A

Project Study Report

On

Wealth Management Sector

“An Analysis of Existing and Potential Market”
At

Submitted in partial fulfillment for the

Award of degree of
Master of Business Administration

Submitted By: - Supervision By

Monika Borana Mr. RamPrakash Sangwan
M.B.A. 4th SEM 2008-10 LECTURER

Submitted to:
RAJASTHAN TECHNICAL UNIVERSITY, KOTA

JIET

, MOGRA,

JODHPUR (RAJ.)
 JODHPUR INSTITUTE OF ENGG. AND TECH.
(An Autonomous Institute of Govt. of Rajasthan)

Preface

Theories are being developed, designed and stated on the groundwork of their practical
implementation and usage. Work experience seems to be the most effective and indispensable factor
of making an individual an adept. This is because one can not do without being exposed to varying
circumstances and possible consequences. Training not only develops individual skills and abilities
but also provides proficiency in work performance. The researcher has done research in India
Microfinance Industry, which constitutes an essential part of two years MBA program. . The
researcher selected the project study on the topic
“Microfinance as an emerging tool for financial inclusion & poverty alleviation
It was really a great opportunity getting practical insight of the market.

Initially we felt that classroom study was irrelevant and to useless in any concern’s working, but
gradually it was realized that all the basic fundamental concepts studied are linked in one or the other
ways to the organization. Further it could be said that theory and practical training are supplementary
to each other and help in drawing meaningful conclusion and it’s just a matter of modifying the
theory, so as to apply in to given practical solution.
We sincerely believe that there is no better place to learn the practical side of management studies

than the company itself.

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 Acknowledgement

It is my great pleasure to take this opportunity to acknowledge the contribution of number of

people who helped me in successful completing of this project.

Firstly I would like to express my heartily gratitude and sincere thanks to Prof.H.K.Bedi

(HOD,JIET-SETG) allowing me to do this project and gratefully acknowledge the contribution

by him without his support and valuable suggestion this project could not be successful.

I would also like to acknowledge the support of other company members who has helped me to
make this project.

(Monika Borana)

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 INDEX

No. Particulars Page No

1 Executive Summary

2 Objective & Scope of Project

3 Company Profile

4 Theoretical Background**

5 Projections

6 Bibliography

4
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

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  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

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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

 List Of Different Asset Class

 Fixed Deposits
 Merits and Demerits

 Interest rates on FDs

 Effective Return

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 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

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  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
 INVESTMENT PHILOSPHY
 Morgan Stanley

 INTRODUCTION

 PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSPHY

 Moti Lal Oswal

 INTRODUCTION

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  PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSOPHY

 Religare Wealth Management

 INTRODUCTION
 PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSOPHY

 Standard chartered

 INTRODUCTION

 PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE
 INVESTMENT PHILOSPHY

 Abn Amro Wealth Management

 INTRODUCTION

o PRODUCTS

 ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSPHY

 HSBC Financial Planning Services

 PRODUCTS

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  ASSET CLASSES USED

 ASSET SIZE

 INVESTMENT PHILOSOPHY

 Citi Bank

 INTRODUCTION
 PRODUCTS
 ASSET SIZE
 ASSET CLASSES USED
 INVESTMENT PHILSPOHY

 ICICI Wealth Management

 INTRODUCTION

 PRODUCTS
 ASSET CLASSES USED
 ASSET SIZE
 INVESTMENT PHILSPOHY

13. AXIS BANK & WEALTH MANAGEMENT

 Procedure for entertaining a client in AXIS BANK

 Coustmer Profiling at Axis Bank

 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

 Risk aversion of Indian customers
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15. MIDDLE EAST & WEALTH MANAGEMENT

16. WEALTH MANAGEMENT ON GLOBAL PRESPECTIVE

EXECUTIVE SUMMARY
Axis Bank Wealth Management provides discretionary wealth management service, in which wealth
managers give recommendations to customers and invest according to customer discretion. My
Project is the study of Wealth Management Sector, An Analysis Of Existing And Potential Market.

The study was conducted at the main branch of AXIS BANK, CP, and NEW
DELHI.

The project was of 6 weeks duration.

During the project I had taken the guidance of Wealth managers & staff to collect the data, & also
made use of Company’s various reports. The data collected were then compiled, tabulated and
analyzed.

Apart from objectives, some of the points which is considered in this topic to make project report
more comprehend are: -

1. What a customer expects from a wealth management service provider.

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2. Solution framework for wealth management.

3. Key Challenge Areas.

4. Core Elements of Wealth Management Services.

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.

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 COMPANY PROFILE

Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted jointly
by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU
insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company
Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd.
The Bank today is capitalized to the extent of Rs. 358.56 crores with the public holding (other than
promoters) at 57.60%.
The Bank’s Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
Presently, the Bank has a very wide network of more than 701 branch offices and Extension

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Counters. The Bank has a network of over 2854 ATMs providing 24 hrs a day banking convenience
to its customers. This is one of the largest ATM networks in the country.
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.

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 Theoretical Background

INTRODUCTION

The term Wealth management also now a days having very importance. So many Banking
companies are engaged in the 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 Banc assurance. Now a day Wealth Management has very craze in the
business world. In a survey it was found that India had 100,000 milliners day end of year 2006 is
now grow up by 21% from a year earlier (Asia pacific Wealth report).

Wealth management services area in financial sector has been witnessing more attention during last
couple of years. Cap Gemini Merrill Lynch Wealth Report 2007 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 HNWIs 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 affluent.
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”.

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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.

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
© Portfolio Management –Administration, Performance Evaluation and Analytics
(d) Strategy Review and Modification.

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18
Key Challenge Area

Wealth management firms face many challenges in formulating winning services offering meeting
the client needs. Some of 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:

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 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 profile / 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 affluent.
As per recently published Cap Gemini Merrill Lynch Wealth Report 2007, number of HNWIs
around the world and value of their assets has been continuously rising. Number of HNWIs globally
is estimated to be around 9.5 million in year 2006, an increase of over 8.35% over previous year.
HNWI wealth totals US$37.2 trillion, representing an increase of around 11.4% since 2005. As per
report, number of HNWIs in India is increasingly growing – at a rate higher than other region of
world. Number of HNWIs in India is estimated to be around 100,000 in year 2006 - an increase of
over 20.5% over previous year. Though, in absolute terms the above number appears pretty

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miniscule (if we compare that with the number of retail investors in India2), however, in terms of
value it really makes a really huge sum of serviceable investment3.
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. To
meet the client service expectations accurately, servicing model and framework has to be deeply
oriented with high level of client satisfaction. It is not a surprise that many of successful firms in
wealth management sector draw lessons from successful service leaders from hospitality,
entertainment and retailing industries, to learn the trick of enhanced client satisfaction.
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.

Core Elements of Wealth Management Services

In most basic sense, wealth management services involve fiduciary responsibilities in providing
professional investment advice and investment management services to Institutions, funds
(Pension/mutual/Hedge), corporations, trusts as well as HNWIs. In the present context of our
discussion, we would keep our focus limited to HNWIs.

Some of analogous terms used for wealth management could be considered as Portfolio
Management, Investment Management and many times Fund Management or Asset Management.

 Depending on the mandate of the services given to the Wealth Manager, wealth management
services could be Packaged at various levels
a) Advisory

Wealth manger’s role is limited to the extent of providing guidance on investment / financial
planning and tax advisory, based on client profile. Investment decisions are solely taken by
the client, as per his /her own judgment.

b) Investment Processing (transaction oriented)

Client engages wealth manager to execute specific transaction or set of transactions.
Investment planning, decision and further management remain vested with the client.

c) Custody, Safekeeping and Asset Servicing

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 Client is responsible for investment planning, decision and execution. Wealth manager is
entrusted with management, administration and oversight of investment process.

d) End-to-end Investment Lifecycle Management

Wealth manager owns the whole gamut of investment planning, decision, execution and
management, on behalf of the client. He is mandated to make financial planning, implement
investment decisions and manage the investment throughout its life .Wealth management

services comprises of following Key function areas :

a) Financial Planning
b) Portfolio Strategy Definition / Asset Allocation
c) Strategy Implementation
d) Portfolio Management
e) Strategy Review and Alignment

 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)

 Investment Objective

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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 trade-off 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
objectives.
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

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Debt variants. Return profile, risk sensitivity and co-relation of constituents within portfolio model
would help to determine the size (weight age) of each individual constituent in the portfolio.
c) Strategy Implementation

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 favorable price range.

d) Portfolio Management
Portfolio Administration
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.
e) 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

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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

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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

26
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.

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  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.

28
  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.
29
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: Pre-packaged 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 optionally 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.

30
 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

31
32
Wealth Management Practice Orientation Overview

Transactions:
 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 hands-on 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.

33
 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

34
 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
every thing is done by some WM professionals. So they can not 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.

35
 Consumer Point Of View :
Wealth Management

Technically, PMS can be defined as hybrid service provided by portfolio managers, which includes
customized 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

36
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.

37
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 provide by the “standard deviation” of returns, how much the return changes 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
38
8. Structured product
9. Gold
10.Currency

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

39
The rate of interest on FDs varies according to the maturity with longer deposits generally earning a
higher interest rate. Here are the interest rates offered by ICICI Bank on their FDs. 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, which means that you will be earning compound interest.

40
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.[1] The fund manager, also known as portfolio manager, invests and trades the fund’s

41
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. [2]

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 in kind transactions, ETFs are more efficient
than traditional mutual funds (which are continuously issuing and redeeming securities and, to effect

42
such transactions, continually buying and selling securities and maintaining liquidity positions) and
therefore tend to have loTheyr 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 the United States.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. The following ranges are used by Russell Indexes: [7]
 Russell Microcap Index - micro-cap ($54.8 - 539.5 million)
 Russell 2000 Index - small-cap ($182.6 million - 1.8 billion)
 Russell Midcap Index - mid-cap ($1.8 - 13.7 billion)
 Russell 1000 Index - large-cap ($1.8 - 386.9 billion)

Bond funds

Bond funds account for 18% of mutual fund asse 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 loTheyr returns, but have tax advantages and loTheyr 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 the United States. Money market funds
entail the least risk, as Well as loTheyr 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

43
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 such as TIAA-CREF, American Century Investments, Vanguard, and Fidelity 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 in the United States 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 profits. 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.

44
Latest Asset Under Management for all Mutual Fund houses, sales & redemption figures..

Amount in Rs. Crores

No. of
Mutual Fund Name Asset Under Management
Schemes*

As on Corpus As on Corpus Net inc/dec in corpus

ABN AMRO Mutual Fund 368 Jun 30, 2008 6,993.19 May 31, 2008 6,066.30

926.894

AIG Global Investment 54 Jun 30, 2008 3,206.23 May 31, 2008 4,138.86
Group Mutual Fund

-932.63

Benchmark Mutual Fund 12 Feb 29, 2008 4,954.72 Jan 31, 2008 5,611.00

-656.276

Birla Mutual Fund 348 Jun 30, 2008 37,446.00 May 31, 2008 41,426.64

-3980.64

BOB Mutual Fund 22 Jun 30, 2008 53.86 May 31, 2008 64.83

-10.968

Canara Robeco Mutual 59 Jun 30, 2008 3,913.65 May 30, 2008 4,122.37
Fund

-208.72

DBS Chola Mutual Fund 78 Jun 30, 2008 2,249.56 May 30, 2008 2,100.14

149.42

Deutsche Mutual Fund 199 Apr 30, 2008 12,740.00 Mar 31, 2008 11,996.00

744

DSP Merrill Lynch Mutual 226 Feb 29, 2008 19,940.40 Jan 31, 2008 19,136.00
Fund

804.396

45
Escorts Mutual Fund 38 Mar 31, 2008 173.42 Feb 29, 2008 146.93

26.491

39 May 31, 7,898.64 Apr 30, 2008 8,943.36

Fidelity Mutual Fund
2008

-1044.72

Franklin Templeton 241 Mar 31, 2008 25,621.97 Feb 29, 2008 29,424.58
Investments

-3802.607

HDFC Mutual Fund 397 Feb 29, 2008 46,291.97 Jan 31, 2008 43,762.70

2529.274

HSBC Mutual Fund 201 Jun 30, 2008 15,841.17 May 30, 2008 17,617.11

-1775.934

ICICI Prudential Mutual 442 May 31, 59,573.08 Apr 30, 2008 57,575.02
Fund 2008

1998.06

IDFC Mutual Fund 267 Jun 30, 2008 10,859.28 May 31, 2008 12,513.40

-1654.12

ING Mutual Fund 313 Mar 31, 2008 8,608.29 Feb 29, 2008 9,844.71

-1236.42

JM Financial Mutual Fund 191 Jun 30, 2008 10,361.38 May 30, 2008 11,988.98

-1627.605

JPMorgan Mutual Fund 16 Jun 30, 2008 2,351.51 May 31, 2008 2,660.46

-308.95

Kotak Mahindra Mutual 197 May 31, 21,580.62 Apr 30, 2008 21,228.96
Fund 2008

351.659

LIC Mutual Fund 93 Feb 29, 2008 15,103.00 Jan 31, 2008 13,387.40

1715.602

Lotus India Mutual Fund 226 Feb 29, 2008 9,763.88 Jan 31, 2008 10,057.10

-293.218

Mirae Asset Mutual Fund 36 Jun 30, 2008 2,373.25 May 30, 2008 2,433.48

-60.23

46
 Morgan Stanley Mutual 3 Jun 30, 2008 2,795.95 May 30, 2008 3,416.93
Fund

-620.98

PRINCIPAL Mutual Fund 160 Jun 30, 2008 12,450.17 May 31, 2008 15,708.01

-3257.84

Quantum Mutual Fund 7 Jun 30, 2008 63.05 May 30, 2008 65.71

-2.66

Reliance Mutual Fund 336 Feb 29, 2008 93,531.68 Jan 31, 2008 77,210.04

16321.638

Sahara Mutual Fund 43 Jun 30, 2008 173.66 May 31, 2008 180.64

-6.98

SBI Mutual Fund 181 Feb 29, 2008 29,492.97 Jan 31, 2008 27,581.54

1911.428

Sundaram Mutual Fund 233 Feb 29, 2008 14,356.00 Jan 31, 2008 13,285.04

1070.96

314 May 31, 24,478.45 Apr 30, 2008 24,121.86

Tata Mutual Fund
2008

356.585

Taurus Mutual Fund 16 Jun 30, 2008 260.69 May 30, 2008 319.22

-58.53

UTI Mutual Fund 319 Mar 31, 2008 48,347.60 Feb 29, 2008 52,464.71

-4117.114

* indicates currently in operation

MUTUAL FUND DATA FOR THE MONTH ENDED - MAY 31 , 2008

Amount in Rs. Crores

Category No. of new Sales Redemption Asset Under Management

47
 schemes launched
during the month

New Existing Total Total as on May as on Apr 30 Inflow/

schemes schemes 31 , 2008 , 2008 Outflow

B Bank Sponsored 0 0 63987 63987 56330 90719 86736 3983

C Institutions 4 1328 23914 25242 19680 18649 16136 2513

Private Sector & Joint Venture :

Indian 12 2832 145600 148432 154833 190170 172571 17599

Predominantly
8 1105 51912 53017 53263 73525 82697 -9172
Foreign
D
Predominantly
16 3979 123265 127244 126730 192744 180667 12077
Indian

Grand Total
40 9244 408678 417922 410836 565807 538807 27000
(B+C+D)

48
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.

49
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.

This article focuses on the history and current debates regarding global commodity markets. 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 of this article is the relationship between simple commodity money and the more
complex instruments offered in the commodity markets.

50
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 aesthethic 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.
51
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.

52
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

53
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 non-life 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
54
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 Theyre 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.

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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 well-established, 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
56
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.

57
58
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
analyse 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’ (such as the stock market crashes
of 1929 or 1987) through which the wealth of all market participants dwindles. In the currency
market eachloss 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.

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60
61
 Companies Providing Wealth Management Services

Kotak securities
INTRODUCTION
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.

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INVESTMENT PHILOSPHY

Our mission is to provide clients with wealth management services that result in a performance that
meets or exceeds their investment goals. Exposing our clients to undue risk is contrary to this
mission. We believe that the tools of Modern Portfolio Theory empower us with a methodology for
building superior investment portfolios. This has been tested in all types of market conditions for
decades and has consistently protected investor wealth from the perils of non-diversification.

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.

63
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.

INVESTMENT PHILOSPHY

we use a strict value-investment methodology. We believe this to be the best way to generate
consistently strong returns, whilst minimizing risks for our clients. Value Investing has outperformed
the stock markets consistently for more than 80 years. It is a very research-intensive discipline and
eschews future projections, focusing instead on what is the intrinsic value of a company today.

Wealth Management runs focused portfolios comprising 15-25 stocks. We are only interested in the
best value companies in the entire market. Our goal is to find companies that offer a substantial
‘Margin of Safety’, which both reduces the risk of losses, whilst allowing for superior returns.

64
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

65
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

Investment philosophy

We have established a disciplined and dynamic investment process that is rooted in the premise that
asset allocation and investment style diversification are the most critical determinants in achieving
consistent investment returns with acceptable levels of risk.

Our investment process is solid and consistent at its core, yet dynamic in its application. The
premise, as outlined above, remains constant. At the same time, we continually update its application
for the most current economic climate so as to keep our investment recommendations up-to-date and
relevant. Additionally, when applied to each client’s portfolio, the process accommodates that
client’s specific situation, time horizon, risk tolerance, and other factors so that the result is a truly
customized portfolio.

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Religare Wealth Management
INTRODUCTION
Wealth Spectrum

 Portfolio management

 Art Intiative

 Priority Client Equity Service

In The continuous endeavour 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

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  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 scrips which are poised to get a re-rating 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.
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 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.

Investment Philosophy

69
They believe that investors are better served by a disciplined investment approach, which combines
an understanding of the goals and objectives of the investor with a fine tuned strategy backed by
research.

 Stock specific selection procedure based on fundamental research for making sound
investment decisions.
 Focus on minimizing investment risk by following rigorous valuation disciplines.

 Capital preservation.

 Selling discipline and use of Derivatives to control volatility.

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Standard chartered

INTRODUCTION

Priority Banking – personalised Wealth management program at Standard Chartered Bank. It is their
endeav their 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

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  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.

INVESTMENT PHILOSPHY:

We have developed a different and more focused approach to wealth management. Understanding
that wealth means different things to different people, we believe that no one is better placed to help
you acquire wealth and grow it, use and enjoy it, protect it and pass it on.

72
Our appreciation that every investor is complex and different and can have complex needs, has led us
to our development of a highly innovative new approach that we call our investment philosophy. We
believe it radically improves the management of private client investments.

Our investment philosophy uses sophisticated profiling and portfolio construction techniques to aim
for investments that deliver market-leading performance in the way you want, because while
performance is key, it is performance that suits you that really matters. Performance that reflects
your attitudes and personality and gives you the confidence and reassurance to make decisions with
clarity and speed.

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 organised 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 sourrce 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.

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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

INSURANCE SERVICES: Being away from India doesn’t mean you have to compromise the
safety and security of your loved ones. In fact, your savings from your time overseas can easily be
channels to meet your family’s needs for today and in the future. ABN AMRO Insurance Services
brings to you an unrivalled combination of steady returns with minimum risk.

Your insurance plans will provide your family the added financial security in case of an unforeseen
exigency. These investment cum protection plans can help you create Wealth for funding your long
term needs like education and marriages of your children and creating your retirement corpus. They
offer you a world of choice in insurance that can be customized to meet your individual needs.

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

INVESTMENT PHILOSPHY

Our investment philosophy takes root in the belief that fundamental research as an investment
process yields returns and hence we lay emphasis on company specific research. The
underlying principles that help us formulate the investment process: Investments are made in
‘businesses‘? and not ‘companies‘?; the latter is just an avenue. Companies (within that
business) that can generate returns on capital in excess of their cost of capital over a business
cycle are preferred. Earnings growth of a company is the prime driver and over a period of
74
time the stock price of the company shall be a slave of the same. Hence, investments in stocks
are to be made at reasonable valuations. Own companies that can generate long-term,
sustainable earnings, managed by qualified professionals capable of executing a well conceived
strategic plan

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

PRODUCTS

 Signature Portfolio
 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.

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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.

INVESTMENT PHILOSOPHY

Need-based sales approach with innovation Our team works to suggest financial solutions based on
your risk appetite, profile and needs. Using customer insight, we have developed a financial planning
tool. It analyses and generates a comprehensive financial plan based on your existing financial
position, expected future cash flows, inflation and identified financial objectives. Our Relationship
Managers extensively use this tool to do financial planning for you taking into account your long-
term objectives and / or medium to short term requirements.
For consistent and uniform delivery of financial planning as per the defined customer need centric
process, there is a dedicated, independent Sales Quality team to conduct regular quality checks close
to the point-of-sale.
White-listed funds
The concept of white listed funds lies in the bank’s open architecture model, which lays emphasis on
meritocracy. We carefully look at various products available in the market and after thorough due
diligence select product providers / schemes which adequately correspond to the needs of our
customers. White listed funds are selected based on various proprietary models that are used for

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intense quantitative analysis. These funds help our clients build a long-term portfolio and in
achieving long-term financial goals.
Technology is a potent weapon
For consistency in the manner in which our Relationship Managers identify customer needs and
suggest suitable solutions, we extensively leverage technology to support our sales process. Our
indigenously developed systems like Wealth Management System, Financial Planning System and
Customer Relationship Management System have been built basis customer insights. We constantly
look at evolving these systems to address sales process requirements arising out of dynamically
changing market conditions and customer needs. We therefore treat technology as a vital ally in
executing our philosophy of customer need centricity in a structured and uniform fashion.
Sharing the knowledge
We frequently organise wealth management events and investment seminars, where you can interact
with investment experts and fund managers. This provides us a platform to know and understand the
market and economic developments and trends.

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.

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ASSET SIZE
Rs.530Cr.

INSURANCE 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.
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  An exclusive set of structured products like market linked products.

INVESTMENT PHILSPOHY

Citi bank is investing customers portfolio according to which stage of life they are :-

 Young adult
 Married and yet to have kids
 Parent with young kids.
 Parent with settled child.

And according to expenses they are thinking of :-

 Buying a house
 Going on a holiday
 Getting married
 Going abroad

ICICI Wealth Management

INTRODUCTION

In India ICICI bank is a very Well known banks 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

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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.

PRODUCTS

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. So, if you’re
looking beyond the stock market, you’ll find us there too!

Asset SIZE

Rs.1230 Cr.

INVESTMENT PHILOSPHY

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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.

Asset Size
Rs.181.20 Cr.

Procedure for entertaining a client in AXIS BANK

1. Any customer who has a portfolio having more than 30 lakhs can request for wealth
management services at any branch of Axis Bank.
2. After the request of customer the wealth management relationship manager will meet the
customer and make a view about his risk taking ability according to his current financial
position and future needs.

3. The customer has to fill a risk profiler form, details of which is interpreted in a software
called “mohar” by which the analyst will come to know the actual risk taking ability of
customer.

4. Documentation: - The customer has to make available the following documents to the
Bank :-a. Pan card Copy

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b. 8 Photographs

c. One Address Proof

5. The client has to open four accounts with the Axis Bank :-

a. Wealth Saving Account: - This account is used to park all the money of the customer
which must be 30 lakhs or more than that .

b. Demat Account: - This is used to park all the assets in electronic form of the customer

c. Trading Account: - This account is used to buy or purchase the asset in a electronic
way.

d. Wealth Account: - This account is opened in the mohar software to handle the
portfolio of the customer.

6. The whole 30 lakh or more is not invested in a lump sum but it is invested in trenches in a
period of 4 months.

7. The service provided by the Axis Bank is a Non- Discretionary type of service, in which the
decision of investing money is taken with customer recommendation.

8. All the transaction done for the customer either sell or purchase of the asset classes is done
fully electronically through “Mohar” software.

9.Charges: - 1% Annual Charges on equity portfolio + 0.75 % brokerage either sell or buy .

No charges on mutual fund portfolio .(Asset management Companies gives 2.5% commission to
Axis Bank on investing client money in their mutual fund. )

Asset management Companies charges 2.25 % only on purchase of mutual fund directly to the
customer without any involvement of the Axis Bank.

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Customer Profiling at Axis Bank

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.

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  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 vehicles.

 Biggest need is to save enough for a down payment for a house.

 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 :-

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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%)

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  Between 30-45 yrs: -

 General profile: -

 Married, usally 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.

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  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.

 Up to 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.

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  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’s 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.
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  Consolidate and continue with wealth creation

 Start de-risk king 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 venerability 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.

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  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, sally 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.

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 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 reduce 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.

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  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 withdrawals plans (reverse of SIP).

 Growth portion of portfolio should be reduced to maintain only enough amount.

 Silver health medi claim.

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WEALTH MANAGEMENT : INDIAN CONCERN

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Position of India in Wealth Management

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.

When They are watching the world wide increase in number of millionaires the facts collected by
Cap Gemini, 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).

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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.

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Asia :-INDIA,SRILANKA

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 WEALTH MANAGEMENT ON GLOBAL PRESPECTIVE

Wealth managers and private banks are anticipating unprecedented growth over the next three years,
according to the latest findings from PricewaterhouseCoopers 2007 Global Private Banking/Wealth
Management Survey, with chief executives predicting that, on average, their assets under
management will increase at a staggering rate of 30% per annum.

The survey, which captured the views of senior executives of 265 organizations within the global
private banking and wealth management industry, highlighted that markets in Asia Pacific and
Eastern Europe are expanding the fastest, as organizations rush to service the new wealth creators in
these regions. In Asia Pacific, CEOs expect their organizations’ assets under management to grow at
an annual rate of 34%. CEOs’ plans for growth include entry into these lucrative markets, including
by acquisition. Almost 90% of CEOs feel that there will be at least some, if not significant,
consolidation in the industry and more than 50% of CEOs plan to open operations in new countries
over the next two years to access new clients.

The survey reveals a period of exceptional opportunities for wealth managers. Buoyed by rising
global wealth, wealth managers everywhere are anticipating extremely high rates of profitable
growth that have not been seen during probably at any other time. The survey highlights that this is a
time when strategic choices have to be made by chief executives and finite resources have to be
focused on serving existing clients as well as supporting highly ambitious growth plans.

PricewaterhouseCoopers latest findings also revealed a real commitment among wealth managers to
increase ‘share of wallet’, compared to previous surveys. Share of wallet has emerged as the new key
performance indicator, globally as well as in emerging economies like India, as wealth managers
seek to become trusted advisers and gain new clients. Currently under 50% of wealth managers hold
more than 40% of their clients’ invest able wealth but over the next three years this proportion is
estimated to increase dramatically to almost 80% of wealth managers holding over 40% of a client’s
wealth.

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PROJECTIONS

After studying the overall concept of Wealth management we can say that it has various aspects
some are favorable and friendly for the economy and some are very dangerous for the economy.

According to World Wealth Report 08- Merrill Lynch, Cap Gemini:

The early months of 2008 revealed further complications to the conditions facing the global economy
at the end of 2007, heightening uncertainty among investors regarding the near-term global outlook.
Deepening credit market woes threaten growth prospects in key mature markets.
However, still-strong fundamentals in emerging markets are likely to sustain high levels of growth—
a divergence that will likely impact consumer and business segments and shape
policy choices. The balance between emerging market strength and mature market recovery is likely
to persist through 2008, with the short-term outlook subject to variability given that aspects of
potential risk may still be unknown.

By and large, the global economy has two distinctive obstacles to

overcome:
 Inhibitors to growth in mature markets.
 High risks of inflation in emerging markets.

These challenges will shape global HNWI growth prospects going forward.

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Given 2007 performances and taking into consideration recent developments in world markets, the
projection of global HNWI wealth will grow to US$59.1 trillion by 2012, advancing at a rate of 7.7%
per year.

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This projection is based on several factors:
Recent economic downturns in the United States have been shorter by historical comparison
attributed, in part, to increasingly effective monetary policy. Therefore, the current complications are
not expected to weigh on growth prospects as heavily as they may have in the past. Similarly,
research suggests that emerging markets’ recoveries have outpaced analysts expectations. Moreover,
as HNWI portfolios continue to grow more diversified over the long term, spread across international
boundaries and asset classes, their investments become increasingly mobile.
Thus, as growth in one region or market slows, HNWIs can move freely, reallocating their funds to
other areas, often more quickly than the troubled market itself can react and recover. Ultimately, this
evolution will make HNWI investments less vulnerable to market downturns.

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 BIBLOGRAPHY

1. Wealth Management July06 private banking poll-r8 report.

2. www.moneycontrol.com.

3. www.google.com.

4. ICICI Prudential Asset Management Report.

5. World Wealth Report 2008 - Merrill Lynch, Cap Gemini.

6. “Year-End Review of Markets & Finance,” The Wall Street Journal, January 2, 2008; Russia
Trading System, http://www.rts.ru/en, accessed April 2008.

7. The Economist Intelligence Unit, January 2008.

8. Investment Strategy - No.6 August 2006 Society General Asset Management.

9.Goldman Sachs Asia Pacific Report.

10. IBM Business Consul ting’s Wealth Management Report.

11. Axis Bank Reports.

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