RESEARCH PROJECT REPORT ON

WEALTH MANAGEMENT
AT

Submitted in partial fulfilment of the requirement of the

Masters in Business Administration Programme
Offered by Jain University during the year 2013-14

BY
MOHAMMED SHAIQ
3rd Semester MBA C Sec

UNDER THE GUIDANCE OF

PROF.Dr.BRR

# 319, 17th Cross, 25th Main, JP Nagar 6th Phase Bangalore 560 078
Phone : 080-43430400, Fax : 080-26532730

E-mail : mba@cms.ac.in, Website : www.bschool.cms.ac.in

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Declaration
I, hereby declare that this Lab Hours / Project (Research Project) on WEALTH
MANAGEMENT is prepared by me during the academic year 2014-15 under the
guidance of Prof Dr BRR
I also declare that this project which is the partial fulfillment of the requirement
for MBA programme Offered by Jain University, it is the result of my own efforts with
the help of experts.

Name : MOHAMMED SHAIQ

Sem : 3rd
Sec : C
Reg.No : 13MBA63051

Date :
Place :
Signature

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ACKNOWLEDGEMENT

It gives me immense pleasure in presenting the project report on WEALTH

MANAGEMENT
Firstly, I take the opportunity in thanking almightily and my parents without whose
continuous blessings, I would not have been able to complete this project.
I would like to thank my project guide Prof. Dr BRR for his great help, valuable
opinions, advice and suggestions in fulfillment of this project.
I am also grateful to Prof. Durga Praveena for encouraging me to select the project
topic.
I am thankful to our college for all the possible assistance and support, by making
available the required books and the internet room which have proved useful to me
in successfully completing my project.
I hope that I have succeeded in presenting this project to the best of my abilities.

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CONTENTS:

SR.NO

PARTICULARS

1.

Abstract

2.

Chapter 1 - Introduction to the Study

3.

Chapter 2 - Industry and Company Profile

4.

Chapter 3 - Analysis and Interpretation

5.

Chapter 4 - Findings, Recommendations & Conclusions

6.

Reference

7.

Appendices

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PG.NO

Abstract
India is a nation with emerging financial markets. The growth is immense in this
sector. This sector is also known as BFSI (Banking, Financial Services and Insurance)
Industry. Wealth management is one of the sectors which is emerging now a days in
India. IIFL is the first bank in India to start up with wealth management services.
This project totally deals with the various aspects of wealth management of IIFL,
which include customer experience, wealth product awareness.This research was
also conducted to know the reasons behind different customers investment
activities. The scope also includes where and why IIFL lacks behind in the market
has analyzed and the necessary recommendations have been suggested.
EXECUTIVE SUMMARY

IIFL 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 IIFL , Silk Board , Blore
The project was of 8 weeks duration.

During the project I had taken the guidance of Wealth managers &
staff to collect the data, & also made use of Companys 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.
2. Solution framework for wealth management.
3. Key Challenge Areas.
4. Core Elements of Wealth Management Services.

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Chapter 1 - Introduction to the Study

1 - Wealth Management is defined as the complete blend of various asset classes,

lax consultancy and risk management strategies molded into a single cast normally
targeted at High Net worth Individuals. It normally addresses certain critical issues
such as asset allocation, retirement planning, estate and trust planning, business
succession planning as well as equity planning. HNWI of today is technologyaccessed global in outlook and is willing lo learn from the experience of the
matured members of the club outside India. Apart from portfolio management asset
allocation techniques and retirement planning, his frightening concern is about the
wealth transfer or generational planning. Most of the wealth in the good old days
was locked mainly, in two asset classes- properly and precious articles like gold,
precious stones and jewellery. The nature of these holdings was low- income
producing or rendered meaningless by the rigid tenancy laws. A long drawn out
legal bailie adversely affected the gain of the assets only. Substantial pari of the
asset holding today is financial in character with its inherent cash flow feature
encompassing both income and liquidity. Any prolonged legal battle today is likely
to be doubly painful in comparison. Wealth management services have been
getting more attention over the last two years. A booming 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 serv ices" to a select few. This was not a serv

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ice you could apply for. The unsaid tagline was "Dont call us. We'll call (if you are
that wealthy!)." Today, a number of banks 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 etc.
Wealth management is just emerging in India. The growth of the economy has
already been widely showcased. Wealth and disposable income are growing
substantially. For the first time the ability to earn and save are slightly different.
Earlier you just pul away your money in some guaranteed products.
Today, when even the government is withdrawing from those products (it recently
slopped the maturity bonus on post-office savings), investors, whether they be
doctors, architects or anyone else, need professional help.

India is one of the fast growing economies in the world and hence it has a large pool
of the people whose net worth is high and very high net worth individuals. The
number of the people inthese categories is increasing with a faster pace than any
other country of the world. The mainstream of the growth the country is these HNIs
and UHNIs (Ultra High Net Worth Individuals), and because these have a large pool
of money means they have investible money ,every financial institution try to get
them as their clients so that by doing business with them financial institutions can
also get a strong base in the economy.
The financial institutions are providing various services to the HNIs and UHNIs to
make their investment decisions, such kind of services now a day are called wealth
management services and the financial planning. Todays investors have become
very sophisticated in their investment decisions.
Such sophisticated investors (HNIs) with a heightened interest in international
investments are determined to get the best return on their wealth. Thus , the wealth
management and private banking industry must offer their wealthy clients
innovative and comprehensive strategies to effectively organize their investments.

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The financial planning and the wealth management services sound similar on the
surface but in the deep they are a little bit dissimilar also. In a broad view wealth
management services is a part of the financial planning services. But now a day
wealth management services are restricted to the sophisticated customers so that
the term wealth is not used for each and every customer of the
financial institutions.
Wealth doesnt mean that it is related only with the money ,wealth can be the
business ,house and property, gold ,bonds ,stocks, jewels etc. and to maintain and
take care of this and as well asto increase the worth of all of these people need
assistance.
The financial institutions provide the assistance to those people who either want to
proceed with various phases of the financial planning and the wealth management.

India Infoline Ltd is also one of the wealth management services providers
and isdoing very well in this area. Some of its services are well known and as
it is associated with theState Bank of India it has a very strong reputation
among the people .
In the later part of the project we will come to know that what various kinds
of the financial planning services and the wealth management services are
provided by the financial institutions.
There are some findings and recommendations are also provided,that are the result
of the survey of the HNIs and the according to the responses provided by them to
the different questions of the questionnaire.
1.1 - Objective Of Study

Financial institutions like Banks and other institutions need information on

the needs and requirements of the HNIs in the different investment
objectives. In order to make sound decision about providing best possible
solution to the clients financials needs and problems.
To study the various wealth management services provided by the
Organization.
To know what are the primary investment objectives of the HNIs as no two
people have same kind of service requirements.
To know the existing level of satisfaction and dissatisfaction of the clients
about the services provided by the Organization.

To analyze the evolution and growth of wealth management market in India.

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To analyze whether Indian economic development is creating a broad and competitive wealth
management market in India.
To discuss the factors that have acted as facilitators and obstructions for the growth of wealth
management market in India.
From the above three objectives, to derive the potentiality and the future prospect of the wealth
management industry in India.
This project report also analyzes both the onshore and offshore aspects of liquid wealth in India
and sizes the mass affluent and high net worth customers by onshore wealth.

1.2 - Statement of the problem

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.

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2. Universal Service Offering

3. Investment in People Processes
4. Price not a True Differentiator
5. Unconventional Delivery Channel and Communication
6. Flexibility of Technical Architecture: Against the background of
lack of clarity on business model and involved process, A loosely
oriented technical architecture with optionality and mix of Build
Buy Integrate components would be considered as a good
beginning point.
To meet the information technology requirements, a firm has
several alternatives (or combination of alternatives) to consider:
Integrated solution approach: Developing in-house applications to meet end-to-end new
business requirements.
Service Bureau /ASP Model: Information technology service providers offering integrated
end-to-end processing infrastructure and services including core of business processes of
wealth management.
Stand-alone commercial software product/solutions: Pre-packaged solutions that can be
focused to specific part of services or provide comprehensive end-to-end processing.
To provide enough resilience and high business relevance, any of the considered
option and associated technical structure should keep due provisions for the
following key elements:

Rule based processing to manage complex business rules and service definitions.
Client 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.

1.3 - The common financial mistakes and how to avoid them

There are many financial mistakes that we all make, which are quite common and
perpetuated generation after generation. `Financial mistakes', which if avoided, can
result in financial freedom and wealth creation. The most common of some of
the financial mistakes are as under:OverspendingDelaying or ignoring a Will-

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Insurance folliesNot creating Contingency fundPutting Off Financial PlanningNot starting savings early and not realizing power of compounding

OVERSPENDING : WHILE WE SEEM TO THINK OVERSPENDING IS NORMAL , IT IS

NOT WISE. IT CAN BE DISASTROUS . WHEN WE ARE YOUNG AND START EARNING,
WE THINK THAT WE WILL CONTINUE TO EARN SAME INCOME AND EVEN MORE FOREVER! EXCESSIVE SPENDING RESULTS INTO LOWER SAVINGS AND RISING
LEVEL OF DEBT. WE TEND TO POSTPONE INVESTMENT AND PREPONE EXPENSES .
IN FACT, WE SHOULD BE DOING EXACTLY THE REVERSE I.E PREPONE
INVESTMENT AND POSTPONE EXPENSES . MOST OF US DO NOT HAVEMONTHLY
EXPENSE BUDGET . WHEN WE GO OUT TO SHOPPING MALL, ALMOST EVERYTHING
ON DISPLAY SEEMS LIKE A NECESSITY TO US. WHENEVER THERE IS A `SALE'
WE TEND BUY IRRESPECTIVE OF THE FACT WHETHER IT IS REQUIRED OR NOT,
FOR IMMEDIATE CONSUMPTION . WHILE IT IS NOT WRONG TO BUY FROM
`SALE, WE SHOULD REALIZE THAT WE END UP BUYING SOMETHING WHICH MAY
NOT BE REQUIRED OR WHICH CAN BE EASILY POSTPONED . WE ALSO NEED TO
RETURN TO GROUND REALITY AND MAKE THE CRUCIAL DECISION BETWEEN A
NECESSITY AND A LUXURY. IF WE WANT TO REDUCE OUR DEBT, SAVE MORE AND
ACHIEVE FINANCIAL FREEDOM , IT IS IMPORTANT TO IDENTIFY THE ROOT CAUSE
OF OVERSPENDING .

DELAYING

OR IGNORING A

WILL: UPDATED

NOMINATION AND THE EXISTENCE OF

A WILL IS OF CRUCIAL IMPORTANCE WHETHER THE PERSON IS SINGLE OR

MARRIED .

EVEN

IF A PERSON HAS NOMINATED SOMEONE ,IT DOES NOT

AUTOMATICALLY MEAN THAT THE CONCERNED PERSONS WILL GET TOWN THAT
ASSET.

NOMINATION IS THE RIGHT TO RECEIVE,NOT THE RIGHT TO OWN. FOR

EXAMPLE ,IF THE PERSON HAS NOMINATED HIS WIFE IN VARIOUS ASSETS
(BONDS,BANK DEPOSITS,SHARES,ETC), THE WIFE GETS THE RIGHT TO RECEIVE
THE ASSET. BUT,IN CASE THERE IS NO WILL ,ANY OTHER FAMILY MEMBER ,FOR
EXAMPLE HIS MOTHER ,HAS THE RIGHT TO TAKE THE MATTER TO THE COURT . A
WRITTEN WILL ENSURES THAT THE ASSET GOES TO THE PERSON ONE DESIRES .
A WILL NEED NOT BE DRAFTED ONLY WITH A HELP OF A LAWYER. ONE CAN
DRAFT IT IN OWN HANDWRITING AND THE FORMAT / DRAFT IS SIMPLE AND CAN
BE EASILY ACCESSED ON THE NET. A HANDWRITTEN WILL ,ATTESTED BY TWO
PERSONS , PREFERABLY ONE OF THEM THE PERSON 'S DOCTOR ,AND WOULD
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ENSURE THAT THE WILL WOULD NOT BE CHALLENGED .

THE IDEA OF
NOMINATION

MOST PARENTS LEAVE

MAKING A WILL AFTER THEIR RETIREMENT . THEY FEELTHAT
OR JOINT HOLDING WILL SERVE THE PURPOSE . IF A PERSON DIES

INTESTATE ,THEN THE POSSIBILITY OF LEGAL DISPUTES AND DIVISION OF ASSETS

UNDER SUCCESSION ACTS BECOME A REALITYAMONGST THE FAMILY MEMBERS .

INSURANCE FOLLIES:
RISK

MANAGEMENT IS ENSURING THAT HEALTH AND LIFE INSURANCE IS IN

PLACE (AND ADEQUATE TOO) AND THAT THERE ARE NO LAPSES IN PREMIUM
PAYMENTS .

MANY

OF US TAKEMORE THAN ONE INSURANCE POLICY TO PROVIDE

MAXIMUM SAFEGUARDS AGAINST RISK . INSTEAD OF TAKING MULTIPLE

POLICIES ,ONE SHOULD GO FOR INCREASING LIFE COVER IN THE EXISTING
POLICY .

WEOFTEN HAVE ADEQUATE LIFE COVER ,BUT IGNORE TO TAKE A

MEDICAL POLICY ,WHICH ULTIMATELY FORCEUS TO SHELL OUT HEFTY SUMS OUT
OF OUR SAVINGS TO COVER MEDICAL EXPENSES . WE OFTEN FORGETTO TAKE
MEDICAL POLICIES FOR THE KIDS OR PARENTS ,LEAVING THEM EXPOSED ,IN THE
CASE OF EVENTUALITY . DURING THE LAST COUPLE OF YEARS,INSURANCE
PRODUCTS LIKE ULIP HAVE GAINED POPULARITY BECAUSE OF THE RISING
EQUITY MARKETS . HOWEVER ,SUCH PRODUCTS ARE EXPENSIVEAND PROVIDE
LESS LIFE COVERAGE . PEOPLE END UP BUYING PRODUCTS ,WHICH ARE
INAPPROPRIATEFOR THEIR REQUIREMENT . INVESTMENT IS NOT AN EXPENSE . IT
IS MONEY PUT AWAY FOR FUTURE USE .SO,CUTTING DOWN ON INVESTMENTS IS
NOT A GOOD IDEA .
Not creating contingency fund:One should keep aside contingency fund for rainy
days, part in form of cash and part in bank account. Contingency fund is required to
take careof medicalemergency,loss of income due to job loss etc. This amount
should be roughlyequivalent to three to five months of living expenses including
funds required for emergency. Few people keep such emergency fund.

Putting Off Financial Planning:

Financial planning helps us to make provision for financial needs that will arise in
the future. Financial planning involved setting up of financial goals and appropriate
asset allocation. Without a proper plan,people often try tomaximize returns and take
undue risk. There is a danger of not achieving the life goals,if proper asset
allocation is not adhered to. For example,

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if you set aside certain funds (andallocate to equities!) for your daughter's
marriage,which is say one year away. If there isa crash in the equity market,the
required funds cannot be madeavailable to take care of marriage expenses. Such
funds need to be parked in safe assets for short-term needswithout taking any risk.
The biggest mistake that people make is to ignore the value of financial planning.

Not starting savings early and not realizing power of compounding:When we startour career
and earn,we want to buy whole world from it. We get married; we buy home, have
our family,
expenses keep adding up. Our income increases but so does our expenses. When
we start earning we don't think about savings. We tend to forget power of
compounding. Because of the power of compounding specially over a long period
of time,the difference between starting to invest early versus starting late can have
asignificant impact on your wealth. Benjamin Franklin described power of
compoundingas the eight wonders of the world'. Legendary investor and wealthiest
man on earthWarren Buffet made his first investment when he was11years old and
according to himhe started late. Warren Buffest was millionaire by the time he was
around 30years old.

1.4 Advantages and Limitation

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.

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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

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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 doesnt 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 dont 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.
1.5 - RESEARCH METHODOLOGY
Data Collection:

Primary data
Primary data are data freshly gathered for a specific purpose. The various sources of
primary data for my project are as follows.
Banks.
Local residents.
People from industries
Mall
Small Retailers

Secondary Data
Secondary data provide a starting point for research and offer the valuable source of
information.
The secondary data was the most important source for my project because it gave us information
about company profile, competitors, market scenario, market share, etc.

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It also give us information of the financial industry, its emergence,& its importance in country
progress.
We used secondary data for following sources:
Internet
Indiainfoline brochure
SIGNIFICANCE OF THE STUDY
Allows wealth managers to monitor threats and opportunities posed by their main
competition.
Helps plan products and services by giving key information on customers financial
services preferences.
Looks at the onshore liquid wealth of mass affluent and high net worth individuals in
India and in India's largest and most affluent states.
Offers access to key statistics providing a clear picture of the scale, composition and
direction of the developing landscape on a regional basis.
Find out why India is an attractive market and its advantages over other emerging
economies.

1.5 - LITERATURE REVIEW

Dublin Business Wire Research and Markets (March 29, 2011) published an article
Private Wealth Management India - Family Offices for Ultra-High Net Worth
Individual (UHNWI) has said that the focus of companies are now shifting towards
Ultra high net worth individuals or families (those who have invest able assets more
than rupees 45 crore or $10 million) from the high net worth individuals (those who
have investable assets more than rupees five crore or $1 million). This article mainly
talked about Ultra-HNWIs and families in India. It also talks about the emergence of
family offices in India. It deeply analyzes the segregation advisory services on the
basis of wealth in India.

It was also mentioned Indian Ultra-HNWIs have unique demands in terms of

products and services. Ultra-HNWIs have high risk taking abilities as compared to
HNWIs. Thus, the products offered to them are more sophisticated and risky. Due to
high invest able base and diversified needs, they also require more customized and
tailor-made services to manage their family needs as well as grow their wealth.

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RBI Report (2010) on Trends and progress of Banking in India gives us information
regarding the current state of Indian Banking industry and also prospective from
global trends and how these perspectives work on Indian banking industry. It also
talks about the global developments in regard to the macroeconomic scenario and
also financial markets. A clear note of how the policy environment is present is
shown through various other parts of the same report. It also discusses about the
performance of the banks in the particular year the developments that are taking
place in the industry. It also speaks about NBFCs (Non Banking Finance Companies)
which are neglected in Indian Financial market for obvious reasons but this report
has provided necessary information and knowledge about the Financial Market.

AMFI (April 2010) newsletter is the official quarterly review of Association of Mutual
Fund in India. It gives information about the mutual fund industry that particular
quarter. The Association of Mutual Funds in India (AMFI) is dedicated to developing
the Indian Mutual Fund Industry on professional, healthy and ethical lines and to
enhance and maintain standards in all areas with a view to protect and promote the
interest of mutual funds and their unit holders. This news letter gives a clear not of
how the mutual fund companies are doing so that new investors can have a look
before they invest. It talks about the current trends and challenges in the industry.
The challenge for the industry right now is to activate, strengthen and support the
distribution system, which plays a crucial role in promoting Mutual Fund schemes
among retail households. This paper gives the updates on SEBI, regulatory body
meeting.

Dr. Amit Kumar Dwivedi, Punit Kumar Dwivedi, Dharmendra Kr. Singh (June 2008) in
their paper on Wealth management in India : Issues & Concerns has told that now
a days the word wealth management is becoming more important and so many
banks are engaged in wealth management. They have also given the position of
India in wealth management. In the annual survey done by Cap Gemini, SA and

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Merrill Lynch it was found that ranks of millionaires grew 6% in the previous year,
because the number of richer people grew in India and China where India is
competing China. India & China has got increase in millionaires by 23% & 20%
respectively. So they told that there will be more wealth management business
opportunities in India and China.

They also concluded that wealth management has various aspects some are
favorable and friendly for the Indian economy and some are very dangerous for the
Indian economy. The customers have to beware and they have to make SWOT
analysis before choosing the wealth management option. The limitations given by
the authors are chances of fraud, inflation.

ChandraShekhar (Jan 2008) in his article Indias wealth management business set
to boom he mentioned that Indian wealth management industry is emerging up
with more opportunities. He also quoted a report named Overview of Indian Wealth
Management Market which has said that over the next four-five years, wealth
management service revenues are expected to contribute to over a third (32-37 per
cent) of full-service financial institutions. He also said that disposable income is
expected to grow from the current 2 percent to 5 percent in 2017. In 2008, Indian
financial sector shares about 7 per cent of the total national disposable income. The
share of the financial institutions would grow to 18 per cent by 2012, it is estimated.

It was forecasted that by 2012, the countrys wealth management market to be $1

trillion, with approximately 42 million households where in it was 13 million
households at that point of time.

1.6 - POSITION OF INDIA IN WEALTH MANAGEMENT

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 &
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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 year (2012-13).
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.

1.7 SOURCE
INDIA is now home to a new breed of billionaires: Those created by an almost inexplicable rise
in the values of the stocks they hold.

Forbes List of Top 10 Richest People in India

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Rank

Name

1
2
3
4
5
6
7
8
9
10

MUKESH AMBANI
LAKSHMI MITTAL
DILIP SHANGHVI
AZIZ PREMJI
Pallonji Mistry
Hinduja Brothers
Shiv Nadar
Adi Godrej
Kumar Birla
Sunil Mittal

Net Worth ($ in
Billion)
21
16.2
13.9
13.8
12.5
9
8.6
8.3
7.6
6.6

The combined wealth of the 20-million strong non-resident Indians community is estimated to be
over $2 trillion dollars -- more than the country's entire economy. Overseas Indians are estimated
to hold financial wealth, apart from real estate, gold and art, of over $900 billion. The total
wealth would be over $2 trillion, according to the report by High-Powered Expert Committee
appointed by the Centre to suggest ways to make Mumbai an international financial centre.
These NRIs were a natural beachhead as a customer base where an Indian Personal Wealth
Management industry can get started. Their wealth management services were presently being
sourced almost exclusively from abroad, the report said. The report listed 11 activities typically
provided by an international financial centre (IFC) and referred to PWM as one of the most
important activities undertaken at an IFC. According to the report, PWM for high-net worth
individuals is estimated to involve management of personal assets of $10-14 trillion globally.

The acceleration in growth is driven by continued momentum in the services and manufacturing
sectors, growth of which are expected to be in double-digit figures.
India is both attracting foreign wealth managers to set up business and domestic
banks to set up wealth management businesses. Going forward this is a trend that
is likely to continue, with Indias key advantages attracting more and more
competitors.

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The attractiveness of Mumbai as a location for banks is backed up by the figures on

deposits held by foreign banks in India. Of the total value of deposits held by foreign
banks USD16bn 49.2% is in Maharashtra and all of this is in urban/metropolitan
areas of which Mumbai is a large part.

In the view of many in the industry there is a challenge of client education that must
be addressed going forward. The primary area of concern is in equity investment
and the need to invest long-term rather than short-term. This is not a problem that
is confined to India; many other countries around the globe have similar problems.

In view of the above stated conditions, it is highly likely that over the next 20 years,
wealth management will witness significant developments in the way that clients
are segmented. Following from this, client service will change to complement the
shift in emphasis, as factors other than the level of the client's wealth are taken into
consideration.

Datamonitor research indicates that there are significant benefits in the area of
liability management for the wealthy, and that the importance of liability
management as part of wealth management will inevitably grow over the next 20
years, until it becomes a key service area.

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Chapter 2 - Industry and Company Profile

2 Industry Profile
Wealth management Service is provided by banks, professional trust companies,
and brokerages. For those with sizeable assets, professional wealth management
can help you plan your estate or invest your assets based on personal criteria and
financial goals.
Wealth Management system is an integrated platform designed to support high
demand of customer relationship businesses and a complex portfolio management
analysis. The solution provides technology that helps private wealth institutions
utilize their customers database more proficiently and more efficiently. With
IndiaInfoline WMS sophisticated work system, firms will be able to enhance their
services and sale capabilities throughout a comprehensive set of wealth
management services such as investment strategy setting, marketing event or
campaign management, a high level of portfolio management or a graphic design of
a consolidated report.
Wealth management System offers a one-stop solution to take the guess work out
of mandatory rollovers so you can save time and money.

Wealth management is an advanced investment advisory discipline that incorporates

financial planning and specialist financial services. The key objectives are to provide high net
worth individuals and families with tailored retail banking services, estate planning, legal
resources, taxation advice and investment management, with the goal of sustaining and growing
long-term wealth. Wealth management can be provided by independent financial advisers or
large corporate entities whose services are designed to focus on high-net worth retail customers.
Such customers would be considered mass affluent or upper retail clients because of their net
worth, the number of potential products they own from financial institutions, their assets under
management and other methods of segmentation. Large banks and brokerage houses create
separate sales forces, services and other benefits to retain or attract these customers who are
typically more profitable than other retail banking, brokerage, or insurance customers.
In most industrialized countries, a substantial part of financial wealth is not
managed directly by savers, but through a financial intermediary, which implies the
existence of an agency contract between the investor (the principal) and a broker or
portfolio manager (the agent). Therefore, delegated brokerage management is
arguably one of the most important agency relationships intervening in the

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economy, with a possible impact on financial market and economic developments at

a macro level.
As the per-capita-income of the city is on the higher side, so it is quite obvious that
they want to invest their money in profitable ventures. On the other hand, a number
of brokerage houses make sure the hassle free investment in stocks. Asset
management firms allow investors to estimate both the expected risks and returns,
as measured statistically. There are mainly two types of Portfolio management
strategies.
Passive Portfolio Strategy
Active Portfolio Strategy
Passive Portfolio Strategy: A strategy that involves minimal expectation
input, and instead relies on diversification to match the performance of some
market index. A passive strategy assumes that the marketplace will reflect
all available information in the price paid for securities
Active Portfolio Strategy: A strategy that uses available information and
forecasting techniques to seek a better performance than a portfolio that is
simply diversified broadly.

2.1 - The Basic Methods of Wealth management is.

1) Mutual funds
A Mutual Fund is a body corporate registered with SEBI (Securities Exchange Board of India)
that pools money from individuals/corporate investors and invests the same in a variety of
different financial instruments or securities such as equity shares, Government securities, Bonds,
debentures etc. Mutual funds can thus be considered as financial intermediaries in the investment
business that collect funds from the public and invest on behalf of the investors. Mutual funds
issue units to the investors. The appreciation of the portfolio or securities in which the mutual
fund has invested the money leads to an appreciation in the value of the units held by investors.
The investment objectives outlined by a Mutual Fund in its prospectus are binding on the Mutual
Fund scheme. The investment objectives specify the class of securities a Mutual Fund can invest
in. Mutual Funds invest in various asset classes like equity, bonds, debentures, commercial paper
and government securities. The schemes offered by mutual funds vary from fund to fund. Some

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are pure equity schemes; others are a mix of equity and bonds. Investors are also given the option
of getting dividends, which are declared periodically by the mutual fund, or to participate only in
the capital appreciation of the scheme

2)Equities
Equity trading is the buying and selling of company stock shares. Shares in large publiclytraded companies are bought and sold through one of the major stock exchanges, such as
the Bombay Stock Exchange, National Stock Exchange, which serve as managed auctions for
stock trades.
Share or stock is a document issued by a company, which entitles its holder to be
one of the owners of the company. A share is issued by a company or can be
purchased from the stock market.

Share market where dealing of securities is done is known as share market. There are two ways
in which investors gets share from market:
Primary market: markets in which new securities are issued are known as primary market. This
is part of the financial market where enterprises issue their new shares and bonds. It is
characterized by being the only moment when the enterprise received money in exchange for
selling its financial assets.
Secondary Market: Market in which existing securities are dealt is known as secondary market.
The market where securities are traded after, they are initially offered in the primary market.
Most trading is done in the secondary market.

The Stock Market is an invisible market that trades in stocks of various companies belonging to
both the public and private sectors. The Indian Stock Market is often referred to as the Share
Market since it deals primarily with shares of various companies.
A Stock Exchange is a place where the stocks are listed and traded. Such exchanges may be a
corporation or mutual organization which specializes in the business of introducing the sellers
with the buyers of stocks and securities.
The Indian Stock Market in India comprises of two stock exchanges:

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Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)
BOMBAY STOCK EXCHANGE (BSE)
The Bombay Stock Exchange (BSE) was established in 1875.The BSE India Stock Exchange
serves as the most important for companies to raise money. The chief function of the Stock
Market of India is to help raise money as capital for the growth and expansion of various private
and public sector enterprises. Besides, the Stock Market of India provides able assistance to the
individual investors through daily updates on current position of the stocks of the respective
companies that are enlisted in the Stock Index in which the movement of prices in a section of
the market are captured in price indices. The popular acronym for Stock Index is Sensitive index
or sensex. Moreover, the liquidity provided by the exchange enables the investors to sell
securities owned by them easily and quickly. Hence a person, who is subjected to sudden dearth
of funds, can immediately sell his shares for cash in India Stock Market.
The BSE Sensex, also known as BSE 30 is a widely used market index not only in India but
across Asia. In terms of volume of transactions, it is ranked among the top five stock exchanges
in the world.
NATIONAL STOCK EXCHANGE (NSE)
The National Stock Exchange of India Ltd. (NSE), set up in the year 1993, is today the largest
stock exchange in India and a preferred exchange for trading in equity, debt and derivatives
instruments by investors. NSE has set up a sophisticated electronic trading, clearing and
settlement platform and its infrastructure serves as a role model for the securities industry. The
standards set by NSE in terms of market practices; products and technology have become
industry benchmarks and are being replicated by many other market participants.
NSE provides a screen-based automated trading system with a high degree of transparency and
equal access to investors irrespective of geographical location. The high level of information
dissemination through the on-line system has helped in integrating retail investors across the
nation.
The exchange has a network in more than 350 cities and its trading members are connected to the
central servers of the exchange in Mumbai through a sophisticated telecommunication network
comprising of over 2500 VSATs.

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NSE has around 850 trading members and provides trading in equity shares and debt securities.
Besides this, NSE provides trading in various derivative products such as index futures, index
options, stock futures, stock options and interest rate futures.
In addition to these organizations there are other organizations highlighting on the share trading
in the Indian Stock Market are:
Securities and Exchange Board of India (SEBI)
NSDL
CDSL

3)Commodities
Do you think gold prices will go up further?
Are you sure that crude oil prices are going to fall?
Have you heard that the soya crop this year is bad and will result in soya prices going up?
If you believe that these predictions have a good chance of coming true and are willing to bet
some money on them, you could try your hand at playing the commodity futures market.
A commodity is a basic good representing a monetary value. Commodities are most
often used as inputs in the production of other goods or services. With the advent of
new online exchange, commodities can now be traded in futures markets. When
they are traded on an exchange,
Commodities must also meet specified minimum standards known as basic grade.
Types of Commodities
Precious Metals

: Gold and Silver

Base Metals

: Copper, Zinc , Steel and Aluminum

Energy

: Crude Oil, Brent Crude and Natural Gas

Pulses

: Chana , Urad and Tur

Spices

: Black Pepper, Jeera, Turmeric , Red Chili

Others

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: Guar Complex, Soy Complex, Wheat and Sugar

4) Bonds
Bonds refer to debt instruments bearing interest on maturity. In simple terms, organizations
may borrow funds by issuing debt securities named bonds, having a fixed maturity period (more
than one year) and pay a specified rate of interest (coupon rate) on the principal amount to the
holders
It is a fixed income (debt) instrument issued for a period of more than one year with
the purpose of raising capital. The central or state government, corporations and
similar institutions sell bonds. A bond is generally a promise to repay the principal
along with a fixed rate of interest on a specified date, called the Maturity Date.

5) Portfolio Management Service (PMS)

Portfolio management service (PMS) is a type of professional service offered by portfolio
managers to their client to help them in managing their money in less time. Portfolio managers
manage the stocks, bonds, and mutual funds of clients considering their personal investment
goals and risk preferences. In addition to money, the portfolio managers manage the portfolio of
stocks, bonds, and mutual funds.
Successful investing in Capital Markets demands ever more time and expertise.
Investment Management is an art and a science in itself. Portfolio Management
Services (PMS) is one such service that is fast gaining eminence as an investment
avenue of choice for High Net worth Investors (HNI). PMS is a sophisticated
investment vehicle that offers a range of specialized investment strategies to
capitalize on opportunities in the market. The Portfolio Management Service
combined with competent fund management, dedicated research and technology,
ensures a rewarding experience for its clients.
Indiainfoline PMS brings with it years of experience, expertise, research and the
backing of India's leading stock broking house. At Angel, experienced portfolio
management is the difference. It will advise you on a suitable product based on
factors such as your investment horizon, return expectations and risk tolerance.

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6) Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of
financial assets over time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender at
a later time. Typically, the money is paid back in regular installments, or partial repayments; in
an annuity, each installment is the same amount. The loan is generally provided at a cost,
referred to as interest on the debt, which provides an incentive for the lender to engage in the
loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can
also place the borrower under additional restrictions known as loan covenants.
Acting as a provider of loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical source of funding.

7) Insurance
Insurance is a basic form of risk management which provides protection against possible
loss to life or physical assets. A person who seeks protection against such loss is termed as
insured, and the company that promises to honor the claim, in case such loss is actually incurred
by the insured, is termed as Insurer. In order to get the insurance, the insured is required to pay to
the insurance company (i.e. the insurer) a certain amount, termed as premium, on a periodical
basis (say monthly, quarterly, annually, or even one-time).

2.2 - 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.
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Depending on the mandate of the services given to the Wealth Manager,

wealth management services could be

Packaged at various

levels
a) Advisory

Wealth mangers 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

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

function areas :
a)

Financial Planning

b)

Portfolio Strategy Definition / Asset Allocation

c)

Strategy Implementation

d)

Portfolio Management

e)

Strategy Review and Alignment

a)

Financial Planning

Client Profiling

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Key

Client profiling takes in account multitude of behavioural,

demographic and investment characteristics of a client that would
determine each clients wealth management requirements. Some of
key characteristics to be evaluated for defining clients 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)
Behavioural History (Pattern of past investment decisions)
Level of clients engagement in investment management (active / passive)
Present investment holding and asset mix

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Investment Objective

Based on the client profile, investment expectations and financial

goals of the client could be clearly outlined. Defining investment
objectives helps to identify investment options to be considered for
evaluation. Investment objective for most of the investors could be
generally considered amongst the following:
Current Income
Growth (Capital Appreciation)
Tax Efficiency (Tax Harvesting)
Capital Preservation (often preferred by elderly people to make sure they dont 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 clients investment objectives. Thus, a broad level
investment guidance of investment in fixed income in emerging
market would further determine classification within Fixed Income
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such as Govt. or corporate bonds, fixed or variable rate bonds, Long

or short maturity bonds, Deep discounted or Par bonds, Asset
backed or other
debt variants. Return profile, risk sensitivity and co-relation of
constituents within portfolio model would help to
determine the size (weightage) of each individual constituent in the
portfolio.
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 favourable 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

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keep it aligned with the defined investment objectives, portfolio

strategy is suitably re-calibrated from time to time. Many times,
review of portfolio strategy would be necessitated due to change in
client profile or expectations.
Rebalancing, Reallocation and Divestment of Assets

Any re-calibration of strategy and consequent change in portfolio

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

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2.3 - Wealth Management Practice Orientation Overview

Transactors:

Product Expert: Handles high-volume transactions involving sophisticated products or asset

classes, such as foreign exchange derivatives.
Investment Broker: Handles transactions involving basic asset classes, such as equities, fixed
income and options.

Investment Managers:

Investment Advisor: Offers strategic investment planning, as well as playing a 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:

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Wealth Planner: Offers holistic advice in accordance with clients finances and short-/longterm 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 clients 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
regionsand 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.

2.4 - 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

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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.

2.5 - 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 Indias
emerging HNW population, customers may need an introduction to
the concept of private banking (or Wealth management).
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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2.6 - Consumer Point Of View : Wealth Management

Technically, PMS can be defined as hybrid service provided by

portfolio managers, which includes customised stock and mutual
fund investing. Portfolio managers can be of two kinds,
discretionary or non-discretionary. Discretionary portfolio managers
manage the funds of clients independently on their own accord,
while the latter manage the funds according to their clients
direction. Any person who is registered with Securities and
Exchange Board of India (Sebi) as a portfolio manager is allowed to
offer PMS.
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).
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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 dont 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 dont 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 Kotaks PMS
services. Though the relationship manager told me about the
commissions and brokerage fees, he did no promise any cut-off or
absolute number when asked about returns. The market was moving
up when I invested and my money grew to about one and half times.
But when the market tumbled suddenly, my earnings fell
substantially. He adds, The company churned the portfolio
frequently, which gave them two-way profit on each transaction, as
brokerage and profit sharing. Sabu now feels it is better to
understand the market and invest on your own. He withdrew his
investments after 14 months, even though he got returns of 25 per
cent. Outlook Money tried unsuccessfully to get a response from
Kotak Securities on this episode.
How to choose a PMS

Investment philosophy.

Akhilesh Singh, business head,

Emkay Wealth, says, The most important factor is to understand
the fund managers investment philosophy and strategy, which
must align with the investors 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.
IIFL, for instance, has a product called Strategic, which is for the
long term, while Angels 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
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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-thebenchmark 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 schemes performance based on
returns, as it may vary from the returns of an investor. Also,
depending on the time of entry, an investors returns may vary from
that of others. Before signing the contract, make sure your portfolio
manager has a fair record of surpassing the returns from the
benchmark index for numerous years.
I.V. Subramaniam, CEO and chief investment officer, Quantum
Advisors, says: The performance should be judged over long
periods of time during both high and low market levels. There
should not be any survivor bias. This happens when an investor
withdraws a portfolio due to bad performance, or a portfolio
manager removes a portfolio to show the performance numbers of
only good portfolios.
Cost structure.

Portfolio managers usually have two kinds of chargesmanagement

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

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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.

Best Private Banks In Southern Asia

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MAJOR WEALTH MANAGEMENT AGENCIES IN INDIA:

Association of Mutual Funds in India.
ABN-AMRO Bank, India
Lotus India Asset Management.
Reliance Capital Asset Management.
Dawnay Day AV Financial Services.
ASK Raymond James, India
Emerging Portfolio Fund Research, USA
Jeetay Investments, India
SBI Funds Management, India
Amas Bank, Switzerland
Max New York Insurance, India
Kotak Mahindra Old Mutual Life, India
Centurion Bank of Punjab, India
Naissance Capital, Switzerland
Everest Capital
Goldman Sachs, UK
FMG Fund Managers, USA
The Synergy Partnership, Malaysia
BaseTen Capital Management, India
ICICI Bank, India
Birla Sun Life Insurance, India
Standard Chartered Asset Management, India

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 Prudential ICICI Asset Management, India

ICICI Prudential Life Insurance, India
Parag Parikh Financial Services, India
Sandstone Capital, USA
Canonbury Group, UK
Corporate Finance India, India
Financial Planning Standards Board, India
Credit Suisse Asset Management, UK
Pioneer Client Associates, India
General Life Insurance Council, India
Dubai International Finance Centre, UAE
IIFL Asset Management, India
EM Capital Management, USA
SBI Funds Management, India
Financial Planning Standards Board, India
BNP Paribas, India
Pension Fund Regulatory & Development Authority, India
Blue River Capital, India
ABN Amro Bank, India
Birla Sun Life Asset Management, India
Securities and Exchange Board of India, India
Geojit Financial Services, India
IL& FS, India
Gandhi & Associates, India
Dubai Bank, UAE

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- Company Profile
Share Price
INDIA INFOLINE

152.95

IIFL Holdings Limited is the apex holding company of the entire IIFL Group, which is
a leading financial services company in India, promoted by first generation
entrepreneurs .They have a diversified business model that includes credit and
finance, wealth management, financial product distribution, asset management,
capital market advisory and investment banking. They have a largely retail focussed
model, servicing over 2 million customers, including several lakh first-time
customers for mutual funds, insurance and consumer credit. This has been achieved
due to their extensive distribution reach of close to 4,000 business locations and
also innovative methods like seminar sales and use of mobile vans for marketing in
smaller areas.

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Their evolution from an entrepreneurial start-up to a market leadership position is a

story of steady growth by adapting to the changing environment, without losing the
focus on our core domain of financial services.
Their NBFC and lending business accounts for 68% of our consolidated income in
FY13 and has a diversified product portfolio rather than remaining a mono-line
NBFC. They are a leader in distribution of life insurance and mutual funds among
non-bank entities. Although the share of equity broking in total income was only
13% in FY13, IIFL continues to remain a leading player in both, retail and
institutional space.

2.9 - History
A small group of professionals formed an Information Services Company*
The company was formed in October 1995 with a vision to produce high quality,
unbiased, independent research on the Indian economy, business, industries and
corporates.
*The company was originally incorporated as Probity Research and Services Pvt.Ltd.
The name of the company was later changed to India Infoline Ltd
Their Financial Services include

Credit & Finance

Wealth Management
Financial Products Distribution
Capital Market Advisory
Asset Management
Investment Banking
Real Estate Advisory
2.10

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2.1.1

Philosophy
IIFL (India Infoline) is committed to placing the Investor First, by continuously
striving to increase the efficiency of the operations as well as the systems and
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processes for use of corporate resources in such a way so as to maximize the value
to the stakeholders. The Group aims at achieving not only the highest possible
standards of legal and regulatory compliances, but also of effective management.

2.1.2

IIFL Foundation
In line with IIFLs vision to be the most respected company in the financial services
space, the company recognises the importance of contributing to and sustaining
social transformation. The IIFL Foundation has been set up to work in areas of skill
development for various industries and to ensure financial inclusion through the
support and upliftment of the underprivileged sections of society.
The IIFL Foundation focuses on specific areas of need, including healthcare and
education. The foundation will screen and select institutions and developmental
agencies which are working in these domains and will provide necessary aid to
improve the lives of the underprivileged and help them in achieving their potential.
The IIFL Foundation has initiated career guidance to the students of High School
and
Junior colleges in remote areas of Maharashtra to enable them to pursue the career
which provides right employment opportunities.

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2.1.3

Vision
To become the most respected company in the financial services space in
India
Values
Values are IIFL are summarised in one acronym: GIFTS
Growth with focused team of dynamic professionals
Integrity in all aspects of business no compromise in any situation
Fairness in all our dealings employees, customers, vendors and
shareholders all included
Transparency in what we do and in how and why we do it
Service orientation is our core value, imbibed by all sales as well as support
teams
Business strategy
Steady growth by adapting to the changing environment, without losing the
focus on our core domain of financial services
De-risked business through multiple products and diversified revenue stream
Knowledge is the key to power superior financial decisions
Keep costs low and continuously strive for innovation

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Objectives

The main objectives are

Customer satisfaction- The Bank believes that a satisfied customer is a valuable
asset of the bank.
Building a strong base of core deposits- The Bank believes in developing a strong
base of core deposits ensuring healthy rate of growth.
Compliance of Directives- The Bank shall comply with the directives/ guidelines
issued by RBI, IBA, Government of India and/or any other statuary
authority/agency.
2.1.4 Journey
1996
A small group of professionals formed an Information Services Company*
The company was formed in October 1995 with a vision to produce high quality,
unbiased, independent research on the Indian economy, business, industries and
corporates.
*The company was originally incorporated as Probity Research and Services Pvt.Ltd.
The name of the company was later changed to India Infoline Ltd
1997
The quality gets recognition
The quality of this research soon resulted in a client list that read like a who's who of
Indian business and finance, from Hindustan Lever To Tatas, from Crisil to McKinsey,
from SBI to Citibank.
1998
Onwards and upwards!
We launched our research products Probity 200 Company Reports, followed
Economy Probe, Sector Reports covering Pharmaceuticals, Information Technology,
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Oil & Gas and FMCG among others. Leading FIIs, brokers, banks and companies
were immediate subscribers.
1999
The launch of www.indiainfoline.com
Up popped a crazy idea if all this research were to be available free on the
internet, the number of users could well leap straight from hundreds to millions. We
took the plunge and thus www.indiainfoline.com was born! CDC(now Actis) was the
first private equity firm to invest US$1mn.
2000
Launched online trading through www.5paisa.com
This was the year we became one of the pioneers of online trading, with the launch
of 5paisa.com, a paradigm shift, with full service brokerage at 0.05% when the
industry was at 1-1.5%. we received growth capital from Intel and others in this year
of 'dot-com euphoria'.
2001
Dot com bust- and preparations for better times!
The 'internet bubble' burst with a vengeance and funding just vanished. we
persevered, nevertheless, with laying the foundations of our distribution business,
becoming India's first Corporate Agent for Insurance, tying up with ICICI Prudential
Life Insurance.
2002
Difficult year Survive without losing focus
There was global gloom. The internet bubble burst, the economy witnessed a
slowdown and the stock market was paralysed by the Ketan Parekh scam. We
conserved resources, focused on survival and avoided any distractions, which were
away from our core competencies i.e. financial services.
2003
Trader Terminal Our proprietary software to revolutionize online trading
Convinced that technology was game changer, we launched the 'Trader Terminal', a
pioneering technology that we built over 3 years, shall we call it retail investor's

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Bloomberg. The product became an instant hit and remains sought after even to
this date.
2004
Our commodities license
We were again at the forefront to offer commodities broking to retail investors. A
coincidence may be, but this was when our magical linkage between transactional
and advisory expertise began.
2005
Our Maiden IPO the tipping point
Listing on the NSE and BSE gave impetus and momentum to expansion, scaling up
and funding. It was again full steam ahead. The IPO was at Rs15.2(adjusted for split)
and shareholders have received Rs15.7 by way of dividend. The price was Rs60.65
as at FY13 end.
2006
Commenced our lending business
This was another major move for our group from fee-based to fund-based
business. From a modest beginning with all processes and controls, the NBFC was
later to become the most dominant business line.
2007
From retail to wholesale Institutional Equities begins with a bang
A high profile institutional team from the then leading foreign brokerage house
joined us in what was a first deal of its kind in the Indian broking industry, making
IIFL the port of first call for FIIs and Mutual Funds.

2008
Launched IIFL Private Wealth Management
IIFL Wealths business model, in contrast to the traditional industry's practice of
driving revenues through distribution and commission, focuses on advisory fees as
core income, ensuring alignment of interests with those of our clients. Meanwhile,
we transitioned from a corporate agent to insurance broking.

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2009
Enterprising India
Our first global investor conference, Enterprising India, held in 2009-10, received an
overwhelming response. It was attended by 450 fund managers, 67 corporates and
thought leaders like Jim Walker, David Bloom and Brahma Chellany among others.
2010
Beyond Borders
IIFL became the first Indian broker to register on the Colombo Stock Exchange. In
the same year, IIFL received in-principle approval for membership of the Singapore
Stock Exchange.
2011
The Launch of IIFL Mutual Fund
We incorporated the IIFL Asset Management company, and in doing so, ensured our
coverage of the entire gamut of financial services.

2012
Announcing the Real Estate Fund
A debt and equity linked investment instrument, this fund's focus is on affordable
residential segments in the top seven cities in India. The maiden fund raised Rs5bn,
as testimony to customer's trust.
2013
The biggest AIF and all time high income and profits
We launched AIF raising Rs6.28bn, the largest AIF fund in India, till date. Over the
years, our business model has been de-risked and is no longer dependent on
cyclical capital markets. Reported all time high income of Rs26.65bn and PAT of
Rs2.79bn.

Ticker:

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532636

Exchanges:
2013-14 PAT

BOM
Rs 2781 mn

Major Industry:

Financial

Sub Industry:

Securities Brokerage

Country:

INDIA

Key executives

S.No

Name

Designation

Mr. Nirmal Jain

Chairman and Managing director

Mr. A K Purwar

Director

Mr. R Venkataraman

Executive Director

Mr. Nilesh Vikamsey

Independent Director

Mr. Kranti Sinha

Independent Director

Mr. Sat Pal Khattar

Non Executive Director

2.1.5 - MARKETING STRATEGY OF INDIA INFOLINE

Market Positioning:
Market positioning statements of India Infoline are At India Infoline we give you
single window service and We also ensure your comfort. So, India Infoline focus
on the consumers who prefer almost all investment activities at same place by

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providing number of various financial services. At India Infoline a person can

purchase or sell shares, debentures etc. and at the same place also demat it. India
Infoline also provides other investment option to the same person at same place like
Mutual Fund, Insurance, Fixed Deposit, and Bonds etc. and help the person in
designing his portfolio. By this way India Infoline provides comfort to its customers.

Target Market:
India Infoline uses demographic segmentation strategy and segment people based
on their occupation. India Infoline uses selective specialization strategy for market
targeting. Target person for the India Infoline Stock Broking and India Infoline
Investment Service are persons who can work as sub-broker for the companies.
Companies focus on Advisors of Insurance and post office, Tax consultants and CAs
for making sub-broker
Marketing channel System:
India Infoline uses one level marketing channel for investment product distribution.
Sub-brokers work as intermediary between consumer and company. Company has
both forward and backward flow of activity through channel. Company distributes
stationery, brokerage, and information forward to its sub-broker. The sub-brokers
send filled forms, queries, amount of investment etc. back to the company.

Training Channel Members:

India Infoline provides training to the sub-brokers because they will be viewed as
the company by the investors. The executives of India Infoline explain various new
schemes of investment to the sub-brokers with its objective, risk factors and
expected return. Company also periodically arrange seminar to guide sub-brokers.
Advertising and Promotion:
The objective of advertising of India Infoline is to create awareness about services of
India Infoline among investors and sub-brokers.
India Infoline also publishes its weekly Stock Market Newsletter Market Mantra.

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HUMAN RESOURCES
The India Infoline Groups Human Resources policy is based on the philosophy of Owner
Mindset. We believe that the key to our continued growth lies in unleashing the entrepreneurial
energy of our employees. We encourage all employees to behave more as owners of their
departments rather than employees. Our people are highly driven and work towards increasing
India Infolines brand and market share across product lines.
We have developed extensive in-house training modules. In addition, our staff is trained by
various Asset Management Companies and ICICI Prudential Life Insurance Company Limited.
We lay emphasis on on the job training where an experienced and senior person mentors a
junior executive.
In addition to salary, our employees get performance-based incentives on a
quarterly basis. We have also implemented an Employee Stock Option Plan.

2.1.6 - FUNDAMENTAL RESEARCH SERVICES

Nifty Tracker :
Nifty Futures is the most traded instrument with highest volumes in F & O and
excellent liquidity. The team tracks the Nifty Future and generates calls based on
unique trading system which is a result of their focused research over the past few
years. The objective is to generate positive returns for traders who are looking for a
high risk / high reward product.
Online Chart :
An online forum to help clients, specifically day traders in judging the
directions of the market and stocks which are in the limelight.
Intraday Calls :
For day traders, indiainfoline provides intra-day calls with entry, exit and stop
loss levels during market hours. These calls are flashed on their terminals. Their
analysts continuously track the calls and provide recommendations according to the
market movements.
Position Calls :

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Indiainfoline Position Trading Calls are based on thorough analysis of the

price movement in select scrips. These calls are for a 10-15 day time span with
stop loss and target levels. These calls are flashed on their terminals during market
hours.
Derivative Strategies :
Their analysts take view on the Nifty and select stocks based on the
derivatives data and technical tools. Suitable Derivative Strategies are devised,
which are flashed on their terminals and published in their reports.
Futures Calls :
A customized product for HNIs to help them trade with leveraged position;
wherein clients are advised on the stocks with entry, exit and stop loss level for
short term benefits. Over and above this, financial status of the calls is monitored
at all times.

2.1.7 -

SWOT Analysis

Strengths
Integrated technology platform
One Stop shop
Pan - India distribution network
India Infoline.com and 5paisa.com have developed into brands

Weaknesses
Lack of a banking arm to complete the bank-broker-depository chain
Insignificant presence in institutional Segment

Opportunities
Changing demographics with higher disposable income and increasingly complex financial
instruments will drive demand for investment advisory services
Rapid penetration of Internet and computers means that technology enabled financial services
will gain market share
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Threats
Economic slowdown
Volatile movement in indices events like May 17, 2004
Stock markets falls will have a cascading effect on our mutual fund mobilization
Increase/decrease in interest rate can affect our debt/ income fund mobilizations
Future changes in personal taxation rules can impact insurance sales
Increasing competition from large and particularly foreign players

2.1.8 - PORTERS FIVE FORCE MODEL

Competitive Force: - Michael Porter has identified five forces that determine the intrinsic longrun profit attractiveness of a market or market segment.
Industry competitors
Potential entrants.
Substitutes.
Buyers.
Suppliers
Intensity of Competition:

Move towards consolidation

Lot of brokerage companies are moving towards consolidation with the smaller ones
becoming either franchisees for the larger brokers or closing operations.

Increased Focus of Banks in Retail Broking:

Various foreign banks like ABN Amro and others are planning to enter the Indian
retail brokerage industry.

Online Trading Competes with Traditional

Brokerage:
There is an increasing demand for online trading due to consumers growing
preference for internet as compared to approaching the brokers.

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Threat of New Entrants

Entry of Foreign Players
New forms of trading including T+2 settlement system, dematerialization etc are
strengthening the retail brokerage market and attracting foreign companies to enter
the Indian industry.Threat of Substitutes

Alternative Investment Options

Various alternative forms of investment including fixed deposits with banks and post
offices etc act as substitutes to retail broking products and services.
Buyer Power

Lack of Expertise Curtails Bargaining Power

Retail investors often lacks the knowledge and expertise in the financial
sector that calls them to approach the broking houses.

Low Product Differentiation Proves Beneficial:

The retail broking services provided by the various companies are homogeneous
with very low product differentiation. This allows customers to enjoy a greater
bargaining power.

Supplier Power
Increased Dependence on IPOs
There is a growing dependence of corporate on broking houses with the rising
number of IPOs coming to the market.

2.1.9 FINANCIAL

PERFORMANCE

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Competiiors
INDIABULLS
INDIA INFOLINE
EDELWEISS CAP
MOTILAL OSWAL F
IIFL
FUTURECAPITAL
NETWORK 18
GEOIIT BNP
DELTA CORP
ICICI Bank

LAST PRICE
271.80
152.95
46.90
207.75
620.30
305.50
50.75
37.80
92.15
1460.00

LAST PRICE
1600
1400
1200
1000
800
600
400
200
0

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LAST PRICE

2.1.0 Procedure for entertaining a client in IIFL

1.Any customer who has a portfolio having more than 30 lakhs can request for wealth
management services at any branch of IIFL.
2.After the request of customer the wealth mangment 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 profilier 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
b. 8 Photographs
c. One Address Proof
5. The client has to open four accounts with the IIFL :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 purachase 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 lumpsum but it is invested in trenches in a
period of 4 months.
7. The service provided by the IIFL is a Non- Discretionary type of service, in which the decision
of investing money is taken with customer recommendation.
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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 portfoilio + 0.75 % brokerage either sell

or buy .

No charges on mutual fund portfolio .(Asset management Companies gives 2.5% commission to
IIFL 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 IIFL.

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Chapter 3 - Analysis and Interpretation

Purpose of study
In wealth management sector many financial institutions have come up other than
IIFL and a heavy competition is present in the market. The challenge faced by IIFL is
to know whether its customers are aware of its wealth products are not. They also
wanted to know the reasons of the customers for not investing in IIFL, the basic
investment objectives of the customer and also their perception of investing on
wealth products. The study also includes the wealth managers reviews on wealth
management and their customer experiences.

3.1 - Research Design

The research design of customer wealth product awareness is descriptive in nature
since it provides an answer to below questions:
Who is considered?
The potential customers who are part of IIFL bank.

What information should be obtained?

To know the customers interest, knowledge and investment activities in wealth
management.
To know the primary objectives of the customers behind wealth investments.

Why are we obtaining the information from respondents?

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To know the effectiveness of the organization in wealth management department

and to know drawbacks if any

In what way are we going to obtain the information?

The information is obtained through a structured questionnaire through personal
interview of the respondent.

Primary data is collected by taking the responses of the IIFL customers with an aid
of a structured questionnaire.
The research design for the wealth managers is explorative since informal
interviews are taken from them.
3.2 Data Analysis

Research Questions
Customer wealth product awareness
The basic objectives of this research are:
To know the awareness of IIFL customers regarding IIFL wealth management.
To know the primary investment objectives of the customers.
To know the major competitors of IIFL.
To know the customers perception about investing on wealth products.

Wealth Managers Reviews

The basic objectives of this research are:
To know the wealth managers reviews on their clients. To know the
problems faced in wealth management

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Participants
The participants in my research are potential customers of IIFL bank, Hyderabad
who walked in to the bank and who generally have a basic idea about wealth
management. The sample size of customers is 35.
And also wealth managers who are part of IIFL Advance, Hyderabad are part of
my research. The sample size taken is 15.

Data Collection
The data of customer wealth product awareness is collected by marking the
responses given by the potential customers of the IIFL bank. It is done my meeting the
walk in customers personally in the branch and collecting the data with the help of a
structured questionnaire of which the results are discussed later in the report. The
questionnaire method was selected because it translates the information needed into a
specific question that the respondents can and will answer. The questionnaire motivates
and encourages the respondents to become involved in the interview to co-operate, and
to complete the interview.
The data is also collected from the wealth mangers of the same bank regarding the
wealth management by taking the informal interviews in the IIFL bank itself.

Instrument Used
The research instrument used for understanding the wealth product awareness
and wealth management of IIFL Ltd. are closed ended questionnaires of 10 questions
excluding demographics.

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The research instrument used to understand wealth managers reviews are open
ended informal interview of 9 questions.

Review of Methodology
The survey was conducted through personal interviewing the potential customers
of the IIFL Ltd. who had walked in to the bank with an aid of personal questionnaire. The
prime intention of the survey was to know the how far the customers of IIFL are satisfied
to have their investments in wealth management sector of IIFL and the primary motive
of the customer to invest on wealth products. The sample size is 35. The data analysis
is as follows.
Results of Research Questions
Q1) Are you aware of the wealth products provided by IIFL?
: Percentage of Awareness
Frequency Percent
Valid Yes

21

60.0

No

14

40.0

Total 35

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100.0

Total

No

Frequency
Percent

Yes

10

15

20

25

30

35

40

Percentage of Awareness

From the above results it clearly says that 60% of the customers said that they are aware
and 40% of customers are unaware of wealth products provided of IIFL

Q2) If yes, what are the products you are aware of?

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: Types of wealth products at IIFL

From the above pie chart it is clear that
29% of the customers are aware of Mutual Funds. 24%
of the customers are aware of SIP.
15% of the customers are aware of Fixed Deposits. 7% of
the customers are aware of Broking.

25% of the customers are aware of Insurance

Q3) How did you get to know about these products?

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Source of information about the products

From the above pie chart it is clear that
70% of customers came to know about the wealth products through RM.
10% of customers came to know about the wealth products through advertisements.
17% of customers came to know about the wealth products through their Relatives and
Friends.
3% of customers came to know about the wealth products through other sources.

Q4) Does any employee from IIFL have ever contacted you before regarding wealth
management?
Prior information to customers by IIFL employees

Valid yes
no

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Frequency

Percent

29

82.9

17.1

Total 35

100.0

Total

No

Percent
Frequency

Yes

10

15

20

25

30

35

40

: Prior information to customers by IIFL employees

From the above results it clearly says that 82.9% of the customers said that employee
from IIFL tried to contact regarding the wealth management.

Q5) Are you interested to know about the wealth products offered by IIFL?
Customers interest to know about IIFL products

Valid yes
no

Frequency

Percent

17.1

29

82.9

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Total

35

100.0

Total

Frequency

No

Percent

Yes

10

20

30

40

50

60

70

80

90 100

: Customers interest to know about IIFL products

From the above results it clearly says that only 17.1% of the customers said that they
are interested to know about the IIFL wealth products and the remaining 82.9% are not
interested.

Q6) Have you already invested in wealth products in any bank?

Percentage of customers done investments in bank

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Valid

Frequency

Percent

Yes

34

97.1

No

2.9

Total

35

100.0

30
25
20
Frequency

15

Peercent

10
5
0
1

Percentage of customers done investments in bank

From the above results it clearly says that 97.1% of the customers said that they have
invested on wealth products of some bank and only 2.9% did not invest. Out of 35, only
one customer did not invest on wealth products in any bank

Q7) In which bank did you invest?

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Percentages in terms of investments in different banks

From the above pie chart it is clear that
30% of customers invested in IIFL.
19% of customers invested in ICICI.
19% of customers invested in HDFC.

32% of customers invested in OTHERS(SBI, IDBI etc).

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Q8) Why not IIFL?

Reason behind not investing in IIFL

From the above pie chart it is clear that
59% of customers are unaware of the products at the time of investment. 41%
of customers did not invest due to different reasons.

Not even a single customer gave the reason lack of RMs interaction

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Q9) What is your primary investment objective?

Primary objective of customers behind investments

From the above chart it is clear that
20% of customers primary objective is to earn inflation adjusted returns.
22% of customers primary objective is to preserve the initial capital.

23% of customers primary objective is to maximize the long term potential

growth.
8% of customers primary objective is to earn regular income.
27% of customers primary objective is to earn a supplement and possibly some
capital gain.

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Q10)On a scale of 1 to 5, how do you rate investment on wealth products is a wise

option?
Rating of wealth management by customers
Frequenc
y

Valid
1
2
3
4
5
Total

Percent
2

5.7

2.9

25.7

19

54.3

11.4

35

100

100
90
80
70
60
50

Frequency

40

Peercent

30
20
10
0
1

Total

From the above bar diagram the percentages are as follows:

5.7% of customers rated 1.
2.9% of customers rated 2.

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25.7% of customers rated 3.

54.3% of customers rated 4.
11.4% of customers rated 5.

Chapter 4 - Findings, Recommendations & Conclusions

4 - Summary of Findings
1. The level of awareness of the IIFL customers towards its wealth products is 60%
which is less.
2. Most of the customers are aware of SIP and insurance. The percentages are as
follows.
29% of the customers are aware of Mutual Funds.
24% of the customers are aware of SIP.
15% of the customers are aware of Fixed Deposits.
7% of the customers are aware of Broking.
25% of the customers are aware of Insurance.
3. It was found from the data that customers are mostly into other banks when compared
to IIFL. Investments are mostly done with other banks.

4. The main objective of the customers to invest on wealth products is to have an

supplement income and most probably some capital gain.
5. Most customers reacted positively regarding investments on wealth products. They ranked it
high to say that investment on wealth products is a wise option.

6. Generally the customers who are aware of these products provided by IIFL came to
know through mostly through RM only.
7. The general reason behind customers not investing in wealth products in IIFL was
derived to be lack of knowledge at the time of investment.

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4.1 - Findings from wealth managers Informal Interviews

As part of my primary research, I took some informal interviews from the wealth
managers. The sample size is 15 managers who are part of IIFL Advance.

On basis of Wealth manager Survey we able to analyze following things

Customers have moderate level clarity about wealth management concepts like
stocks, mutual funds etc.
The main basic objectives of clients for availing wealth management services are to
have capital appreciation with less risk ie., secure investments. They also do this
planned investment in order to fulfill the future needs like car, house etc.

Customers are more concerned with risk and return, tax protection from wealth
management process.
Customer ask question related to how their wealth is managed, details about the
investment product etc.
Customers are mostly interested to invest in Mutual Funds and SIPs mainly.

Customers mostly availing this wealth management services are doctors,

businessman, private employees by profession.
Average age of customers availing wealth management services is 35-60yrs.
Average size of wealth managed per each customer is around Rs 5-30 lakhs.

Wealth manager see very huge potential market in middle income group which
have monthly income of 50k to 1lakhs.
Wealth Manager face challenges in area of trust building, awareness, competition.

The major problems in the wealth management sector are very dynamic markets
and having the consistency in payments by the customer.

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 The problems can be overcome by convincing the customers, going for long term
investments, investing in sectors where you have low risk low returns.

4.2 - Discussion of Research Questions

Customer wealth product awareness
Understand the level of awareness of the IIFL wealth products.
Wealth management is still in the emerging stages in India, though I took the
responses from potential customers of IIFL only 60% are aware of wealth
products provided by IIFL. It is to say IIFL is performing in the moderate level and
IIFL should take necessary measures.

To know the primary investment objectives of the customers.

An individual invest on different wealth products in order to have some
returns. The customer who wants to get high returns in short term should
go for high risks. The customer who want to play safe should either go for
long term investment or low risk investments which might give low returns.
Through my research I found that the basic motive of customers to invest
in wealth products is to earn a supplement and possibly some capital gain.
To know the major competitors of IIFL bank.
IIFL is facing a lot of competition from different banks. The major banks
like HDFC, ICICI, SBI, Reliance Mutual Fund are the major threats for IIFL
Bank. This is because less connectivity of IIFL. Place is playing a major
factor and also the services too.

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To know the customers perception about investing on wealth products. Perception

change from person to person. Basically I took the ratings of the customer on a
scale of 1to 5 whether investing on wealth products is a wise option or not where
1 is the lowest rating and 5 being the highest. It was found through the research
that many people have positive perception on these investments so many
customers rated 4 and 5.

Wealth managers reviews

To know the wealth managers reviews on their clients.
This is basically to know the reviews of their clients regarding the conceptual quality of
their clients, clients basic objective etc. through the informal interviews taken I came to
know that clients are moderately matured in terms of conceptual clarity.
To know the problems faced in wealth management.
There many problems and challenges faced by the wealth managers and the risks
involved in wealth management sector like market fluctuations etc.

4.3 - Recommendations
IIFL should target the mass affluent segment and satisfy their wealth management
needs through innovative financial solutions.
IIFL should also start promotion campaigns about wealth management and importance
of investments on wealth products because many people are unaware of these
services.
IIFL should increase its branching across the major cities in India because presently its
operations in India are very less.
IIFL should start providing more customization as other banks like HDFC, ICICI do so

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that it can compete with them.

IIFL should build upon its strengths and enhance its competitive advantage to stay
ahead of competition.
The Relationship Managers must be made aware of the importance of activity
management. The habit of daily reporting and monitoring of activities should be
promoted.
A number of global marketing initiatives act as opportunities because it will continue to
build the IIFL brand.
Wealth management is still emerging in India so it will be good for IIFL if it takes the
initiative and work on it to capture the maximum share.
IIFL can increase its share of the non-resident Indian business by providing more
convenient and comprehensive cross-border banking services to them.

New branch banking licenses have been granted to foreign banks such as Australia
New Zealand Bank, National Australian Bank, Commonwealth Bank of Australia and
Credit Suisse. Competition will continue to be tough with local players, both in the
private and public sector, so IIFL should be aggressive before these banks become.

4.4 - Limitations
My research was undertaken only in Hyderabad Region.
Response bias might distort the data being collected.
As wealth management is not popular in India, customers are not totally
aware of it.

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4.5 - Implications for Practice

Thus as discussed in the project, wealth management is emerging in India, and it is

very necessary to educate people regarding it and its products. The awareness must
be created. IIFL can do this by conducting campaigns in private offices, corporate
etc. through this it can create awareness in the literates. Even it should target
industrialists and business man by conducting many promotions. IIFL is now doing

airport advertizing program it should expand this program.

They also should improve their operations in India so that they can increase their
market share and also create convenience to the existing customers.

4.6 - Implications for Future Research

The concept wealth management is in the earliest stages in India. So after creating
awareness about this in India and once the wealth management reaches the boom this
research with bit changes in the questionnaire can be done again to know how
effectively IIFL is performing in wealth management and the data collected then will be
more reliable. Then the research can be conducted not only in the metropolitans but
also it can be carried out in many cities.
4.7 Conclusion
Wealth managers are beginning to investigate innovative segmentation methods to manage the
changing client profile. Over the next 20 years wealth managers will hone their segmentation
methods. Wealth managers will develop segmentation as a service efficiency initiative. Segmentation
models will apply holistic criteria to wealth management. The most important segments globally will
be entrepreneurs and SMES/ CEOs. Financial advisers will become an important separate client
segment for wealth managers The organization of direct client ownership will also change
Availability and flexibility will become vital components of the business model Internal restructuring

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will aim to integrate client services. The rise of the mass affluent represents an opportunity for wealth
managers in the medium term Wealth managers will capture the higher value mass affluent market by
offering a scaled down wealth management service. The mass affluent proposition will run along the
lines of the current wealth management service. Liability management is currently not part of the
wealth management agenda but has proven potential. Clients in developed markets are seeking more
holistic wealth management services Liability management is clearly a profitable area with a proven
existing client base. The incorporation of lending into wealth management will shift the focus of the
service. Specialist forms of lending will fail due to a persistence of the asset focused service model
and a lack of commitment. There are significant benefits in the area of liability management for the
wealthy, and that the importance of liability management as part of wealth management will
inevitably grow over the next 20 years, until it becomes a key service area. Rising income and wealth
inequalities, if not matched by a corresponding rise of incomes across the nation, can lead to social
unrest. An area of great concern is the level of ostentatious expenditure on weddings and other family
events. Such vulgarity insults the poverty of the less privileged, it is socially wasteful and it plants
the seeds of resentment in the minds of the have-nots.

I am much thankful to india infoline for providing me the opportunity for doing training
programme in the organization as management trainee. While doing my sip in the reputed
broking firm India infoline I had got a chance for knowing and analyzing the share market. I
was also able to know about the business environment and business ethics of the business
world. I also came to know about what does a firm or an organization require or wants from
a employee or a trainee. From the survey, I found that India infoline is in the top three
position in the share market.

Wealth Management

References
Websites
www.indiainfoline.com
www.5paisa.com
www.nse.com
www.moneycontrol.com
www.google.com.
www.wikipedia.com
www.investopedia.com
www.economictimes.com
www.businessworld.com
www.ebsco.com

Book source

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Financial management
- Khan & Jain.
Principal of financial management
-Prassana Chandra

Business Environment
- Francis Cherunilam
Annual report of indiainfoline

ANNEXURE1
Questionnaire for wealth product awareness
Demographic Details:
Name: _______________________________________________
Age: ___
Sex: Male Female
Occupation: ______________________

Wealth Product Awareness:

1) Are you aware of the wealth products provided by IIFL? o Yes
o No (if no, go to question 4)
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2) If yes, what are the products you are aware of?

Mutual funds SIP (Systematic Investment Plan)
Fixed Deposits Online Broking
Insurance
3) How did you get to know about these products? o
RM
o

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Relatives/friends

o If any other, please specify ________________

4) Does any employee from IIFL have ever contacted you before regarding wealth
management?
Yes No

5) Are you interested to know about the wealth products offered by IIFL?
Yes No
6) Have you already invested in wealth products in any bank?
Yes No
7) In which bank did you invest?
IIFL ICICI HDFC OTHERS, SPECIFY______
8) Why not IIFL?
o Unaware of the products at the time of investment. o
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Lack of RMs interaction.

o If any other, please specify
9) What is your primary investment objective?
To earn inflation adjusted returns.
To preserve the initial capital
To maximize the long term growth potential
To earn regular income
To earn a supplement income and possibly some capital gain
10) On a scale of 1 to 5, how do you rate investment on wealth products is a wise
option? (1-lowest, 5-highest)

ANNEXURE2
Questionnaire for Wealth Managers (Informal Interviews)
Name of the Wealth Manager:
Age:
1. What is the level of conceptual clarity of clientele about the Wealth
Management?

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2. What is the basic objective of client while availing the services of wealth
management?
3. What are the concerned areas of the clientele regarding wealth management?
4. What are the kinds of questions asked by clients before or after taking services?

5. Which are the maximum services used by clients?

6. Details related to Client Profiles
Average Age :
Average size of their wealth
7. What are the opportunities unexplored as yet in wealth management?
8. What are the problems faced in the wealth management sector?

9. How do you overcome the problems faced?

Wealth Management