A

Project Study Report

On

Training Undertaken at

CHOLAMANDALAM

Titled

"Overview of Indian Wealth Management Market"

Submitted in partial fulfilment for

The Award of degree of Bachelor of Business Administration

In Lieu of Paper 306

2010-2011
Under the supervision of Submitted by

Dr. Pawan Kumar Patodiya GAURI SONI

Asstt.Prof. BBA-III

BIYANI GIRLS COLLEGE

UNIVERSITY OF RAJASTHAN
JAIPUR
 CERTIFICATE

This is to certify that Ms. GAURI SONI student of BBA Part-3 of

Biyani Girls College, Jaipur has prepared her project report entitled
"Overview of Indian Wealth Management Market" under my
supervision.

She has prepared the project report on the basis of training received at
CHOLAMANDALAM for a period of 45 days.

To the best of my knowledge this is an original piece of work.

Date:

Dr. Pawan Kumar Patodiya

 ACKNOWLEDGEMENT
I have great pleasure in expressing my deep sense of gratitude to my
Institute Biyani Girls College, Jaipur and Cholamandalam for giving
me an opportunity to carry out my summer training as a part of BBA
program.

I hereby acknowledge the most important people whose help and

guidance helped me to get this report and the project on the whole
done successfully.

I am thankful to Mr. Sumit Nagpal (Regional Manager) for allowing

me to join as a summer trainee in their esteemed organization. I have
tried my level best to make this summer training successful and get a
deep knowledge about Wealth Management.

I also dedicate my warm thanks to my parents, staff members & my

friends who didn’t let me down rather inspired me all the time in
performing the best.

GAURI SONI
BBA-III
Biyani Girls College
 PREFACE

The wealth management industry is changing rapidly to meet the evolving

needs of the participants. This is one area where true financial services
convergence seems to be happening as trust and private banks, brokerage and
retirement planning focused companies are all trying to get a bigger slice of
action .Opportunities in new geographies and asset classes are driving a lot of in
the industry today. According to a new research conducted by Celent, a Boston
based financial research and consultancy firm, the Indian wealth management
industry is gearing up to meet expanding market opportunities. The report titled
"Overview of Indian Wealth Management Market" reveals that over the next
four-five years, the revenue from wealth management service is expected to
contribute to over one third(32-37 percent) of full-service financial institutions.

By 2017 disposable income is expected to grow from present 2 percent to 5

percent. The wealth management market currently registers a 30 percent plus
growth and is expected to touch $1 trillion by 2012.

This Project report has been a sincere effort on the study of this upcoming
sector in the Financial Industry, Cholamandalam being a premier in the industry
and proficient in the wealth management industry. The report concentrates on
the way of wealth management process and correct financial planning of an
individual and the entire business cycle of wealth management in
Cholamandalam.
OBJECTIVES OF STUDY

• To Study the aspects of wealth management.

• To analyze the evolution and growth of wealth management market in

India.

• To derive the potentiality and the future prospect of the wealth

management industry in India.

• To analyze the investment behavior and risk appetite of HNI clients in

Delhi.
SCOPE OF STUDY

This report provides a holistic and top-down view on the current situation of
financial market and the role of Cholamandalam in building the industry. I
would be analyzing the aspects of wealth management and analysis of
investment behavior of HNI clients in Delhi .As study has been done only in
Delhi it may vary in different cities and study has been done in Cholamandalam
wealth management division , there is a probability that business cycle of
wealth management would be different in other companies.
METHOD OF DATA COLLECTION

All the techniques and process of doing wealth management is studied in

Cholamandalam :

Primary Source :

• Risk Appetite and investment behavior of HNI clients of Delhi is studied

through Marketing research .

Secondary Source:

• Collection of data from reports published by various national and

international journals on wealth Management.

• RBI and SEBI rules and regulation and their reports on the subject.
LIMITATIONS OF THE STUDY

Since the study is done only in Delhi, these results cannot be generalized.
Investors also tend to hide some facts and figures due to some reasons which
can hinder the results we get from this survey.

Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with
accuracy.
THE CONCEPT OF WEALTH MANAGEMENT

Wealth usually refers to money and property or something which has economic
value attached to it. It is the abundance of objects of value and also the state of
having accumulated these objects. The concept of wealth management refers to
management of both the sources and the facets of various forms of both tangible
and non-tangible wealth. India has become a highly potential market for wealth
management because wealth managers, both domestic and international, are
able to establish the beginnings of a market with few obstacles, relative to the
other emerging markets, where there are regulatory restrictions, these are less
problematic than those in Chinaor the Middle East.

“WEALTH MANAGEMENT is a service provided by financial institutions to help

high net worth individuals protect and grow their wealth. This advanced
investment advisory discipline involves providing a diverse range of services,
such as financial planning ,investment management, tax planning and cash flow
and debt management, based on client requirements.”

There are Two aspects to the wealth management process:-

• Protecting assets from creditors, market crashes or slowdowns, taxes,

lawsuits and other unexpected events

• Growing asset values through methods that actively manage risk and
reward profiles to clients needs.

Wealth Management is an advanced investment advisory discipline that

incorporates Financial Planning and Specialist Financial Services.
WEALTH MANAGEMENT SERVICES

Wealth management offers the following services:

Investment planning: Assists investor in investing money into various

investment markets, keeping in mind investment goals and risk appetite.

Insurance planning: Assists in selecting from various types of insurances, self

insurance options and captive insurance companies.

Retirement planning: This is one of the important service as it is critical to

understand how much funds you require in your old age.

Asset protection: Begins with financial advisor trying to understand preferred

lifestyle and then helping an investor to deal with threats, such as taxes,
volatility, inflation, creditors and law suits, to maintaining this lifestyle.

Tax planning: helps in minimizing tax returns. This might include planning for
charity, supporting your favorite causes while also receiving tax benefits.

Estate planning: helps in protecting you and your estate from creditors,
lawsuits and taxes. This service is critical for every person whose net worth is
high.

Business planning: This service aims at optimizing the tax free advantages of
running your own business.

Business succession planning: assists in planning for the inevitable to

maximize returns.

Wealth transfer: helps you pass on your wealth to your dependents.

BENEFITS OF WEALTH MANAGEMENT

Wealth management helps in:

• Reducing taxes associated with income, capital gains and estate.

• Protecting assets from misjudgments and creditors.

• Improving yields with more diversification and less risk.

• Managing liabilities such as mortgages and college funding

LITERATURE REVIEW
STATE OF WEALTH MANAGEMENT INDUSTRY GLOBALLY

Global high net worth wealth totals around $37 trillion, and is expected to reach
$51.6 trillion by 2011, growing at an annual rate of6.8% a year according to the
2009 Merrill Lynch/Capgemini World Wealth Report.

• Merrill Lynch Global Wealth Management and Capgemini's 14th World

Wealth Report revealed that high net worth individuals (HNWI) -defined
as those with more than $1 million(£673,000) of disposable assets -had
recouped most of the money lost in the previous year when the global
downturn took its toll on their portfolios.

• HNWI wealth had declined by $7.9 trillion in 2008 but last year(2009)
climbed $6.2 billion according to the report which also showed that the
world's population of HNWIs had increased to 10 million from 8.6 million
last year(2009), bringing it close to the 10.1 million level of 2007.

• At the end of 2008, the world’s population of HIGH NETWORTH

INDIVIDUALS (HNWIs) was down 14.9% from the year before, while
their wealth had dropped 19.5%.The unprecedented declines wiped out
two robust years of growthin2006 and 2007, reducing both the HNWI
population and its wealth to below levels seen at the close of 2005.

• Ultra-HNWIs suffered more extensive losses in financial wealth than the

HNWI population as a whole. The Ultra-HNWI population fell 24.6%, as
the group’s wealth dropped 23.9%, pushing many down into the ‘mid-tier
millionaire’3 pool.
• The financial crisis and economic uncertainty of 2008 clearly had an
impact on HNWI investments of passion and lifestyle spending, with
luxury goods makers, auction houses, and high-end service providers
reporting significantly reduced demand worldwide. The cost of luxury
items also rose.

• By 2013, it is forecasted that global HNWI financial wealth to recover to

$48.5 trillion, after advancing at a sustained annual rate of 8.1%. By
2013, it is expected that Asia-Pacific to overtake North America as the
largest region for HNWI financial wealth.

• HNWIs are defined as those having invest able assets of US$1 million or
more, excluding primary residence, collectibles, consumables, and
consumer durables.

• Ultra-HNWIs are defined as those having invest able assets of US$30

million or more, excluding primary residence, collectibles, consumables,
and consumer durables.

• More than a quarter of HNWI clients surveyed withdrew assets from

their wealth management firm or left that firm altogether in
2008, primarily due to a loss of trust and confidence.

• Firms need to be client-focused . 88% of surveyed HNWI clients

said SERVICE QUALITY was a “very important” reason for staying
with their wealth management firm in 2008, and 87% of Advisors
anticipated that would be the case.
• World GDP did manage to produce some growth in 2008 (2.0%),but it
was down from 3.9% in 2007 and 4.0% in 2006. GDP in G7economies
deteriorated progressively as the crisis unfolded, and ended the year
showing growth of just 0.6%.

• BRIC (Brazil, Russia, India, China)nations continued to out pace many

economies, led by China, despite the steep slowdown in the fourth
quarter.

• HNWIs reduced their exposure to equities across the globe in 2008, but
allocated more to fixed-income instruments. By year- end 2008, equities
accounted for 25% of total global HNWI financial assets, down from
33% a year earlier, and fixed-income accounted for 29%, up from 27% a
year earlier.

• HNWIs kept far more cash/deposits in 2008—of global HNWI financial

assets, 21% was in cash-based holdings at the end of 2008, up 7
percentage points from pre-crisis levels in 2006.

• HNWIs are expected to remain fairly conservative investors in the short

term, with capital preservation being a priority over the pursuit of high
returns. Looking toward 2010, though, the profile of HNWI portfolios is
likely to shift as economic conditions improve, instigating a tentative
return to equities and alternative investments as HNWIs regain their
appetite for risk.
STATE OF WEALTH MANAGEMENT INDUSTRY IN INDIA
“While Maharashtra is home to the largest number of affluent individuals of
any state in India and also the fastest growing affluent population, it is Delhi
that has by far the highest proportion of affluent individuals”

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(2009),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.

Wealth management is just emerging in India. The growth of the economy has
already been widely show cased. Wealth management services have been
getting more attention over the last two years. Abooming economy, rising stock
prices and an increase in salaries and spending power have turned the spotlight
on this sector. The wealth management space was earlier the preserve of some
foreign banks which offered these "exclusive services" to a select few. This was
not a service you could apply for.

The unsaid tagline was "Don't call us. We'll call you (if you are that
wealthy!)." Today, a number of private banks and distribution houses offer this
service. Also entering this arena and carving a niche for themselves are
standalone entities that offer the full range of services - investment advice,
portfolio management, taxation advice.
According to Celent, with large segments of the population showing interest in
financial products and service lines, growth and buoyancy across sectors are
boosting the financial service industry of India. There port estimated an
addition of 500 million people to the working class in the next decade, with the
young population enjoying increase in income levels. These will lead to
increased investments in the core processing platforms as well as the need to tie
the various platforms together .

The wealth management service providers have segmented Indian market into
four categories, namely:-

• The Mass market (investible surplus $5,000 to $25,000)

• The Mass affluent ($25,000 to $1 million)

• The High net worth (HNW $1 million to $30 million) and

• The Ultra-high net worth (ultra-HNW greater than $30 million).

The lower rung of this pyramid is currently clocking tremendous growth at 30

percent for mass affluent and 27 percent for mass market and will continue the
same phase says the report. The wealth management market currently registers
a 30 percent plus growth and is expected to touch $1 trillion by 2012.
• The latest Wealth Report 2010 Attitudes Survey has forecast that real
estate sector in India is likely to witness fluctuations with prices of prime
properties in India forecast to be zooming northwards by 12-15 per cent
in 2010 on one hand and demographics change supporting demand on the
other.

• With the number of high net worth investors (HNWIs) in India growing
at 20 per cent a year, second only to Singapore and the huge community
of wealthy non-resident Indians living overseas—keen in investing back
home—the Mumbai and New Delhi realty markets now hold a significant
level of promise for these potential investors, as per Pranab Datta, vice-
chairman and MD, Knight Frank India.

• India's FY10,nominal GDP is estimated at US$1.3 trillion.

Assuming12.4% annual growth (7% real and 5% inflation), India's GDP
inFY15 works out to US$2.3 trillion i.e. addition of US$1 trillion in the
next 5 years.

• India is growing at a fast pace and according to Live Mint Report India's
economy between the year '2007 and 2050' is likely to come in at 8.5%
CAGR, significantly higher than China's 6.8% .

• India is going to be one of the powerful nations of the world as far as

human resource and technological wise...Not just this, India will also
going to be powerful economically. The power of economy can put India
one among the top ten developed nations.
COMPANY OVERVIEW

“CHOLAMANDALAM DISTRIBUTION COMPANY“

The Company, was incorporated on August 17, 1978, as a public limited

company under the name of “Cholamandalam Investment and Finance
Limited”. Cholamandalam Financial Services Group is a pan-Indian, composite
financial services provider. It comprises the parent company, Cholamandalam
Finance Limited (CFL), and its subsidiaries and associates Cholamandalam
Distribution Limited, Cholamandalam Asset Management Company Limited
and Cholamandalam Securities Limited. The shares of CFL are listed in the
Mumbai(BSE) and National(NSE) Stock Exchange.

In 1993-94 Cholamandalam Investment and Finance Company ventured into

vehicle finance operations. It has since then continuously augmented its product
range and geographical presence. They have a total asset base of Rs. 17,000
crores as on March 31, 2010(including assets securitized and assigned) out of
that Cholamandalam has around 1700 crores. They were registered as a deposit
taking NBFC, and in December 2006 it converted into a non-deposit taking
NBFC. They currently enjoy LAA rating for debentures and subordinated debt
programme, MAA+ rating for fixed deposits and A1+rating for Short Term debt
programme from ICRA; AA rating for fixed deposits and P1+ rating for short
term debt programme from CRISIL and AA (Ind) rating for subordinated debt
programme from FITCH .
Cholamandalam Finance is apart of giant Murugappa Group of Companies,
which has 28 companies, like Parryware , Tube India etc., leading in their
industries. The major companies of the Group are:

• Carborundum Universal Limited

• Cholamandalam Finance Limited
• Cholamandalam MS General Insurance
• Coromandel Fertilizers Limited
• EID Parry India Limited
• Tube Investments of India Limited
• Parry Agro Industries Limited

The Group has forged strong joint venture alliances with leading international
companies like DBS Bank, Mitsui Sumitomo, Cargill, Roca and Group
Chimique Tunisien has consolidated its status as one of the fastest growing
diversified business houses in India.

Cholamandalam was a venture between Development Bank Of Singapore,

(DBS) and Cholamandalam Finance of Murugappa Group India. On 30
March.2010 Cholamandalam acquired its stake back from DBS. DBS sold its
37.5 percent stake in Cholamandalam DBS Finance in a deal worth 3.76 billion
rupees. The deal price of 91 rupees ($2) for each Cholamandalam DBS share
with a premium of 1.2 percent was agreed.

L&T had bought 100% stake in Cholamandalam Asset Management Ltd. on

29,Sept 2009 for 45 crores.
Cholamandalam Distribution Limited (CDL) is in the business of distribution of
a wide array of financial services products – both in-house and third party – to
high net worth and retail client. Products offered include mutual funds, fixed
income, share trading, savings instruments, capital bonds, IT/PAN processing
services, equity IPOs and life and general insurance.

Wealth management practices have been started in the company, with a brand
name of a giant venture. The company has steered two separate departments for
marketing. One in Retail, who take cares of the budding millionaires of India,
and other the Private Client Group(referred as PCG) which handles the big wig
individuals under its Wealth Management Department. India is growing so does
the individuals of the country, with better financial planning and good
investment techniques the goals of all the individual can be achieved in a better
professionalized manner. This is the belief of the company which has always
been referred as the most trust worthy company in the industry.

“Club Chola” is the Private client group of DCDL that offers personalized
investments advisory services to address clients’ financial needs holistically
through a wide variety of products, asset classes and service offerings, backed
by strong in – house research.

Its Closest Competitors are DSP Black rock, Citi Bank , Standard Chartered
,HSBC , India infoline , Bajaj capital and Birla Sunlife Distribution and in
wealth management its closest competitor is Bajaj Capital.
PRODUCTS & SERVICES OF CHOLAMANDALAM

Cholamandalam provides with new investment opportunities and investment

advice which allows an individual to choose from a broad spectrum of products
and services. With Cholamandalam Wealth Management one can be rest
assured will have access to the most viable wealth management products and
solutions.

Various Products offered are :-

Direct Equity :

• An Investor can enjoy convenient, simple and efficient trading in Indian

equities that is offered by Cholamandalam. They provide a seamless
platform to invest in the Indian secondary markets. Chola’s wealth
management advisor provide valuable advice based on in-house research.

Structured Products:

• Cholamandalam offer customized investment solutions to access various

asset classes. Most structures will offer principal protection with returns
based on performance of an associated asset class. Based on invest or
preference, returns can be linked to a variety of asset types such as equity
indices, basket of stocks.
Real Estate

• Chola offers niche property investment services. They bring in a

combination of in-depth market knowledge and real estate industry
experience to offer a range of specialized real estate investment services.
According to the analysis of the needs and objectives of the investor, they
provide expert advice and innovative real estate solutions to their clients.
They are partnered with JLLM (Jones Lang LaSalle Meghraj) .It is a
financial and professional service firm specializing in real estate services.

Gold

• A healthy portfolio is about the diversification and management of risk.

Holding gold in a portfolio can provide distinct benefits, its most
valuable contribution to a portfolio lies in the fact that it is not correlated
with most other assets. Chola offers multiple avenues of investing in gold
so that investor can benefit from effective portfolio diversification .Here
Gold is traded through Exchange Traded Fund.

Life Insurance

• While offering solutions for building and preserving capital,

Cholamandalam also offers comprehensive advice on how best to protect
yourself and your family against all the most serious risks that you face.
They have tie up with TATA-AIG Life Insurance that provides the
 opportunity to obtain more favorable offers, which can result in lower
costs and greater benefits. TATA – AIG IA GOLD Product is the hot
cake for Cholamandalam in terms of clients.

MF PMS ( Mutual Fund -Portfolio Management Service ):

• MF PMS offer investors a unique and excellent investment proposition.

They invest in the schemes of best performing mutual funds .While
mutual funds invest in promising stocks of sound companies, MF PMS
invests in the best schemes of various mutual funds .Best of the best fund
managers working to maximize your wealth Hassle-free, tension-free,
selection and management of Mutual Fund Portfolio.

Chola’s Three in-house products are :-

• Discretionary Portfolio Management Services –SIGMA

• Non-discretionary Portfolio Management Services –EASE

• Transaction based Service Offering – EZ Invest

VARIOUS SERVICES OFFERED ARE:

Research

• Chola provides quality research to their clients with the information they
need to make informed investment decisions. The Cholamandalam
Wealth Management Research team is dedicated to keep invest or
updated with an access to various publications and to a wide range of
research tools including market depth, breaking commentary, long-term
forecasts to detailed daily updates and the latest financial news.

Highly proactive services

• They deliver a fast, effective and friendly service that often exceeds
client's expectations. The service includes daily Market Update, Weekly
Update on MF, Event Based SMS, investor will be kept fully informed
on the markets.

Financial planning

• To complement Cholamandalam investment strategy they offer

comprehensive financial planning. This planning session is followed by a
complimentary personalized report containing specific recommendations
on the actions needed to take to achieve financial goals.
Regular Portfolio Reviews

• Periodic reviews to ensure the integrity of the portfolio and continued

viability of assets within the portfolio. Chola believe in diversification
and are committed to providing a sound and conservative
investment acumen.
SWOT ANALYSIS OF CHOLAMANDALAM

STRENGTH WEAKNESS
 Wide Product Range.  Do not focus on advertisements.

 Strong Client Base at Delhi.  Brand name not established

other than sour.

 PAN INDIA Presence.  Brand Positioning not done

properly.

 Well defined business model

 Entire process is in-housed with

experienced man power.

 Strong management in the core

business & execution.

 Market Led Company

 Part of Murugappa Group worth

having 13500 crores.

 Low charges as compared to

other distribution houses.

 OPPORTUNITIES THREATS
 HNI population is growing  Increasing Competition.
rapidly at a faster pace so huge
market potential.

 Concept Financial planning is  Regulatory changes by SEBI

developing in India. has led to erosion of margins.

 Power of Equity Unmatched,  Local Market players playing a

has outperformed all other Asset spoil sport.
Classes.

 Equity forms only 10% of the

total Portfolio of the investors.
BUSINESS CYCLE OF WEALTH MANAGEMENT IN
CHOLAMANDALAM

The business cycle of Wealth management starts from targeting the HNI
Clients. There is CAT team (Client Acquisition Team) in Chola which focuses
on acquiring clients.

Following is the Procedure Of CAT to acquire clients :-

 Search HNI Clients:-

1. Through various Database like of Airtel , Kotak etc.

2. Through Phone directories.
3. Through Club Memberships
4. Through Locality
5. Through References.
6. Cold Calling
7. Events

 Then Mailers are send to clients regarding the Cholamandalam before

first call to client. There is reason for not calling first as clients are given
reference regarding first mail.

 Then Clients are given first call. And meeting is fixed.

 On 1st meeting , there’s a mantra that let client have more interaction

with RM ( Relationship Manager ) and try to know what is the past

 investments and its behavior, risk appetite and return expectation of the
client through filling OF RAPP(Risk Analysis and Portfolio Planer).
Then either Restructuring of Portfolio is done or New Product is pitched
in 2nd meeting according to the need of the client and is presented to the
client.

Following Points are considered while Portfolio Creation :-

1. Investment Objective
2. Return Expectation
3. Risk Appetite
4. Time Horizon
5. Total Corpus
6. Liquidity
7. Current Investment
8. Insurance (if any)

Then starts the Wealth management Back Office Process , it entails the
following :-

After Meeting fixation and Client Pitching -

 Utilizing client feedback and personal network to develop

intelligence.

 Then Coordinating with all AMC’s.

  Keep the track of portfolios of the clients on Portfolio MF Online

tracker .Their Client wise details are prepared.

 Prepare comprehensive financial reports and proposals for senior

management to review revenue generation on Telesto Software.

 Handling complete branch operations.

 And then from time to time Active Review & Monitoring is done
HOW CHOLAMANDALAMRECOMMENDS PRODUCTS TO
ITS CLIENTS

• To analyze the risk appetite and return expectation and goals of the
investor, RAPP FORM (RISK ANALYSIS AND PORTFOLIO
PLANNER)is get filled by the clients.

• Then RAPP Form is send to Chennai Head Office where research team is
based to judge the client’s risk appetite. Research team has divided the
client into 3 category’s :-

 Tortoise ( Conservative Client)

 Elephant ( Moderately Aggressive )

 Cheetah (Highly Aggressive )

• After 3-4 days they send their feedback to Delhi office.

• If the client comes under Tortoise Category they are suggested Debt
Funds, Capital Protection funds, FD’s (Fixed Deposit) and if client is
above 60 yrs (retired) they are suggested MIP’s (Monthly Income Plans).

• If the client comes under Elephant Category they are suggested Balanced
Funds, Large Cap Equity Funds and stocks of Blue Chip Companies and
SIP(Systematic Investment Plan )and Gold too.
• If the client comes under Cheetah Category they are suggested Small and
Midcap funds , Real estate funds, Stocks of Small and Midcap
Companies.

• The information regarding in which sector/funds/stocks to invest are

based on the research which is carried out by the research team.

• I also did some of the research work that gave an idea about the rolling
returns of different indices , analysis of various mutual funds.

• This research work is useful to the Relationship Manager while pitching

a product to the client.
MUTUAL FUND ANALYSIS

• A mutual fund is a collective investment vehicle formed with the specific

objective of raising money from a large number of individuals and
investing it according to a pre specified objective .

• Mutual Fund is a trust that pools the savings of a number of investors

who share a common financial goal. The fund manager in different types
of securities then invests the money thus collected. These could range
from shares to debentures to money market instruments, depending on
the scheme’s stated objectives.

• Mutual funds can be classified in different ways according to there

investments objectives, their constitution, etc. and are as follows :-

 Equity Funds: These are funds that invest solely in equity shares

of various companies. Since equities as an asset class fluctuates

widely, the net asset value of these funds is also subject to these
fluctuations. Hence, these funds are the riskiest.

 Debt /Income Funds : These are funds that invest solely in

income bearing instruments like bonds , debentures , government

securities , commercial papers etc . Income bearing instruments are
much less volatile , though they do carry credit risk.

 Balanced funds : These are funds that invest both in equity shares

and income bearing instruments . The idea is to reduce the

 volatility of the funds while providing some upside for capital
appreciation

 Liquid Funds /money market funds: These are funds that invest

in highly liquid money market instruments. They have emerged as

an alternative savings and short term fixed deposits accounts.

 Sector Funds : These are funds investing in a particular business

sector or industry like the Tata Infrastructure Fund, Pharma and

FMCG funds which invest in shares of companies in
their respective sector

 Index Funds : This is a large class of equity mutual funds, that

invest in the popular market indices e.g. S&P 500, NASDAQ

composite etc This concept is referred to as passive investing
wherein the investor wants to invest in a particular asset class but
does want any fund manager to choose specific investments.
MARKETING RESEARCH

OBJECTIVE:

• To determine the Investment behavior and Risk Appetite Of HNI Clients.

SAMPLE DESIGN

Sample Element:

• Shops Of Khan Market and Greater Kailash-I(GK) M-Block Market,

Delhi.

Sample Unit :

• Shop Owners OF Khan Market and GK Market.

Sample Size:

• 45 Respondents
QUESTIONNAIRE

i. How do you manage your investments ?

• Self
• Financial Advisor
• Both

ii. Which Wealth Management company you consult ?

__________________________________________

iii. Rank these factors that you consider while selecting the advisory
company? ( as 1 to 5 )

• Products & Services

• Relationship Manager
• Brand Name
• Research
• References

iv. Which Asset Class forms a major chunk of your Total Investment
Portfolio ?
• Debt
• Equity
• Real Estate
• Commodities
• Gold
• Any Other Specify:
v. Of your total portfolio what is the %of investment in equity ?

• Less than 25 %
• 25 % - 50 %
• 50 % - 75 %
• More than 75 %

vi. What is the average time horizon of your investment ?

• Less than 1 Yr
• 1- 2 Yr
• 2-5 Yr
• More than 5 Yr

vii. How would you define your Risk Profile ?

• Conservative (5-8 % return)

• Moderately conservative (9-12 % return)
• Moderately Aggressive (13-18% return)
• Aggressive ( >18% return )
DATA ANALYSIS

TABLE 1
Respondents Manage their Investments
Frequency Percent Valid Cumulative
Percent Percent
Valid Self 24 53.3 53.3 53.3
Financial Advisor 6 13.3 13.3 66.7
Both 15 33.3 33.3 100.0
Total 45 100.0 100.0

Analysis : Out of the 45 Respondents, 53.3% manage their investment by

themselves and 46.7% by their Financial Advisor.

TABLE 2
Consult wealth management company
Frequency Percent Valid Cumulative
Percent Percent
Valid Citi gold 6 13.3 28.6 28.6
Bajaj Capital 6 13.3 28.6 57.1
Barclays 3 6.7 14.3 71.4
Birla Sunlife 3 6.7 14.3 85.7
HSBC 3 6.7 14.3 100.0
Total 21 46.7 100.0
Missing System 24 53.3
Total 45 100.0

Analysis : Out of the 21 Respondents that have Financial Advisory services,

28.6% are of Citi Gold and Bajaj Capital, and 14.3% of Barclays, Birla Sunlife
and HSBC.
TABLE 3
Asset Class forms major chunk of your Total Investment
Frequency Percent Valid Cumulative
Percent Percent
Valid Debt 6 13.3 13.3 13.3
Equity 6 13.3 13.3 26.7
Real Estate 15 33.3 33.3 60.0
Gold 9 20.0 20.0 80.0
LIC, FD’s 9 20.0 20.0 100.0
Total 45 100.0 100.0

Analysis : Result from the 45 respondents surveyed shows that 33.3%

respondents have major chunk of their total investment in Real Estate, followed
by Gold (20%), LI & FD’s (20%), Equity (13.3%) and Debt (13.3%).

TABLE 4
Percentage of equity investment
Frequency Percent Valid Cumulative
Percent Percent
Valid Less than 25% 21 46.7 58.3 58.3
25% - 50% 6 13.3 16.7 75.0
50% - 75% 9 20.0 25.0 100.0
Total 36 80.0 100.0
Missing System 9 20.0
Total 45 100.0

Analysis : Result from the 45 respondents surveyed shows that 36 respondents

(i.e. 80%) have investments in equity. 58.3% have less than 25% in equity out
of their total investment, 16.7% between 25% - 50% and 20% between 50% -
75% have equity exposure.
TABLE 5
Average time horizon for investment
Frequency Percent Valid Cumulative
Percent Percent
Valid Less than 1 Yr. 6 13.3 13.3 13.3
1 – 2 Yrs 9 20.0 20.0 33.3
2 – 5 Yrs 15 33.3 33.3 66.7
More than 5 Yrs 15 33.3 33.3 100.0
Total 45 100.0 100.0

Analysis : Out of the 45 respondents, 33.33% hold their investment for more
than 5 years followed and only 13% hold their investment for less than a year.

TABLE 6
Return expectation (Risk Profile) of respondents
Frequency Percent Valid Cumulative
Percent Percent
Valid Conservative (5-8% return) 15 33.3 33.3 33.3

Moderately conservative (9- 3 6.7 6.7 40.0

12% return)

Moderately Aggressive (13- 12 26.7 26.7 66.7

18% return)
15 33.3 33.3 100.0
Aggressive ( > 18% return)

Total
45 100.0 100.0

Analysis : Result from the 45 respondents surveyed shows that 33.3% are
Aggressive and 26.7% expect13% - 18% from their investments.
LEARNINGS

• Wealth management is an investment advisory discipline that

incorporates financial planning, investment portfolio management and a
number of aggregated financial services. It basically deals with High net
worth individuals who have net worth of 1 million USD and Ultra HNI’s
who have net worth of 5 million USD.

• The whole process of Client Acquisition right from searching of HNI

client to fixing of meeting and Portfolio creation.

• Products and services are offered according to risk appetite and return
expectation of client.

• There are various Asset Classes like equity, debt, real estate, Gold,
commodities, FD’s and structured products.

• If we invest in equity for longer duration they give higher returns.

• Relationship is maintained with clients basically on 3 things :

 Honesty

 Knowledge

 Quality Service

• One of the learning was how to do Tele-Calling and how

difficult is to crack the meeting with client.
  Some clients are very arrogant whereas some are
Down-to-earth.
 They don’t invest their whole amount upfront at once,
first they invest a small amount as to have confidence on the
relationship manager and then accordingly invest the rest.
 The meeting with client while calling totally depends
on 2 factors: the way of speaking and luck.
 To build repo with client the discussion with the
client should be of his interest and related to his field and what are
his current investments are to be known so accordingly proposal is
made.

• On your 1st meeting with client you should

only know your customer what is his investment behavior, his risk
appetite.

• Different types of products suit different

category of clients according to their risk appetite such as conservative
client are suggested debt funds and Highly aggressive are suggested Pure
Equity Small and Midcap Funds.

• Market is highly volatile for past 2 months

according to the experts it would remain same for this year.
RECOMMENDATIONS

• Brand Positioning Strategy should be strengthen through various means

of Marketing like Advertisement through media, hoardings, internet.

• Should conduct seminars for HNI Clients to promote Chola’s Product

and Services.

• Should Increase Branches.

BIBLIOGRAPHY

• CHANDRA PRASANNA, Financial Management, TATA McGraw-Hill

Publications

• KHAN M.Y. and JAIN P.K., Financial Management Text and Problems,
4th ed. TATA Mc Graw-Hill

• Economic Times (Investors Guide)

• www.investopedia.com

• Journals from P.H.D. chambers of Commerce and Industry.

• Web sites – mutualfundsindia.com, amfiindia.com

• CHOLAMANDALAM monthly magazines.

• Cholamandalam website