Kary and CAMS, with CAMS covering almost 65% of asset
servicing. The only exception is Franklin Templeton Mutual Fund services, which has its own RTA set
up on an in-house basis. These RTAs have investor service centres which offer a wide range of services
such as KYC fulfilment formalities, financial transaction acceptance and processing, nomination
registration, non-financial changes, statement of accounts, transmission of units, etc.

AMCs have implemented various technological measures in order to enhance customer engagement
from various sectors of the society. Two programmes that have been introduced by AMCs are the
Investor Awareness Programme (IAP) and District Adoption Programme (DAP). These programmes
improve awareness in locations with limited penetration of mutual funds, regarding the assets and their
benefits.
1.2 PROFILE OF THE ORGANISATION

HISTORY

Started in 2003, NJ India Invest Pvt Ltd seeks to reach out to the common man and extend the
opportunity to create wealth through an empowered network of financial products distributors – the NJ
Wealth Partners. To its Partners, NJ Wealth provides a full service, comprehensive business platform
with end-to-end solutions critical for success in financial products distribution practice. With its
compelling set of offerings covering every area of distribution practice, NJ Wealth has managed to
successfully transform the lives of many small and big distributors.

To the common man, NJ Wealth offers a comprehensive wealth management platform with a wide
choice of financial and non-financial products. Backed by high levels of excellence in operational and
service standards, NJ Wealth offers customers of its Partners, with solutions that truly make a
difference.

Driven by the strong vision of 'Creating Wealth and Transforming Lives', NJ Wealth's constant
endeavour is to build on the ideas that are meaningful & effective in scaling business challenges,
seizing available opportunities and serving the interests of the customer.

The NJ Wealth family has grown steadily and today it has over 33,000+ NJ Wealth Partners, spread
across 95 branches in 19 states in India with over 25,00,000+ investors, and over INR 65,000+ crores
of mutual fund assets under advice. Irrespective of the numbers though, it is trust in us which fuels the
passion for creating solutions with excellence that touch many lives, day after day.
NJ Wealth – Financial Products Distributors Network has a strong lineage as a part of NJ Group. NJ
India Invest Pvt. Ltd. is today the flagship company of NJ Group, the journey of which began in 1994.
The idea then was to cater to the growing needs of customers in an evolving financial services industry.
Today, with nearly two decades of untiring efforts, NJ has not only managed to build a strong business,
but has also earned the trust and respect of various stakeholders in the industry. The financial products
distribution business of NJ Wealth Network, formerly known as NJ Funds Network, lies at the heart of
NJ Group.

Over the last few years, NJ Group has expanded into other businesses, and today it also has presence
in businesses of asset management, real estate, insurance broking, training & development and
technology. NJ Wealth leverages from opportunities and services offered by the group's other
businesses to seamlessly add more value to its customers. NJ Wealth also draws great inspiration from
the vision of NJ Group, which is to be leaders in all its businesses driven by customer satisfaction,
commitment to excellence and passion for continued value creation for all stakeholders.

VISION

NJ Wealth has the vision of Creating Wealth and Transforming Lives by bringing financial inclusion
and easy access to investment opportunities to the masses. Underlying the philosophy, is our conviction
in sound long-term, investment management principles with asset allocation at its core. As part of the
NJ Group, NJ Wealth also has a very strong philosophy towards strong corporate and self-governance.

MISSION

The team at NJ Wealth works with great energy and passion to keep the customer's interest supreme
by exceling in all areas of operations. NJ Wealth strives to earn and build upon the trust and respect of
its employees, customers, Partners, regulators, industry members and the community at large, by
following its vision and philosophy with ethics, commitment, rationale and focus.
OBJECTIVES

NJ believes that trust is key for sustainability of any business. As a part of the NJ Group, NJ Wealth
has a very strong philosophy of corporate and self-governance. We believe that we have great duty
towards to all our stakeholders – employees, customers and vendors to business partners, authorities,
and the community at large. NJ Wealth is committed to ensure that the interests of all stakeholders are
best served with true spirit of prudent, rationale and ethical business practices.

As a part of NJ Group, NJ Wealth has strong policy, process, systems-oriented culture and practices,
which collectively cover various aspects of governance. NJ Wealth is also committed to follow
appropriate due diligence, compliance and risk management practices in all its activities. It is
committed to provide its customers with the highest feasible quality of services. The customers are
requested to raise any complaint or grievance through the right channels communicated for quick
resolution.

FUNCTIONS

1. Strong lineage and commitment to the business

Since its birth in 1994, NJ Group has grown into a diversified business group in the last 21
years. The business of financial products distribution is the flagship business of the group and
it remains at the heart of NJ Group. The management and team at NJ share a very strong vision
for the business and are committed to further strengthen and expand. NJ Wealth also gets
complemented and benefited with the growing presence of NJ Group in other businesses.

2. Customer Centric Approach

The work culture of NJ Wealth is geared towards helping customers win with solutions covering
all critical areas of success. Be it NJ Wealth Partners or their customers, NJ's continuous focus
has been to design, deliver and enrich our value-proposition in areas of product & service
offerings, operational excellence, service quality, technology, governance and more. The
business and wealth management ideas and strategies propagated at NJ are also centred around
sound, proven principles that serve the best interests of the customers. With the continued trust
of our customers, we are confident to steadfastly maintain the course of building strong
customer relationships and experience.
3. Effective use of technology

At NJ we have constantly tried to see technology as an enabler to meaningfully deliver the most
critical and relevant needs first. With our rich experience, understanding and an in-house team
we have custom built our entire platform to match customer needs. Our integrated technology
setup covers a gamut of business areas including customer offerings like online desks to the
critical operations processes and all-important areas of business management. NJ also has
adapted global standards and best practices in information security, customer privacy and
network, infrastructure management. The effective use of technology has helped us to manage
the business growth and deliver solutions in a reliable, effective and secured fashion.

4. Controls through well-defined processes

NJ Wealth takes governance, compliance and risk management as equally important business
areas in addition to customer solutions and operational excellence. The culture at NJ has
evolved over the years to be strong policy, process and systems oriented. We have put strong
internal controls and monitoring mechanisms in place on one hand, while removed people
dependency and atomized processes on the other. We continue to evolve our controls and
processes to mitigate business risks, offer standard services, enhance productivity and improve
customer experience and satisfaction.

5. Access to multiple products, single window solutions

NJ provides easy access to a wide range of financial and non-financial products in diverse asset
classes. The products are available to the customers of NJ Partners. The product basket available
includes all mutual funds schemes; direct equity, ETFs, PMS and fixed income products like
banks, NCDs, Company Deposits, and real estate properties. In addition to products, NJ also
offers the services of Demat and Trading account with online and Call & Transact facility and
also mobile trading service in mutual funds. The product & service basket is enough to meet
the needs and build the entire portfolio for any retail, HNI or corporate client.
1.3 PROBLEMS OF THE INDUSTRY

GROWTH OF INDUSTRY

By the year 1970, the industry had 361 Funds with combined total assets of 47.6 billion dollars in 10.7
million shareholder’s account. However, from 1970 and on wards rising interest rates, stock market
stagnation, inflation and investors some other reservations about the profitability of Mutual Funds,
adversely affected the growth of mutual funds. Hence Mutual Funds realized the need to introduce new
types of Mutual Funds, which were in tune with changing requirements and interests of the investors.
The 1970’s saw a new kind of fund innovation; Funds with no sales commissions called “no load
“funds. The largest and most successful no load family of funds is the Vanguard Funds, created by
John Bogle in 1977.
In the series of new product, the First Money Market Mutual Fund (MMMF) e.g. The Reserve Fund”
was started in November 1971. This new concept signalled a dramatic change in Mutual Fund Industry.
Most importantly, it attracted new small and individual investors to mutual fund concept and sparked
a surge of creativity in the industry.

PLAYERS IN INDUSTRY

Top Asset management Companies in the industry are

1. ICICI Prudential Mutual Fund

2. HDFC Mutual Fund
3. Aditya Birla Sun Life Mutual Fund
4. Reliance Mutual Fund
5. SBI Mutual Fund
6. L&T Mutual Fund
7. Kotak Mahindra Mutual Fund
8. Franklin Templeton Mutual Fund
CONTRIBUTION IN GDP

India has among the lowest mutual fund investments to GDP ratios in the world at 7 per cent, offering
a vast untapped opportunity for MF houses, which can leverage technology to enhance reach.
MF investments accounted for only 3.4 per cent of total financial investments by individual investors,
including HNIs and retail, in 2018-19, said the report brought out jointly by consulting firm EY and
Cafe Mutual.
With over 2,100 MF schemes, regulator Sebi should focus on rationalising product offerings. There is
a need for deepening pension coverage in the country through mutual funds. Digital technology is
helping fund houses enhance distribution reach.

SIZE OF THE INDUSTRY

1.4 COMPETITORS INFORMATION

1.

Karvy Private Wealth is a private wealth management firm that offers advice on wealth
management and financial planning in India.

2.
JM Financial provides financial solutions and services in investment banking,
institutional equity sales, trading and other financial sectors.

3.
Share khan is an online portal for trading, investments and stock marketing.

4.

Kotak Mahindra is a banking and financial firm that offers deposit accounts, loans and
investment services.

5.

Motilal Oswal provides wealth management, retail broking and distribution,

institutional broking, asset management and investment banking services.
1.5 SWOT ANALYSIS OF THE ORGANISATION

Swot analysis is a tool auditing an organisation and its environments. It is the first stage of planning
and helps markets to focus on key issues. SWOT stands for Strength weakness opportunity and
threats.

Strength and weakness are internal factor. Opportunities and threats are external factors.

STRENGTH

 NJ India invest has given very good research support to his advisors.
 NJ India Invest has tied up with almost all AMC’s and with 16 insurance companies.
 NJ Funds over INR 15000+ Crores of mutual funds asset under advice.
WEAKNESS

 The first and foremost lacking element in the company is that the awareness about company is
very less in the market.
 NJ Funds is only dominant in mutual funds. They have also focussed on other financial
instrument.

OPPORTUNITIES

 They have very wide scope in financial market.

 NJ India Invest can utilize the dominant position. It has optimally used the huge network of
its partners.

THREATS

 Prudent pvt ltd

 Blue-chip pvt ltd
 Chapter-2

Research Methodology
2.1 STATEMENT OF PROBLEM

Analysis of Financial Advisors Responses with reference to investment in Mutual Funds.

2.2 OBJECTIVES

 To find out level of awareness of mutual funds among financial advisors.

 To find out how many investment advisors are interested in dealing of mutual funds.
 To find out how many investors are willing to work with NJ India.

SCOPE OF STUDY

The study of this research is limited and bounded only for NJ India Invest Pvt Ltd, NSP, New Delhi
location. Situation and process might vary at other location.

2.3 MANAGERIAL USEFULNESS OF STUDY

 Advisors knowledge about Mutual Funds.

 Advisors interest in getting knowledge of Mutual Funds.
 Advisors willingness to deal in Mutual Funds with NJ India.

2.4 TYPES OF RESEARCH AND RESEARCH DESIGN

A research design is a pattern or an outline of a research project’s working. It is a statement of only the
essential elements of a study, those that provide the basic guidelines for the details of the project. It
comprises a series of prior decision that taken together provide master plans for executing a research
project.

A research design serves as a bridge between what has been established i.e., the research objectives
and what is to be done, in conduct of the study to relish those objectives. If there were no research
design, the research would have only foggy notions as about what is to be done.
This report contains the following research process-

Survey and Exploratory Research

Exploratory research is a research conducted for a problem that has not been studied more clearly,
intended to establish priorities, develop operational definitions and improve the final research design.

Survey is defined as the process of conducting research using surveys that are sent to survey
respondents. The data collected from surveys is then statistically analysed to draw meaningful
research conclusions.

2.5 DATA COLLECTION METHOD

1. Primary Data

Primary Data has been collected through-

 Direct communication with the advisors.

 Questionnaire

2. Secondary Data

Secondary data includes information regarding present market scenario, Information regarding
Mutual Funds and competitors.

This information is collected by-

 Internet
 Magazines
 Newspapers
 Books
2.6 LIMITATIONS OF STUDY

 Properly convincing people to invest in Mutual Funds is challenging.

 The survey sample is not very large for analysis.
 The research is confined to a particular region.
 Results can’t represent the whole market.
 Chapter-3

Conceptual Discussion
3.1 REVIEW OF LITERATURE

Vidyashankar (1990), Agarwal (1992), Gupta (1992) Atmaramani (1996) and Jambodkar
(1996) have conducted extensive research regarding investor expectations, protection,
awareness and fund selection behavior. Few striking ones among the other studies are given
below.

Jambodekar (1996) conducted a study to assess the awareness of mutual funds among investors,
to identify the information sources influencing the buyer decision and the factors influencing
the choice of a particular fund. The study revealed that income schemes and open-ended
schemes are preferred over growth schemes and close-ended schemes during the prevalent
market conditions. Investors look for safety of principal, liquidity and capital appreciation in
order of importance; newspapers and magazines are the first source of information through
which investors get to know about mutual funds schemes and investor service is the major
differentiating factor in the selection of mutual funds.

Shanmugham (1990) examined the factors affecting investment decision and found that the
investors are high risk takers. The investors possessed adequate knowledge of government
regulations, monetary and fiscal policy.

Syama Sunder (1998) conducted a survey to get an insight into the mutual fund operations of private
institutions with special reference to Kothari Pioneer. The survey revealed that the awareness about
mutual funds concept was poor during that time in small cities like Vishakhapatnam.

Agents play a vital role in spreading the mutual funds culture; open-end schemes were much preferred.
Age and income are the two important determinants in the selection of fund; brand image and return
are their prime considerations.

Shankar (1996) points out that Indian investors do view mutual funds as commodity products
and to capture the market AMCs should follow the consumer product distribution model.

Alexander et al., (1996) reported that only 18.9 percent of respondents could provide an estimate
of expenses for their largest mutual funds holding. 57 percent stated that they did not know
what the expenses were even at the time they made the mutual funds purchase. This suggests
insensitivity to costs and many investors do not use funds costs as an evaluative criterion in
making investment decisions.
National Council of Applied Economic Research (NCEAR) (2000) „Urban Saving survey‟
noticed that irrespective of occupation followed, educational level and age attained, households
in each group thought saving for the future was desirable. It was found that desire to make
provision for emergencies were a very important motive for saving for old age. Securities and
Exchange Board of India (SEBI) and NCEAR (2000) „Survey of Indian Investors‟ had been
report that safety and liquidity were the primary considerations which determined the choice of
an asset.

Satish (2004) opined that investors from seven major cities in India had a preference for mutual
funds compared to banking and insurance products. Investors expected moderate return and
accepted moderate risk. 60 percent of investors preferred growth schemes. The image of AMC
acted as a major factor in the choice of schemes. Investors had the same level of confidence
towards shares and mutual funds.

Kannadhasan (2006) examined the factors that influence the retail investors‟ decision in
investing. The decision of the retail investors is based on various dependent variables viz.,
gender, age, marital status, educational level, income level, awareness, preference and risk
bearing capacity.

Shanmugham (2000) conducted a survey of 201 individual investors to study the information
sourcing by investors, their perception of various investment strategy dimensions and the factors
motivating investment decisions, and reported that, psychological and sociological factors
dominated economic factors in investment decisions.

There is evidence that women are more risk averse than men in general and this translates to
investing in less risky assets in their investment plans (Agnew, 2003). Differences in financial
literacy between men and women may also explain differences in their investment decisions.
Crosnan (2004) in the research work titled "Gender Differences by Preferences" have done an
exhaustive review of various studies on gender differences over a period of time. The authors
highlighted the differences in perception on the basis of gender. The paper explains that there
was vast difference as to how men or women perceive the areas of risk taking, social behavior
and competition behavior. The paper establishes that women take less risk than men. According
to the authors various factors that might be responsible for such a difference in preference may
be age, marital status, number of children and culture.

An internally commissioned study by the NSE shows that the knowledge and understanding of
financial products and services and their impact is important for investor’s selection decision
making process. Studies also found that investor expertise and knowledge is important to the
decision-making process for the purchase of financial products or services (Perry et. al., 2005).

With respect to marketing and distribution efforts of fund managers, according to Capon et. al.
(1996) marketing efforts and advertisements have a positive effect on subsequent flows. Jain et.
al. (2000) provides direct evidence of the effect of marketing on fund purchase. They examined
a sample of equity mutual funds that advertised in various magazines during the period 1994-
96 and documented that advertised funds attracted approximately 20 percent more money than
funds that did not advertise.

Chakarabarti et. al. (2000) stressed the importance of brand effect in determining the
competitive position of the asset management companies. Their study reveals that brand image
factor, influences investors perception and hence his fund or scheme selection.

Ranganathan (2006) studied fund selection behavior of individual investors towards mutual
funds. The study found along with the fund performance record, sponsor‟s expertise in
managing money, which is closely, followed by reputation of the sponsoring firm are the most
influencing factors in mutual funds selection.

Hussein (2006) identified the factors influencing the UAE investors‟ behaviour. Six factors
were found as the most influencing factors on the UAE. The most influencing factors include
corporate earnings, get rich quick and past performance of the stock.
Neo-classical economic theory tells us that investor are rational and that their behavior is driven
by wealth maximization and self-interest. However, as suggested by the somewhat mixed
empirical evidence presented above, there seem to be investors that consider other factors as
well when forming their investment decisions, i.e. social, moral and ethical concerns.

3.2 CURRENT ISSUES

Mutual fund (MF) investments are subject to market risks.” Well, that’s true. But if you make
an informed investment, you can easily say “Mutual Funds Sahi Hai” (mutual funds are the
right choice). As people understand more about this investment tool and its effectiveness in the
medium-to-long-term, the total Assets Under Management (AUM) of the mutual fund houses
keep expanding rapidly.
Indian MF industry’s AUM has increased from Rs. 4.17 trillion (4.17 lakh crore) in March 31,
2009 to Rs. 23.80 trillion (23.80 lakh crore) by March 31, 2019, more than 5 times in just 10
years. More and more investors have begun to keep their faith in mutual funds in the last four
and half years. During this period, the creation of folios (MF accounts) has increased steadily.

Currently, MF’s country-wide penetration stands close to a miniscule 5%. Therefore, enormous
scope of expansion is still there. On the other hand, some of the behemoths in the fintech
industry have started entering the MF landscape. A few fintech firms have also adopted the robo
advisory model for catering to the retail investors. Therefore, there is huge opportunity for the
entire MF industry to experience exponential growth in the coming years.

Three Key Trends in the Mutual Fund Industry

The mutual fund industry is expecting to witness the following major trends:

1. Mass Adoption
Fund houses are extremely optimistic about the industry’s future. Their expectations have got a
major boost after the AUM increased by Rs. 5.5 trillion (or Rs. 5.5 lakh crore) between March
2017 and March 2019. Paytm Money’s Whole-time Director Pravin Jadhav believes that there
would be mass adoption of MFs among Indian investors, thanks to increasing digitization as
well as lower minimum investment amount being promoted by platforms such as Paytm. Jadhav
also said that most of the investments (around 70%) come in the form of SIPs and from the age
group of 18-32 years, including the millennials. He believes lowering of the minimum
investment amount has helped in increasing the adoption rate among investors. Another trend
is start-ups like Kaleidofin, that have launched with the goal of providing financial inclusion to
the masses, including vegetable vendors and farm labour. Such platforms use technology to
provide wealth generation to low income groups, by facilitating small incremental investments
in MFs.

3. SIPs will Keep Increasing

Systematic investment plan (SIP) has emerged as the backbone of the MF industry. SIP inflows
increased by 158% (Rs. 3,122 crores to Rs. 8,055 crore) from April 2016 to March 2019.
Investonline.in’s founder Abhinav Angirish believes that the per capita income has increased
by 9.7% (CAGR) in the last 5 years and the pace is expected to continue in the coming future
too. Abhinav believes that this continued per capita growth will continue fueling SIPs and will
ultimately “do wonders for the mutual fund industry”.

4. Changes in Regulatory Environment

The total expense ratio of the funds has decreased, following a string of regulations. In fact,
there has also been a consequent fall in the revenues of the distributors as well as independent
financial advisors. Therefore, the distributors may refrain from pushing the MF products due to
lack of incentives (as the upfront commissions have been discontinued). There are high chances
of drying up of lump-sum investments. In fact, the volume of SIPs may not be sufficient enough
to compensate this shortfall. Some of the recent launches indicate that there might be a rise in
the strategy-based ETFs (Exchange Traded Funds). Also, the distributors may try to push the
insurance-cum-investment products for earning higher upfront commissions.
 Chapter-4

Data Analysis
While conducting survey, the following responses were recorded-

1. What are the products in your existing business?

a. life insurance b. general insurances

c. postal scheme d. others

No of Response %

Life Insurance 120 80

General Insurance 18 12

Postal schemes 3 2

Others 9 6

Percentage

2
6

12

80

Life Insurance General Insurance Postal Schemes Others

2. Do you know about Mutual Fund SIP 8th wonder of the world as a product for wealth creation of
customers?
a. Yes b. No
c. knows slightly

No of Response %
Yes 48 32
No 69 46
Know Slightly 33 22

Percentage

22
32

46

Yes No Know Slightly

.3 Do you know about revenue and commission in Mutual Fund and SIP business for advisors?
a. Yes b. No

c. know slightly

No of Response %
Yes 60 40
No 75 50
Would Like to Know 15 10
 Percentage

10

40

50

Yes No Would like to Know

4. Do you know the advantages of adding up Mutual Fund and SIP as a product along with your existing
product?

a. Yes b. No

c. Would like to know

No of Response %
Yes 18 12
No 48 32
Would Like to Know 84 56

Percentage

12

56 32

Yes No Would like to Know

5. Would you like to attend business opportunity program organized by NJ India Invest?

a. Yes b. No

c. Yes, but not now

No of Response %
Yes 54 36
No 78 52
Yes, but not now 18 12

Percentage

12

36

52

Yes No Yes but not now

6. Can we send representative from NJ India Invest for more information about Mutual Fund?

a. Yes b. No c) Yes but with an appointment

No of Response %
Yes 63 42
No 69 46
Yes but not now 18 12
 Percentage

12

42

46

Yes No Yes but with appointment

7. Have you cleared your AMFI exam?

a. Yes b. No

No of Response %
Yes 12 8
No 138 92

Yes

12

No of Response Percentage
8 If no, would you like to give the exam if adequate reading materials and training given?

a. Yes b. No

No of Response %
Yes 48 32
No 102 68

Yes

32

48

No of Response Percentage
 Chapter-5
My Contribution to the body of Knowledge
MY CONTRIBUTION

1. CONVINCING A FINANCIAL ADVISOR

Convincing a financial advisor to invest in mutual funds can be one of the most difficult task but once
done properly these are the advantages that it provides to the investor-

 Diversification
 Low Minimum Investment
 Professional Management
 Lower Cost
 Systematic Investment Plan
 Transparency
 Liquidity

2. WHY CHOOSE MUTUAL FUND OVER INDIVIDUAL STOCK

The most common advantages are that mutual funds offer diversification, convenience, and lower
costs. Many mutual funds like a sector funds offer investors the chance to buy into a specific industry,
or buy stocks with a specific growth strategy such as aggressive growth fund, or value investing in a
value fund.

Though investing in a mutual fund is certainly no guarantee that your investments will increase in value
over time, it's a way to avoid some of the complicated decision-making involved in investing in stocks.

Some investors find that buying a few shares of a mutual fund that meets their basic investment criteria
easier than finding out what the companies the fund invests in actually do, and if they are good quality
investments. They'd prefer to leave the research and decision-making up to someone else.
 Chapter-6

Findings, Conclusions and Suggestions

FINDINGS

 In Nsp, Delhi in the Age Group of 36-40 years were more in numbers. The second most
Investors were in the age group of 41-45 years and the least were in the age group of below 30
years.

 In Nsp, Delhi most of the Investors were Graduate or Post Graduate and below HSC there were
very few in numbers.

 About all the Respondents had a Saving A/c in Bank, 76% Invested in Fixed Deposits, only
60% Respondents invested in Mutual fund.

 Mostly Respondents preferred High Return while investment, the second most preferred Low
Risk then liquidity and the least preferred Trust

 Most of the Investors had invested in Reliance or UTI Mutual

Fund, ICICI Prudential has also good Brand Position among

investors, SBIMF places after ICICI Prudential according to the respondents.

CONCLUSIONS

Mutual fund industry in India is still in its adolescent`s stage. It has wide opportunities to advance.
With the entry of private player & foreign player, the sector seems poised for growth. With the interest
rates falling & people now becoming unwilling to save in bank, mutual fund can be a better option.
But people do not invest their hard-earned money into mutual funds. This is because of unawareness
about mutual funds & their benefits. This is the root cause of slow growth of mutual funds industry.
The three reasons for the restricted growth of mutual funds industry in India are:

 The mutual funds industry is working confined to the metros & larger cities of the country,
baring the large investment potential present in even smaller cities of the country
 The mutual fund products are seen to be reasonable complex to be understood by the common
middle-class person.
 Mutual funds are to be providing only the equity stokes. The investors are unaware of the fact
that they can also enrich the investor`s portfolio with debt scheme.

We see that all AMC`s firmly admit the fact that India is the most emerging market in Asia. If is as, it
means that people have purchased power & disposable income. If the mutual fund can influence these
buyers to invest in their funds then it would be benefits to both of them.

However, it must be said that even these difficult times, the mutual funds industry is continuing its
efforts to improve customer satisfaction as well as set new standards in areas such as transparency and
disclosure norms. Mutual fund benchmark indices have been devised for benchmarking the
performance of individual funds in the India mutual funds marketplace.

In order to improve the training process of mutual funds distribution, the association of mutual funds
in India (AMFI) has introduced the AMFI certification programme. The security & exchange Board of
India (SEBI) has made it. Mandatory to all distributor & agents of mutual funds to pass the AMFI
certification programme. The improvement of knowledge of distributors & agents will ultimately help
the investors to make informed investment.
SUGGESTIONS

 Most leads complain about its fees that is Rs. 8000. They said that it is too much amount to
complete AMFI exam and become NJ partner. I know it is nothing in spite of our company
gives them. Consideration can be made to reduce the fee to stop de motivating from taking our
services.

 NJ has almost 25% market stake of mutual fund advisor (almost 15,000 MF advisors are partner
of NJ. whereas total MF advisors are 75,000 in India.) but NJ is lacking somewhere in its
marketing. NJ needs to advertise its brand to gain the image of a mutual fund distributer in the
minds of insurance advisors who are more concern with RR and other mutual fund distributors.
 Chapter-7
Summary of the Project
SUMMARY

NJ India Invest Pvt Ltd is India’s largest mutual fund distributor. NJ Wealth offers a comprehensive
wealth management platform with a wide choice of financial and non-financial products. Backed by
high levels of excellence in operational and service standards, NJ Wealth offers customers of its
Partners, with solutions that truly make a difference. Driven by the strong vision of 'Creating Wealth
and Transforming Lives', NJ Wealth's constant endeavour is to build on the ideas that are meaningful
& effective in scaling business challenges, seizing available opportunities and serving the interests of
the customer.

Present project report is about the complete analysis of advisor’s response of investment in Mutual
Funds at NJ India Invest Pvt Ltd.

This report is carried out at NJ India Invest Pvt Ltd, Nsp, Delhi location. The company’s product basket
includes Mutual Funds, Capital Market, Portfolio Management Services, Fixed Income and Real
Estate.

At NJ Wealth there is a department called Sales and marketing. This departments main function was
to make financial advisors do business in mutual funds by the means of investing the client’s money in
the market. The department focuses on educating the financial advisors and their clients about the
current scenario of mutual fund market, new mutual funds and where and when to invest by arranging
the training seminars, partners meet and clients meet.

At NJ Wealth, my job role was to educate the financial advisors of the company about mutual funds
and make their clients invest into it through the online portal called E-Wealth. It enables the advisor to
invest client’s money directly into the market and customer can anytime redeem money that is invested.
It also eliminates a lot of paper work that was required before.

According to me, NJ lacks in its brand positioning and needs to advertise its brand to gain the image
of a mutual fund distributor in the eyes of financial advisors and other mutual fund distributor.
 Questionnaire

AWARENESS OF MUTUAL FUNDS AMONG

INSURANCE ADVISORS

Name: ------------------------- Age: -------------- Address: ----------------------------

Contact no: ---------------------------------- E-mail ID: -------------------------------

1. What are the products in your existing business?

a. life insurance b. general insurances

c. postal scheme d. others

2. Do you know about Mutual Fund SIP 8th wonder of the world as a product for wealth
creation of customers?

a. Yes b. No c. know slightly

3 Do you know about revenue and commission in Mutual Fund and SIP business for
advisors?

a. Yes b. No c. know slightly

4. Do you know the advantages of adding up Mutual Fund and SIP as a product along
with your existing product?

a. Yes b. No c. Would like to know

5. Would you like to attend business opportunity program organized by NJ India Invest?

a. Yes b. No c) Yes but not now

6. Can we send representative from NJ India Invest for more information about Mutual
Fund?

a. Yes b. No c) Yes but with an appointment

7. Have you cleared your AMFI exam?

a. Yes b. No

8 If no, would you like to give the exam if adequate reading materials and training
given?

a. Yes b. No

9. In future will you attend seminar arranged by NJ India to guide investors about MF?

a. Yes b. No

If No why? _______________________________________________

10. Would you like to work with NJ India Ltd for dealing in Mutual Fund?

a. Yes b. No

If no why? ________________________________________________
 ABBREVIATION

 MF- Mutual Fund

 AMC- Asset Management Company
 AUM- Asset Under Management
 AMFI- Association of Mutual Funds in India
 SIP- Systematic Investment Plan
 BIBLIOGRAPHY

 http://www.njwealth.in/njwealth/home.fin?cmdAction=loadAdvisors

 https://www.elkjournals.com/MasterAdmin/UploadFolder/MARKET%20CONCENTRATIO
N%20AND%20COMPETITION%20IN%20INDIAN%20MUTUAL%20FUND%20INDUST
RY/MARKET%20CONCENTRATION%20AND%20COMPETITION%20IN%20INDIAN%
20MUTUAL%20FUND%20INDUSTRY.pdf

 http://www.equityresearch.com/

 https://www.indiainfoline.com/

 https://www.amfiindia.com/

 https://www.moneycontrol.com/