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Chapter 2. ORGANIZATION PROFILE
2.1 History of Organization
(Alparambha: Kshemakara) – It’s always advisable to make a small and humble
beginning. It ultimately pays off handsomely in the long run. The concept of Single Window Services (SWS) came out of a need to provide a customercentric, hassle-free and highly reliable package in an environment of complete trust and credibility. Promoted by a highly qualified technocrat with a keen eye for financial markets, SWS today is a symbol of quality, reliability and, above all, complete credibility. The products and services offered by SWS encompass a vast array of financial options such as Life & General Insurance, Mediclaim, Deposit schemes from reputed corporate houses, Postal & other Savings Schemes, Automobile, Home & Personal loans, Mutual Funds and, above all, all forms of policy servicing. The SWS was incorporated in 1994, and the certificate of Commencement of Business in 1996. The age-old wisdom, which has percolated over generations, has proved its efficacy time & again in whatever ventures we pursue. This, precisely, is the philosophy that is followed at Single Window Services, a complete solution provider for all your financial needs, future provisions and planning. It has been our constant endeavors, as the name aptly suggests, to provide a complete bouquet of financial services to all our clients; be it life or general insurance, or a multitude of investment options available in today’s ever-expanding world; or simply future planning with some specific goal in mind via a single interface. Although most professionals today tend to think that they have adequate life and health insurance cover, the ground realities prove otherwise. In most cases, this realization comes too late. In order to overcome this problem, SWS has adopted a unique methodology of Investment
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& Insurance Audit for all its clients. This helps them realize their actual value and take appropriate corrective steps well in time. In today’s ever-changing world, keeping up-to-date is mandatory at all levels of functionality. Training & Orientation Activity, therefore, has become an inseparable part of any enterprise. SWS, apart from offering turn-key, single-stop financial services, has also provided for a comprehensive facility that can be used for conferences, meetings, training & orientation seminars, mini-exhibitions, on-line examinations, etc. With a capacity that can accommodate 30 participants, the centrally air-conditioned Training Hall at SWS provides the best of audio-visual facilities combined with comfortable seating and a soothing ambience to help make any program a grand success. A state-of-the-art public address system, provision for multiple computer terminals, slide & LCD projector, broad-band connectivity, fully-adjustable lighting system and piped music that soothes and enhances participants’ mood are just a few of the features that go hand in hand with the conference-cumtraining hall at SWS. The Training Division at SWS also offers you a one-stop solution combining catering, stationery and other support services when you organize events at SWS Training Hall. While the facility is conveniently located (just 2 minutes’ walking distance off College Road), the professional support services play a key role in the success of any event. The Training Division maintains a database of professional trainers / facilitators in various subjects and can also organize training schedules suited to your specific requirements. You can choose from a variety of pre-designed course options or request for a custom-designed training program. A number of options combining subjects such as Communication Skills, Selling Skills, Value Engineering, Personal Total Quality (PTQ), Business Ethics, etc. are currently available with the services of experienced facilitators associated with SWS. We, at SWS, are committed to provide one-stop quality services to all our customers. We sincerely believe that ‘Excellence is the best bargain you can offer’!
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2.2 Organization Flow Chart
Chief Financial consultant
Back Office Staff
Chief Tax consultant
4 Services Offered by company • • • • • • • • LIFE INSURANCE GENERAL INSURANCE MUTUAL FUND STOCK TAX ADVISORY @ FINANCIAL PLANNING CLAIM SETTLEMENT SUCCESSION PLANNING. ALLIED SERVICES IN THE FORM OF NETWORK 12 .Single Window Services 2.3 Objective of company In next three years.. support and back-up services and providing fair return on their investments and savings. 2. Achieve a high level of client satisfaction through value-added services like comprehensive financial planning. the Most Preferred Financial Advisor in Nashik and surrounding districts..
Single Window Services Chapter 3 INTRODUCTION TO FINANCIAL PLANNNG Each one of us needs ‘finance at various stages of our life & to ensure that we have the money available at the right time when needed. Financial planner can guide individuals to achieve their ultimate aim of spending retire life peacefully without compromising living standards. Buying a home providing for a Childs education or marriage or retirement. Financial planning is process that helps a person work out where he or she now. The process involves gathering relevant financial information. what he or she may need in the future & what he or she must do to reach the defined goals. The objective of financial planning is to ensure that the right amt of moneys available in the right hands at the right point in the future to archive an individual’s financial goals. grow. other lifestyle objectives systematically without any anxiety. Or money will be needed simply at the time of retirement. and not later! Or at the time of medical emergency and again at the time as later the money helps. We need finance at different times for different goals. Are examples of goals in life that can be measure in monitory terms? Every individual can benefit from objective help to create.. examining the person’s current financial status & coming up with a strategy & plan for how the person can meet his or her goals given the persons current situation and future plans. A Qualified financial planner will provide advice on: • • • • • • • Systematic savings Cash flow management Debt management Asset allocation for investment Managing risk through insurance planning Tax strategies to increase inventible surplus Distribute residual wealth through estate planning. We may need money at the time of marriage of a daughter or son & we need money at that time only. 13 . setting life goals . Successful financial planning makes a considerable contribution to the sum total of human happiness.
retirement planning. risk mgmt. tax planning. estate planning. Definition’ Financial planning is process of – • • • -Identifying person’s financial goals -Evaluating existing resources current financial position -Designing the financial strategies that help the person achieve those goals Financial planning includes investment planning. retirement planning. wedding planning. tax saving etc. To protect the wealth & also create & make a growth in the client’s wealth Some other goals of financial planning are education planning.Single Window Services 3. foreign tour planning. 14 . AIMS OF FINANCIAL PLANNING The first & basic aim of the financial planning is.1 DEFINITION & SCOPE. Financial planning is a highly personalized service where you need to understand not only the total picture of client’s financial position but also his behavior attitude & risk profile. NEEDS Financial planning is a highly personalized service where you need to understand not only the total picture of client’s financial position but also his behavior attitude & risk profile.
and its effective use in paying for current living expenses and in accumulating assets which will be used in meeting financial goals. 15 . What is Included? • Cash Flow Management This aspect of planning deals with the day to day allocation of income. when possible. It must be: • • • Coordinated Comprehensive Continuous Financial planning is like all other phases of life. estate and inheritance taxes. it involves choices Spend now or save for later? Pay off existing bills or increase retirement savings? Focus savings money on short term or long-term goals? A true financial plan does not focus one aspect or product. minimizing these taxes." In order to be effective this "plan" must take into consideration an individual’s overall picture. but instead seeks to take all areas of planning into consideration when making financial decisions.Single Window Services Fundamentals of Financial Planning Financial planning is the process of solving financial problems and achieving financial goals by developing and implementing a personalized "game plan. and. • Tax Planning and Management This area focuses on the understanding of and application income tax law.
The modifications as per the market conditions as & when required are implemented 16 . and personal savings accumulation plans. planning for college. After implementing the plan the monitoring & regular preview of the plan is done. • Estate Planning and Management The final phase of planning is for the transfer of assets to our heirs with minimization of taxes and other costs. After selecting appropriate alternative. assist the client to develop his goals. These could include buying a home. Develop & suggest various alternatives. Task of financial planner Task of financial planner is to make a good client planner relationship.Single Window Services • Risk Planning and Management This area of planning deals with the risk of losing life. strategies to archive client’s goals. implementation of the financial plan is take place. It includes the use of insurance products and strategies. analyses the data. Retirement strategies encompass the understanding of the employersponsored retirement plans. or providing for retirement. or property. evaluation of various alternatives & selection of appropriate alternative. income. collect all related financial data. • Investment Planning and Management Almost everyone has accumulation goals for which investments must be made and managed. • Retirement Planning and Management By far the most common accumulation goal is the ability to become financially independent.
Single Window Services Planning By Keeping Life Stages In Mind Single Family Retirement Leaving School Earner Marriage Buying House Providing For Family Retirement Student 1st Job Marriage House Kids Education Retirement 17 .
It analyses your financial status.Single Window Services Process of financial planning • • • • • • Establishing & defining the client planner relationship Gather client data including goals Analyze & evaluate your financial status Develop & present financial planning recommendation Implement the financial planning recommendation Monitor the financial planning recommendations Benefits of financial planning • • • • • • Security through future planning Analyses every aspect of your financial situation Identified weaknesses & suggest improvements Reduces stress Proper documentation for audit available Prepares everyone to defeat inflation Financial planning is beneficial for secure the future of the client through planning his future goals.all this process reduces stress of the client 18 . Financial planning makes available the proper documentation for audit . financial status. identify your weaknesses & suggest improvements.
Diversification is possibly the best way to reduce the risk in a portfolio. Advantages of having Diversified Portfolio • • • • A good investment portfolio is a mix of a wide range of asset class. 19 . There have been all sorts of academic studies and formulas that demonstrate why diversification is important. you may still have the stability of the bonds in your portfolio. you will reduce the risk of your entire portfolio getting affected by the adverse returns of any single asset class. However. Different securities perform differently at any point in time. silver and even real estates etc. your entire portfolio does not suffer the impact of a decline of any one security. shares. fixed deposits. debentures. fixed deposits and mutual fund units. for most investors a portfolio has come to signify an investment in financial instruments like shares. mutual fund units to items such as gold. but it’s really just the simple practice of “NOT PULLING ALL YOUR EGGS IN ONE BASKET. When your stocks go down. Items that are considered in the portfolio can include any asset. It is designed to minimize the impact of any one security on overall portfolio performance.” • If you spread your investments across various types of assets and markets.Single Window Services Meaning of Portfolio A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving investor’s goal(s). debentures. Diversification of Portfolio It is a risk management technique that mixes a wide variety of investments within a portfolio. so with a mix of asset types.
For our purposes. These six steps are: 20 . ranging from the value of their services in the workplace to tangible assets to monetary assets. Funds to be invested come from assets already owned. obtaining the most from it. you can work out where you are now. we expect to enhance our future consumption possibilities. such as education funds for children or by ourselves. investment will mean a measurable asset retained in order to increase one’s personal wealth. taxes and other factors. borrowed money. What Process Do We Use to Invest? The financial planning process consists of six steps that help you take a "big picture" look at where you are financially.Single Window Services What is investing? Investment refers to a commitment of funds to one or more assets that will be held over some future time period. Regardless of why we invest we should all seek to manage our wealth effectively. possibly in retirement when we are less able to work and produce for our daily needs. This includes protecting our assets from inflation. Almost all individuals have wealth of some kind. Anticipated future consumption may be by other family members. Using these six steps. and savings or foregone consumption. Why invest? We invest to improve our future welfare. Anything not consumed today and saved for future use can be considered an investment. By foregoing consumption today and investing the savings. what you may need in the future and what you must do to reach your goals.
Establishing and defining the client-planner relationship. based on the information you provide. 21 . The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. Depending on what services you have asked for. 2. including goals. current insurance coverage. The planner should also listen to your concerns and revise the recommendations as appropriate. The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. The financial planner should clearly explain or document the services to be provided to you and define both his and your responsibilities. investments or tax strategies. 3. 4. The planner should explain fully how he will be paid and by whom. this could include analyzing your assets. You and the planner should mutually define your personal and financial goals. Analyzing and evaluating your financial status. Gathering client data. understand your time frame for results and discuss. The financial planner should offer financial planning recommendations that address your goals. how you feel about risk. if relevant. liabilities and cash flow. The financial planner should gather all the necessary documents before giving you the advice you need. Developing and presenting financial planning recommendations and/or alternatives. The financial planner should ask for information about your financial situation. You and the planner should agree on how long the professional relationship should last and on how decisions will be made.Single Window Services 1.
if needed. 8. If the planner is in charge of the process.Single Window Services 5. Implementing the financial planning recommendations. The planner may carry out the recommendations or serve as your "coach. she should report to you periodically to review your situation and adjust the recommendations. 22 . Don't set measurable financial goals. Think that financial planning is for when they get older. 4. Think that using a financial planner means losing control. as your life changes. Common Mistakes. 6. 9. You and the planner should agree on how the recommendations will be carried out. Neglect to re-evaluate their financial plan periodically. Expect unrealistic returns on investments. 5. Wait until a money crisis to begin financial planning. 2." coordinating the whole process with you and other professionals such as attorneys or stockbrokers. 7. 3. 10. Think that financial planning is the same as retirement planning. 6. Think that financial planning is only for the wealthy. Confuse financial planning with investing. Monitoring the financial planning recommendations. It may be helpful to be aware of some common mistakes people make when approaching financial planning: 1. Believe that financial planning is primarily taxed planning. You and the planner should agree on who will monitor your progress towards your goals.
Single Window Services INVESTMENT OPPORTUNITIES IN INDIA From the Investment point of view following are the main opportunities available for Investment in India. Mutual Fund. Postal Schemes for Investment. 23 . These Investment opportunities include – I. Stock Market. each of these schemes fulfills the objectives of investors and these schemes having its own advantages and disadvantages but by combining all these major investment schemes we can make the best portfolio for investor which fulfills the expectation and financial goals of the investor. IV. Debt market. Insurance. V. III. VI. Real Estate. II.
Stock Market – Stock markets refer to a market place where investors can buy and sell stocks. if invested for long term in the growing market is able to give you the handsome returns compared to other investments. high supply and low demand) for the stock of ABC Co. Ltd. • • • Investor can receive the benefits of dividend or bonus shares. The price at which each buying and selling transaction takes place is determined by the market forces (i.e. 24 . less supply). commercial or global news can affect the market. its price will fall down. Ltd. On the contrary. ABC Co.e. Today the INFLATION rate is around 12%. More and more people would want to buy this stock (i. Disadvantages of investing in Stock/Share market • • suffering • Share market is very sensitive and highly volatile so there is high risk involved. buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co.e. after one year by the investor. As discussed earlier that the stock market is very sensitive and volatile so any political. Ltd. If the investment is made without having proper knowledge. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price.a. demand and supply for a particular stock). the chances of losses become very high.Single Window Services I.e. Example for a better understanding of how market forces determine stock prices. in the market. if there are more sellers than buyers (i. high demand) and very few people will want to sell this stock at current market price (i. Advantages of investing in Stock/Share market by Long Term Investment – • companies. in this scenario investment in the stock In the capital market there is no capital gain tax on the profit made by selling of shares One can expect assured returns of 25-30% p. Therefore.
debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Any change in the value of the investments made into capital market instruments (such as shares. Every Mutual Fund is managed by a fund manager.000 Then the NAV of this scheme = (A)/(B). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.e.e. 000 The total number of units issued to the investors is equal to 10.50 (i. Number of units held multiplied by the NAV of the scheme) 25 .Single Window Services II. a mutual fund cannot deviate from its stated objectives at any point of time. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. i.100. Mutual Fund Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invests the money thus collected into asset classes that match the stated investment objectives of the scheme.000/10. 100. For example If the market value of the assets of a fund is Rs. who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.000 or 10. When an investor subscribes for the units of a mutual fund. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool.00 Now if an investor 'X' owns 5 units of this scheme Then his total contribution to the fund is Rs.
Single Window Services Advantages of Mutual Fund for an Investor – • • • • • • • • • Portfolio Diversification Professional Management Less Risk Low Transaction Costs Liquidity Choice of Schemes Transparency Flexibility Safety Disadvantages of Mutual Fund for Investor – • • • Costs Control Not in the Hands of an Investor No Customized Portfolios Difficulty in Selecting a Suitable Fund Scheme 26 .
is termed as Insurer. In case a person actually suffers a loss on account of such risk.e. Insurance Insurance is a basic form of risk management. on a periodical basis (say monthly. INSURANCE COVERS Depending on the circumstances. A person who seeks protection against such loss is termed as insured. termed as premium. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums. Concept of Insurance / How Insurance Works The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In order to get the insurance. he is compensated out of the same pool of funds. you may need insurance in the following areas: • • • • • • • • Life Health Home Motor Personal Liability Professional Liability Business Disability 27 . annually. and the company that promises to honor the claim. the insurer) a certain amount. quarterly. the insured is required to pay to the insurance company (i. or even onetime). which provides protection against possible loss to life or physical assets.Single Window Services III. in case such loss is actually incurred by the insured.
Add non-recurring expenses like children’s marriage. 2. allowing for increases due to inflation and other factors. You need to assess the financial impact on your family if the breadwinner should die.Single Window Services LIFE INSURANCE: Life insurance is a risk sharing mechanism whereby a policy owner (the insured) agrees to invest some money with an insurance company that obligates itself to pay money to a beneficiary on the insured’s death. The Multiple Earning Method: The amount of life cover you should buy should be 3 to 10 times of your gross annual earnings. You can assess the in different ways. This is the surplus that you leave for your family and for your investments. Life insurance needs analysis: The first in determining what type of insurance to buy is a ‘needs analyses. Calculate the present value of the shortfall. Calculate the number of years left in your earning life (Retirement age-Current age) Project family expenses up to retirement. 1. Subtract any pension benefits that they might get at your death. It completely ignores your financial resources and needs. Calculate the shortfall in the total expenses and income. 28 . The ‘ Human Life Value’ Method: This method values human life at the present value of all future earnings potential. The steps for calculating the amount of cover under this method are as below: • • • • • • • • Deduct your personal expenses from your total income. It is a legal contract between an insurance company and policy owner.
These are: 1. 29 . your nominees receive the amount of your cover i. Pensions Plan 3. 2. FORMS OF LIFE COVER: Life insurance covers are availably three forms. The amount of the life cover under this Method is calculated by subtracting the total of your current financial resources from the present value of your family’s projected expenses. The ‘Needs’ Method: This method tries to calculate the amount required by your family to maintain their existing lifestyle and their financial goals. the sum assured. Investment-cum-insurance products • • • • Endowment plans Money-back plans Whole life plans Unit linked insurance plans 1. They provide with an alternate income stream after your retirement. PENSION PLANS: Pension plans are actually pure investment products. TERM PLANS: In the event of death in the policy period. You get nothing if you survive beyond the policy period. Each form exists for a different objective.e. Term Plan 2.Single Window Services 3.
WHOLE-LIFE PLANS: The term plan. the insured has the option to encash the maturity benefits pr continue the cover for his entire lifetime. Even if you survive the term. your nominee’s get the sum assured plus some returns. full sum assured along with bonus accruing on it is payable by the insurance company to the nominee of the deceased. However. spread over this time period.Single Window Services 3. The insured has to pay premium till a specified age. ENDOWMENT PLAN: They also offer some returns on the premiums paid by you. endowment plans and money back plan provide cover only till a specified age. 4. you still get back the sum assures and the returns. So if you die during the policy Term. and the sum assured is paid through periodical payments to the insured. MONEY-BACK PLANS: Money-back plans are a variant of endowment plans. A money back policy is generally issued for a particular period. 4. Whole life plan provides cover till end of life. the survival benefits are disbursed at the end of the policy term. In case of death of the insured within the term of the policy. On reaching that age. Part of the premium paid is linked to the policy period and the sum assured and the rest is invested. 5. while in money-back plans the payback is staggered through the policy period. Money back policy is a policy opted by people who want periodical payments. UNIT LINK INSURANCE PLANS: It can be considered as a combination of mutual funds and term plans. 30 . In case of the endowment plans. the premium charged for endowment plans is 5-6 times higher than the premium for term plan.
Single Window Services NON-LIFE INSURANCE TYPES OF NON LIFE INSURANCE: 1. PropertyDamage to property Loss of income Indirect losses 3. PersonalMedical Disability 2. LiabilityUnder statute Under common law Under contract 31 .
DEBT Debt is that parts of the total investment that will yield steady returns and provide an element of stability to the whole portfolio of the individual.Single Window Services IV. and deposits. Use of debt • • • • Used to bring in an element of stability in the picture Makes the investment a bit less risky than equity There is no cause for daily monitoring unless there is an intention to trade the instruments There is an element of surety about the returns when held till maturity and there is not credit default 32 . debentures. This is an important asset class as it is not just returns but the nature of the portfolio that has to be taken into Consideration for different individuals. Features of debt • • • • • • • • • • The returns here are in the form of interest Coupon rate determines the interest received for investors The yield is another important factor to look at Yield measure the return of an instrument that is held till its maturity Yield changes at different points of time depending upon market conditions Yield is relevant for traded debt instruments This will give the total return for debt Investors can put their money into debt directly or through mutual fund They are quite steady in returns There are various debt instruments like bonds.
the issuer is basically promising to repay the principal along with interest on a specified date. With a bond note. • The government.Single Window Services Bonds • • • A bond is a debt instrument issued for a period of one year or more. at the maturity of the bond. corporations and many other types of institutions sell bonds. This is a more conservative investment. The various types of Bonds are as follows: Zero Coupon Bond: Bond issued at a discount and repaid at a face value. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price. Treasury Bills: Short-term (up to one year) bearer discount security issued by government as a means of financing their cash requirements. No periodic interest is paid. The buyer of these bonds receives only one payment. also known as the maturity date. Bonds raise capital for the issuer by borrowing money from investors. The difference between the issue price and redemption price represents the return to the holder. 33 . states. cities.
70.50 200 7. Postal Schemes for Investment – Following chart will explain some of the popular schemes of Postal Department for Investment – Minimum Interest Scheme (%) (Rs.) National Savings Certificate Public Provident Fund 8.00 1. also available with public sector banks No tax benefit No tax benefit 9.50c 10 No limit No limit Available for 1.000 15 lakhs Single A/c: 1 No tax benefit Savings Bank Account 3.00a 100 (Rs) No limit 6-year tenure Section 80C benefit Section 80C benefit Investment Investment Features Tax Breaks Maximum 8. 5 years 5-year tenure 5 year tenure. 2.5 lakh Joint A/c: 2 lakhs Any individual can open an account. minimum age 55. No tax benefit Sec 80C benefit: Investments up to Rs 1 lakh in specified securities (maximum of Rs. tax-free returns Kisan Vikas Patra 8.5 Money doubles in 8 years. Cheque facility available.00d 1.41b 100 No limit Single A/c: 4.000 15-year term. monthly returns Monthly Income Scheme 8.00b 500 70. 3. 7 months No tax benefit No tax benefit 6-year tenure.Single Window Services V.000 in PPF) qualify for deduction A Compounded half-yearly b Compounded yearly c Compounded quarterly d Payable quarterly 34 .25-7.500 lakhs Joint A/c: 9 lakhs Time Deposits Recurring Deposits Senior Citizens Saving Scheme 6.
The India Real Estate Investment is facilitated by the liberal economic policies of the government. rising income.Single Window Services VI. Development of the special economic zones (SEZ). India Real Estate Investment involves minimum risk for getting maximum return. higher disposable incomes. • • • • Burgeoning IT and ITES industry Growing commercial property market Emerging hospitality or hotel industry due to the exceptional boom in inbound tourism and the IT sector. retail. easy availability of housing finance. leading to future real estate development in India. But maximum demand is observed in the booming IT sector. Real Estate Investment India Real Estate Investment is a significant feature of the Indian realty market under the initiation of the investors and developers. 35 . residential. The development of private ownership of property real estate in India has become a major area of business with India Real Estate Investment playing the vital role. India Real Estate Investment has rising demand in every sector like commercial. better job prospects and increase of nuclear families. • Growth of retail market in India due to increasing demand from retailers. industrial and hospitality. Factors Favoring India’s Real Estate Investment • Increasing growth in residential properties due to lower interest rates.
So Portfolio planner must have to find out the risk appetite of the client with the help of RISK ANALYSIS tool. which pays a bit higher interest. or high quality fixed income instruments. age.) 36 . Aggressive portfolios generally have a higher investment in equities. for the sake of this potential high return. which put safety at a high priority.Single Window Services 3. we'll look at samples of both a conservative and a moderately aggressive portfolio. Conservative portfolios will generally consist mainly of cash and cash equivalents. To demonstrate the types of allocations that are suitable for these strategies.are most appropriate for investors who. MODERATE.2 Presentation of the information either in Tabular form and / Graphical What are Risk Analysis and Portfolio Planning? Risk Analysis Risk analysis is very important tool for portfolio planning. are examples. By analyzing the risk of client the portfolio planner came to know whether the client is AGGRESSIVE. Basic Types of Portfolios In general. Money in a savings account and a certificate of deposit (CD). aggressive investment strategies . are most appropriate for investors who are risk averse and have a shorter time horizon. Note that the terms cash and the money market refer to any short-term. fixed-income investment. mentality. and CONSERVATIVE. have a high-risk tolerance (can stomach wide fluctuations in value) and a longer time horizon. The conservative investment strategies. (You can read more about the money market in the. because each persons risk appetite is different due to reasons like income level. financial goals and objectives.those that shoot for the highest possible return .
Your main goal with a conservative portfolio is to protect the principal value of your portfolio. Conservative portfolio: Conservative model portfolios generally allocate a large percent of the total portfolio to lower-risk securities such as fixed-income and money market securities. some exposure can help offset inflation. As such. since the goal is not to beat the market. Even if you are very conservative and prefer to avoid the stock market entirely.Single Window Services 1. these models are often referred to as "capital preservation portfolios". You could invest the equity portion in highquality blue chip companies. 37 . or an index fund.
but is willing to take on a higher amount of risk to get some inflation protection.Single Window Services 2. you chose securities that pay a high level of dividends or coupon payments. A common strategy within this risk level is called "current income". 38 . With this strategy. Moderately Conservative Portfolio: A moderately conservative portfolio is ideal for those who wish to preserve a large portion of the portfolio’s total value.
39 . Since these moderately aggressive portfolios have a higher level of risk than those conservative portfolios mentioned above. select this strategy only if you have a longer time horizon (generally more than five years). Moderately Aggressive Portfolio: Moderately aggressive model portfolios are often referred to as "balanced portfolios" since the asset composition is divided almost equally between fixed-income securities and equities in order to provide a balance of growth and income.Single Window Services 3. and have a medium level of risk tolerance.
To provide some diversification. so these portfolios' value tends to fluctuate widely. Aggressive Portfolio: Aggressive portfolios mainly consist of equities. investors which aggressive portfolios usually add some fixed income securities. 40 . your main goal is to obtain longterm growth of capital. As such the strategy of an aggressive portfolio is often called a "capital growth" strategy. If you have an aggressive portfolio.Single Window Services 4.
41 . your main goal is aggressive capital growth over a long time horizon. Very Aggressive Portfolio: - Very aggressive portfolios consist almost entirely of equities. Since these portfolios carry a considerable amount of risk. with a very aggressive portfolio.Single Window Services 5. the value of the portfolio will vary widely in the short term. As such.
insurance. portfolio planner discussed his proposed investment pattern with his client and after getting approval from him he actually invest his money. Portfolio Planner has the duty to keep regular watch on client’s portfolio.Single Window Services Portfolio Planning • • • • After analyzing client’s risk appetite portfolio planner starts his actual work of Portfolio Planning. • After making investment. 42 . realty investment and bonds etc. FD’s. Firstly portfolio planner finds out the goals and objectives of his clients for investing in the right direction. Then he designs the investment of his client in stock market. mutual fund. After designing the client’s portfolio. for making diversified portfolio.
Procedure for making Portfolio of the client – • • • • • • • • Fill up the Risk analysis and portfolio analysis of the client to know his/her personal and financial details. invest his/her money according to that. financial conditions. portfolio analysis and planning we need to study live cases to understand how it works and beneficial in practical life. objectives and financial goals – To study the risk analysis. Then understand his/her financial goals. Then prepare the Model investment Portfolio for client. objectives and goals. After this keep regular watch on clients Portfolio and make necessary changes wherever required. Then analyze the Risk Appetite of the client. After clients free consent for the proposed plan.2Data Interpretation and Analysis Sample Portfolio of different backgrounds. 43 . For this I decided to take live examples of different persons with different objectives. Then study the cash inflow and outflow pattern of the client.Single Window Services 3. financial conditions. After this study the existing Investments of the client.
Single Window Services Case. Satish Deshpande & Family ________________________________ 44 . ________________________________ Personal Financial Plan For Mr.
Single Window Services Introduction Goals and Objectives Current Financial Situation Assumptions Cash-Flow Management Risk management / Insurance planning Education Planning Retirement Planning Investment Planning Estate Planning Tax Planning Implementation / Action Plan Appendix 1: Personal Data Appendix 2: Personal Financial Fact-Finder 45 .
Within next 2-3 yrs she will stop her consultancy and focus on your children’s education and home.p. Pushpa’s income in mainly for her own savings and personal use.Total Assets now in July 2008 are Rs. 8182000/. Majority of the policies are Endowment and few Term Insurances.premium p. 1352000/. 4590000/. And paying almost 200000/. Your Net worth analysis shows a net worth of Rs.a. You are currently earning Rs. 3815000. Total 14 policies with sum assured Rs. You are very keen on insurance part. married to Pushpa age 39 recently.and liabilities of Rs. 3592000/- 46 . and main support for the family. you are 42 years old.Single Window Services Introduction Satish.a.
Any cash flow review should not significantly change your lifestyle.Single Window Services Your Objectives & Concerns 1. This includes covering all debts and having lump sums for generating income for the surviving family members. Lowering the standard is unacceptable. Education of both the children. Your goal is to retire at age 60. retirement. At that time you want maintain the standard of living same as before retirement for yourself and spouse. You are however not aware whether the current recourses are adequate to provide retirement needs. You have 2 sons. By. Risk planning & Management You want to have a complete family’s personal insurance program. Investment Planning Asset portfolio should grow at a rate. which supports the realization of the wealth accumulation goals for financial freedom (retirement) and education for children. Cash Flow & Net worth Management To have a significant cash flow surplus annually of around 15-18% of household gross income in order to provide a funding source for all future wealth accumulation targets. 4. Retirement Planning You have some personal savings. Your goal is to give them the Best quality of Education in best colleges in India. 2. 3. 5. 47 . you expect both of them to be independent and do not need financial support.
Estate Planning To have wills written for both husband and wife and to have a trust set up for the child. Good long term capital appreciation 2. Returns from investment should be tax free or with minimum tax 48 . Tax Planning To optimize tax savings under the Indian tax system.Single Window Services 6. 7. You are keen on using up all personal tax relieves and rebates and to have good income reallocation planning. Sub-Objectives 1.
Single Window Services
Current Financial Situation Cash Flow Analysis In-Flow Satish Income (after tax) Pushpa's Income (after tax) LIC Maturity Dividend Received Bank Interest Rs
1,352,040 165,000 134,000 20,000 2,100
Out-Flow Tax Payment Satish Tax Pushpa's Tax Subtotal Standard of Living Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments Personal Loan Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities Miscellaneous Subtotal Insurance Premium Satish life insurance Pushpa's life insurance Vehicle Insurance Other Insurance Subtotal Total Difference
225,000 0 225,000 212,400 79,764 225,144 235,392 19,000 12,000 6,122 48,000 12,000 50,000 60,000 69,500 1,029,322 108,264 57,901 12,686 21,000 199,851 1,454,173 218,967
Single Window Services
Cash out Flow is
1% 1% 4% 7% 5% 4% 3% 1% 3% 0% 1% 1% 16% 15% 15% 15%
Satish's Tax Car loan installments (Honda City) Car loan installments (Wagon R) House loan instalments Personal Loan Car maintenance House maintenance Credit Card payments Eating out Grocerie s Travel Utilitie s Miscellaneo us Satish’s life insurance Pushpa’s life insurance Vehicle Insurance Other Insurance
Single Window Services
Net worth Statement – Current
Assets Liquid assets: Cash in hand Saving account Fixed Deposits Mutual Funds Sub Total Non-liquid assets: Properties Equities PPF Cars Life insurance cash value Other Assets Sub Total TOTAL
Rs. 20000 116950 0 776000 912950 3500000 200000 1005789 800000 764053 1000000 7269842 8182792
Liabilities Home Loan Car loans Personal Loan
Rs. 1780000 456000 1356000
Single Window Services Net worth Statement – Current Assets 0% 1% 12% 9% Saving account Mutual Funds 9% Properties Equities 10% PPF 44% 13% 2% Life insurance cash value Other Assets Cars Cash in hand 52 .
a. Satish Mrs.Single Window Services Risk Management/Insurance Planning The current personal insurance summary is as follows: Person Mr. Pushpa Master Umesh Master Amey Plan type Endowment + Term Insurance Endowment Unit Linked Unit Linked Premium p. 92533/56550/6395/6351/Insurance Cover 3815001/1142653/75000/100000/- The current property insurance summary is as follows: Property Current House Cars Other Household Assets Sum Assured Not Insured Adequately Covered Not Insured 53 .
48% 8.00% 4.00% 1.50% 0.79 Total: 2 Portfolio Return: 9.14% Return Rate Weighted Return Rate Investments 4% 7% 35% 27% Saving Account Equities Life insurance Mutual funds PPF 27% 54 .862.81% 15.005.50% 1.07% 4.05 3 776.00 0 764.95 0 200.Single Window Services Investment Planning The following table lists out the portfolio of investment-grade assets currently owned and the portfolio return rate: Asset Saving Account Equities Life insurance Value Mutual funds PPF Rs 116.78 9 2.00% 2.00 0 1.20% 18.26% 3.
other than the nominations done for Mutual funds and Insurance policies. Estate Planning There is no arrangement of any nature including will and trust done. You have not really focused on this aspect. Education Planning It seems that you have not specifically allocated funds for education funding of your two sons. 55 . The other facts and data are collected in the “Personal Financial Fact-Finder” form as attached in the Appendices. It seems that your major focus is on your current profession and you have not given a thought on Retirement Planning.Single Window Services Retirement Planning There is currently no clear plan on retirement.
a. Equities investment rate of return at 18% p.Single Window Services Assumptions Following are the assumptions based on the facts and discussions with you. Property investment rate of return at 10 % p. Spouse’s income will stop within next 3 years. Investment-linked bond funds at rate of return of 7.a. on long-term basis. Investment-linked equities funds at rate of return of 15% p.a.a.5 % p. covering capital gain. Rate of inflation at 7 % per annum based on government official rate on Consumer Price Index. Pre-retirement investment portfolio rate of return should be 12% Post-retirement investment portfolio rate of return = 10% 56 . Your income will increase at the rate of 10 % per annum until age 60.
We will see any alternative available to reduce the EMI contribution.Single Window Services Recommendations Cash Flow Management The current cash flow surplus is very low at around 2 Lacs per annum. we have studied and done an analysis.This loan is also at lower side. Total outstanding amount is Rs. It comes out to be 6. Our analysis and recommendations: As you are living with your parents the household expenses are very much in control. In recommending changes. which is slightly on higher side. Personal Loan: . we have kept in mind some basic principles: Your lifestyle needs to be maintained as original as possible. As it is higher end car the loan rate is vary low. Any reshuffling of assets including paying off debts or loans must leave behind enough liquid assets that cater to the 3-6 months’ of emergency buffer fund. Car Loan (Honda City): .In this case the interest rate is almost same with other banks so there is hardly any scope for debt arbitrage. In your routine outflow the major contribution is of EMI of different loans. We should really appreciate that you don’t have any balance on credit card. The average interest rate of all 3 loans comes out to be 16%. This is the area where we can think of repaying it earlier.7% only.This is taken from 3 banks at different time and at different rate. So its better we should keep it as it is. The loan will end in Aug 08 Car Loan (Wagon R): . Better to continue this loan without any change. House Loan: . Interest rate comes out to be 8%. Based on no change or very minimal change in lifestyle.In this case the loan was taken in 2003. 1356000/- 57 .
450000/.will be available which we will not utilize as LAS is fluctuating on market. Adding above 3 (587000+450000+319000) we will get Rs 1356000/We can close the personal loan from above amount. We will withdraw Rs.will be available at 13% we will utilize Rs. Total Loan available is around Rs. Surplus of Rs.from that. 38000/. Rs.e.we have a product called Loan against Securities. Currently PPF has much more amount getting 8%. 488000/. Your Insurance portfolio shows that majority of the policies are of Endowment type and few are Term insurances. 587000/-. We have taken out the Loan quotation for all those endowment policies. (LAS) current interest rate for that is 13%. 319000. Considering that we will repay the principle also then equivalent EMI will be 11338/- 58 . i. We can pledge all the investment in those against which 50% loan will be available. Loan interest rate is 9% Current value of your investment in Mutual Fund & Shares is Rs. Hence we can adjust the principle repayment in both the loans as per our wish. Another important point is in LIC loan interest payment is mandatory (4. 976000/.Single Window Services We have various options available to repay this loan. so it will act as buffer to adjust the market condition.5 % of loan amount half yearly) LAS is CC loan.
354.100 Out-Flow Tax Payment Satish Tax Pushpa's Tax Others Subtotal Standard of Living Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments LIC Policy Loan Loan Against Securities Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities Miscellaneous Subtotal Insurance Premium Satish’s life insurance Pushpa's life insurance Vehicle Insurance Other Insurance Subtotal Rs.000 212.000 12.986 108.303 59 .352.000 69.Single Window Services If the above reductions are implemented.000 0 225.901 12.686 21.837 318.673.000 20.000 134.144 69.764 225.Revised In-Flow Satish’s Income (after tax) Pushpa's Income (after tax) LIC Maturity Dividend Received Bank Interest Rs.000 50.864 19. 225.500 929.192 66.122 48.264 57.000 12. the new cash flow statement will look like the followings: Cash Flow Statement . 1.000 6.851 Total 1.04 0 165.400 79.000 2.000 60.14 0 Total Difference 1.000 199.
Single Window Services Revised Cash Out Flow Satish’s Tax 2% 1% 4% 8% 5% 4% 4% 1% 4% 0% 1% 1% 5% 5% 17% 6% 16% 17% Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments LIC Policy Loan Loan Against Securities Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities M iscellaneous Satish’s life insurance Pushpa’s life insurance Vehicle Insurance Other Insurance 60 .
From Rs. which can be used to fund your goals and objectives in life.000 4.000 456. 1.000 TOTAL NETWORTH 3.792 Here.18 Lacs surplus.000 587.18 Lacs. 61 . 2. 3. This surplus is necessary to do the funding.Single Window Services The new net worth statement after debt arbitrage will be as follows: Net worth Statement – Revised Assets Liquid assets : Cash in hand Saving account Fixed Deposits Mutual Funds Sub Total Non-liquid assets : Properties Equities PPF Cars Life insurance cash value Other Assets Sub Total TOTAL Rs.590. we can see a dramatic change in the cash flow surplus.273. as current assets may not be sufficient to do the task.000 450.780. 20000 116950 0 776000 912950 3500000 200000 686789 800000 764053 1000000 6950842 7863792 Liabilities Home Loan Car loans LIC Policy Loan Loan Against Securities Rs. we now have a surplus of Rs.
Single Window Services Revised Asset 0% 1% 13 % 10 % 10 % 9% 3% 44 % 10 % Cash in hand Saving account Mutual Funds Properties Equities PPF Cars Life insurance Value cash Other Assets 62 .
2. There are 2 types of liabilities.Single Window Services Risk Management/Insurance Personal Insurance You are keen to upgrade your family’s insurance program so as to meet the goal and objectives. which we should consider while deciding the Sum Assured. 1. there are certain responsibilities that you have to complete. Legal Liability Moral Liability Legal Liability Amount 1780000 456000 1356000 3592000 Head House Loan Car Loan Other Loans Total 63 . Calculations for Sanjay’s sum assured : • Death & Total and Permanent Disability As you are the breadwinner of the Family. 1.
6644000/b. Sanjay Legal Liability Moral Liability Less: Current insurance Less: Net worth of family on investment assets only i.Single Window Services 2. which will cover the pension of spouse also. a. Equities. Moral Liability Maintaining same life style of the family Based on principal liquidated basis: Family should get at least Rs.e. Mutual Funds. 20000/.86% Principle amount req. 854200 Mr. PPF. Cash Value of Insurance Additional insurance required Rs. today = Rs. Education of your children Present value of Future requirement of Education of both the children is calculated which comes out to be: Rs.Monthly. S/A. 3592000 7498200 3815001 2543792 4731407 64 . Rate of Return: 8% (Risk Free) Inflation: 5% Inflation Adjusted Rate of Return: 2.
husband will continue working and supporting the remaining family. a basic sum assured of = Rs. Therefore. To generate this income perpetually with 8% (risk free rate). the need of wife will be arbitrary as if something were to happen to her. 3700000 should suffice.Single Window Services For wife.e. disability cover is needed and it is recommended that disability income of Rs. death cover will not be an important need as the financial loss to the parents will be minimal. sum assured of half of husband’s amount (Moral Liability) i.per month per child be given. 65 . 4000/.is recommended for both the children Education Planning Table of cost for the degree program for Children. Wife Total basic sum assured needed Less: Current insurance Additional insurance required Rs. 600000/. Rs. However. 3700000 1100000 2600000 For the children.
8 590145.4 210485.2 225219.3 120058.1 168388.2 450438.4 450438.7 140255.4 128462.1 171818.44 104863.2 551537.4 128462.3 131079.100000/.44 104863.44 104863.per year & for Post Graduation is Rs.5 PG 200000 214000 228980 245008.2 280510.2 367691.6 140255.2 150073 160578.6 367691.5 289040.8 393430.3 420970.2 150073 160578.6 183845.7 112204.3 481969 Umesh Amey Net req For Umesh For Amey EMI for Umesh EMI for Amey HE 202866 248520 4855 2533 GR PG Total of EMI 622724 355663 8041 2433 761121 932307 4372 3372 17.3 481969 98003.3 300146.2 450438.2 240984. 200000/Considering 7% inflation in education amount required will be Sr.6 GR 100000 107000 114490 122504.7 157372.269/- 8399/25608/- Retirement Planning Financial Independence by age 60 Retirement income projection by Expense Method: 66 .8 393430.7 140255.3 481969 98003.7 343637.5 137454.3 343637.1 321156.2 270131.no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 HE 80000 85600 91592 98003.3 192787.1 210485.2 180175.1 120058.Single Window Services Cost required for tuition fees and living expenses for degree course today’s is Rs.1 171818.6 183845.6 262159.9 196715.9 147076.9 196715.1 210485.5 171818.
The amount of each expense is benchmarked at today’s price. we list out all the expenses that they projected they will incur when they retire.Single Window Services From fact-finding discussion held with James. 67 . All the figures are tabulated in the following table: Retirement Income . The future pricing is found by taking inflation into consideration at 7 % per annum.Projection by Expense Method Items needed when retired Food Clothing Cars maintenance Personal maintenance Medical Groceries Travel Utilities Life insurance Entertainment Medical Insurance House maintenance Total Today's annual cost 48000 20000 19000 24000 10000 12000 50000 60000 200000 30000 20000 12000 505000 Inflation rate 6% 7% 6% 7% 9% 7% 6% 5% 0% 7% 6% 5% Cost at age 60 137008 67598 54232 81118 47171 40559 142716 144397 200000 101397 57086 28879 2902161 The Expense Method is the more accurate method but relies quite heavily on the rate of inflation.
100000 150000 200000 250000 50000 Retirement 0 Retirement 68 Fo C od ar C Pe s m lo rs on ain thin al te g n m ai anc nt en e an M ce ed G ic a ro ce l r ie s Tr av U el Li f e til i i n t ie En sur s an t M ed erta ce H ica inm ou l se Ins ent m ura ai nt nce en an ce Single Window Services .
indefinitely. 69 . The second scenario will be the “economy scheme”.to have this retirement income perpetually without liquidating any of the principal amounts. Scenario 1: The principal intact scheme. we calculate the lump sum needed for such inflation-adjusted income generation. In layman terms.Single Window Services Finding the lump sum for retirement: To find the lump sum to generate this projected retirement income is sufficient. You need Rs 29021610/. The amount looks very high. based on the inflation-adjusted discount rate I. we first select the annual retirement income calculated from the Expense Method at Rs 2902161/Then we work into two scenarios on the length of time this income is needed. Here. The Rs. this is the “deluxe scheme”.e.annual retirement income is to be needed perpetually i. 2902161/.
10 – 0. based on the inflation adjusted rate of return i.07 = 2. Assumptions: Rate of inflation. Again here. we are taking a period of 30 years in which the lump sum accumulated at retirement will be used up together with the interest income generated to provide the per annum amount. Taking a life span of up to 80 years old + a safety margin of 10 years until age 90. I = 7 % Post-retirement rate of return in fixed income instruments.8037 % PMT = 2902161 FV = 0 Mode = BGN (as retirement income is needed at the beginning of each year) PV = 59990371/Lump sum needed is about Rs.8037 % Using financial calculator or table of values. where n = 30 i = 2.Single Window Services Scenario 2: Principal liquidation scheme.07 / 1 + 0. The annual retirement income is to be needed for a certain number of years only – normally to the end of the life span projected. 59990371/- 70 . r = 10 % We calculate the inflation-adjusted discount rate i = r – I / 1 + I = 0. we calculate the lump sum needed for such inflation-adjusted income generation.
Funding the amount can come from 2 sources Current net assets Future cash flow surpluses All the sources fund the accumulation phase as tabulated below: Source Method Value 18 years From now. N = 18 I = 11 % PMT = 275000/Mode = End Find FV TOTAL: (M + N) 13858882/- N 30504319/- Note: (1) The net value of cars is not taken into this figure. N = 18 I = 11 % PV = Find FV M FUTURE a) Cash flow statement – revised with annual surplus of Rs.(After New Insurance Coverage) Using calculator. as cars are not investment grade asset unless they are liquidated. 275000/.Single Window Services Funding the entire lump sum We now see if you can fund this amount within 18 years from now. 71 . at 11 % growth rate NOW – Current net assets From revised net worth statement Amount is Rs. 2543792 16645437/(See Note 1 below) Using calculator.
Satish requires Rs.to fund by the “economy scheme” method based on current situation. So. Satish has that much risk appetite hence we recommend the option (d) to adapt. Actual amount is short to meet the requirement. 72 .by the time he retire. so the options are: A higher post-retirement rate of return of higher than 10%. Based on the risk profile questionnaire. 30504319/. this does not meet Satish original objective and will be pursued only as a last resort. 66553950/. this is not recommended.Single Window Services Our findings: Satish will have 16645437 + 13858882 = Rs. assets should be invested in very low risk or zero-risk assets. However. Reducing the retirement income will meet the lower retirement lump sum. During retirement years. Delay the retirement age from 60 to probably 63.
0 316. However.52% 1.792 Return Rate 3.000/% 47% 53% Rs 116.000.00% Portfolio return: Weighted Return Rate 0.346.346. based on the current portfolio.053. The portfolio needs to be restructured to the followings: Asset Saving Account Equities Life insurance Mutual funds PPF Total: The recommendations are: Based on the age and risk profile questionnaire. which will invest in equity.789. As you have completed almost first 15 yrs in PPF and extended that account for next 5 yrs. in which you will have direct participation in equity market with professional advice.950.0 2.48%.50% 18. the portfolio return rate is only 9.35% 0.16% 9.0 1.543. Satish has a moderate risk appetite.197.00% 1.00% 4.03% As Equity portion has higher risk we suggest you to go for PMS activity. We will reallocate the mutual Fund amount to Direct Equity 73 .50% 15.0 764.00% 12. You will be able to withdraw Rs.00% 8. 500000/-.792/1. the portfolio investment rate of return used above is 12% for pre-retirement.Single Window Services Investment Planning To meet the desired retirement lump sum at age 60. Hence the Asset Allocation kept is: Asset Class Debt Equity Amount 1.
00% 7.0 72.000.0 73. This restructured portfolio will give 12 % return in order to meet your accumulation goals.00% 15.0 90. such restructuring must meet the risk profile of you in which we have matched.00% 18. making some changes to your goals and objectives.78% 3.Single Window Services The recommendations for Future Investment Every year the surplus investment of Rs.50% 9.will be as below.000.0 20.93% 2.45% 0.58% 12. If it does not.000. Asset Saving Account Time Deposits Equities Mutual funds Debt Funds PPF Total: Rs. They are almost liquid as saving account.000.000.00% Portfolio return: Weighted Return Rate 0. 20.000 Return Rate 3. the financial planner will need to discuss again with you again if they can arrive to some acceptable conclusions which include but not limited to. But the yield is almost double than the saving.00% This will keep the asset allocation same as required We have added Debt Funds in your portfolio. However.00% 4. 74 .25% 0.50% 8.0 275. 275000/.
Single Window Services Restructured Existing Investment Portfolio 12% 0% Saving Account Equities 30% 53% Life insurance Mutual funds PPF 5% Future Investment Portfolio 7% 7% Saving Account 27% 33% Equities Mutual funds Debt Funds PPF 26% Asset Allocation Debt 47% 53% Equity 75 .
Single Window Services Estate Planning The need for estate planning centers more on will writing. To ensure assets go to the right person(s). 76 . trust creation and estate distribution. A will is recommended to be written to instruct the trustees to distribute all wealth to the beneficiaries as per the wishes of you should he be demised. it is recommended that all nominations must be properly done for all insurance policies and mutual funds.
they will take good stocks and hold them for at least more than a year. 77 . You already have a taken a good care of Taxes You have full advantage of Home loan interest repayment.Single Window Services Tax Planning Tax relief & rebates You are keen to maximize whatever relief and rebates you can get so that he can pay minimum taxes. Hence Short Term Capital Tax will be minimized. Life Insurance policies itself takes care of tax rebate u/s 80 C As we have increased the Health Insurance premium you will be able to get full benefit u/s 80 D Frequent Churning of shares used to generate Short Term Capital Tax. Now as per new recommendation your equity portfolio will be handled by professionals.
0% To get a will written and nominations for others.48% to 12.Single Window Services Implementation/ Action Plan What Apply for loan from LIC Withdraw amount from PPF Withdraw the amount from Mutual Funds Invest the amount in Equity Apply for Loan against Securities Complete the LAS Repay the Personal Loan To prepare and complete a comprehensive insurance program for the entire family To review retirement planning goals and objectives To restructure the current asset portfolio from 9. Review the portfolio Who to do it Client Client Client Financial Planner Financial Planner Financial Planner Client Financial Planner Financial Planner + Client Financial Planner Financial Planner Financial Planner + Client Deadline 1 July 08 1 July 08 1 July 08 15 July 08 1 July 08 15 Sep 08 20 July 08 1 July 08 10 July 08 15 July 08 10 July 08 15 Dec 08 78 .
1352000/.Single Window Services Appendix 1 Personal Data Area Birth date Sex Marital status Address Occupation Employer Income from employment Consultant Self Employed Rs. 165000/.per annum Satish 1 Sep 1965 Male Married Pushpa 27 Mar 1967 Female Married Same Consultant Self Employed Rs.per annum Umesh 19 Jan 1995 Male Single Same Nil Nil NA Amey 15 May 1998 Male Single Same Nil Nil NA 79 .
Mainly businessman & salaried person are more interested to do Financial Planning. FD. 80 . People are more interested in investing in traditional Investment options like insurance. Conclusion of the study • • • • • Most of people unaware about Financial Planning. Mutual fund advertisement not succeeds in creating awareness in the people. post.Single Window Services Chapter 4. Most of investor does not know that how Portfolio Generate profit.
Single Window Services Chapter. which can educate customers about financial planning.5 Recommendations and suggestions • • • • Co. Make those ads. Create a new tools and techniques which will easy to understand for clients. has to use effective Medias that can appeal to the masses. 81 . Co. should have to increase awareness in the customers.
Deepak Kulkarni 1352000/- Last 3 Years Annual Income Year 2007-2008 1352000/Year 2006-2007 1217000/Year 2005-2006 1095000/What is the average annual increment rate? 10% Average annual taxes paid in the last 3 years? 180000/Are income tax withheld appropriately from your employment income? 82 Q Q Q .Single Window Services QUESTIONNAIRE PERSONAL FACT FINDER Date: 28-june-08 Name: Address Satish Deshpande Phone No. Sandip Deshmukh Mr. Q Q Q Q Q Q 1-Sep-65 Name Pushpa Umesh Amey B. Godha Mr. Date of Birth Relation Spouse Child 1 Child 2 Education Background Occupation Employer Q.E. MBA HusbandWifeSelf Employed Age 39 12 9 Fax No. Sandip Deshmukh Mr. Personal legal Advisor Personal Accountant Personal Tax Advisor Insurance Agent Current Annual Income Mrs. Marital Status Occupation Self Employed Education Education Marrie d Consultant Consultant Brief summary of your working experience? Working as a Consultant from last 12 Yrs.
without considering loan repayment What assets do you currently owned? Two Cars House Are any property individually owned by you or your spouse? Yes What other investments have you invest in? PPF. Traveling. upgrade or reduce your pre-retirement standard of living during retirement? Maintain pre-retirement standard after retirement Do you think your current retirement program provide adequately for your Retirement income needs? Don’t know Are you willing to lower your standard of living during retirement? No Do you have dependants you need to care for during retirement? No How much do you need now to maintain your current standard of living? Minimum Rs 350000/.Single Window Services N/A Q Q Q Q Q Q Q Are your income tax returns prepared by you or a professional accountant? Professional Accountant Do you file income tax jointly or separately with your spouse? Separately DO you have a personal retirement plan? No At what age do you want to retire? 60 What concerns you most about retirement? Monthly Income What does retirement mean to you? Involving in Social Work. Develop my personal hobbies Do you expect to maintain. Shares. Mutual Funds What is your opinion on the following investment? 83 Q Q Q Q Q Q Q Q .
Single Window Services Stocks Properties Mutual Funds Fixed Income Others Q Q Q Q Q Q Q I like to take risk and the trading activity One is sufficient which I am not going to sell ant time They are good as an investment option Not really interested/Don’t want taxable income PPF is good Government scheme Company What existing benefits does your company provide as retirement benefits? N/A How do you foresee your future with this company? N/A Does the company have any retirement gratuity or death gratuity for employees? N/A Do you own any shares in the company? N/A What will happen to the shareholding upon death. Planning to expand the consultancy What percentage of retirement fund contributions is your company contributing? N/A What is your current retirement fund balance? N/A Have you made any withdrawals from retirement fund? No Do you plan to make any withdrawals in the future? No Q Q Q Q 84 . disability or retirement? N/A What is your plan 5 years from now? My wife will stop working within next 3 yrs.
mutualfund.singlewindowservices.com www.Single Window Services BIBLIOGRAPHY • • • • CFP Book’s (Certified Financial Planning) www.com AMFI Course Book 85 .
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