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Wealth Management Sector An Analysis Of Existing And Potential Market
AXIS BANK LTD. AHEMDABAD Submitted By:
Ankit kanungo (MBA-III SEM), In Partial Fulfillment for Degree of
Master of Business Administration during the year 2008-09
AMITY BUSINESS SCHOOL, AMITY UNIVERSITY RAJASTAN, JAIPUR
It is a matter of great satisfaction and pleasure to present this report on Analysis of Wealth Management taking Axis bank as basis. I take this opportunity to owe my thanks to all those involved in my training. This project report could not have been completed without the guidance of our COORDINATOR - MBA, Dr. SHEELA SRIVASTVA & project guide Dr. AMIT DIWIDI. Their timely help & encouragement helped me to complete this project successfully. I thank Mrs. VINEET AGRAWAL (VICE PRESIDENTHR) for giving me opportunity to work at AXiS BANK, as a FINANCE TRAINEE. I am thankful to Ms. PAMPA GHOSH (MANAGER – WEALTH MANAGEMENT) and MR. SAURABH TRIPATHI (DGM, WEALTH MANAGEMENT) for their encouragement and able guidance at every stage of my training work. I express my gratitude towards staff of WEALTH MANAGEMENT DEPARTMENT -AXIS BANK, those who have helped me directly or indirectly in completing the training.
) Amity Business . Pampa Ghosh (Manager) Wealth Management Department School FACULTY Dr.4 WEALTH MANAGEMENT SECTOR AN ANALYSIS OF EXISTING AND POTENTIAL MARKET COMPANY GUIDE : GUIDE : Ms. Amit Diwidi (Prof.
Particulars Page No 1 2 3 4 5 6 Executive Summary Objective & Scope of Project Company Profile Theoretical Background** Projections Bibliography .5 AXIS BANK (DELHI) Jaipur INDEX No.
Safekeeping and Asset Servicing End-to-end Investment Lifecycle Management • Key function areas Financial Planning Services . CONCEPT OF WEALTH MANAGEMENT • Wealth Management Range • Key Elements of Wealth Management Services • Key Challenge Area 3 Solution Framework 4. Wealth Management – An Emerging Sector 5. INTRODUCTION 2. Core Elements of Wealth Management • Packaged at various levels Advisory Investment Processing (transaction oriented) Custody.6 ** 1.
• Client Involvement Level. • Passion Investment (Philanthropy and Social Responsibility). . • Personal relationship driving the business.7 Client Profiling Investment Objective Portfolio Strategy Definition / Asset Allocation Defining Portfolio Strategies and Portfolio Modeling Determination of Portfolio Constituents and Allocation of Assets Strategy Implementation Portfolio Management Portfolio Administration Performance Evaluation and Analytics Strategy Review and Alignment Recalibration of Portfolio Strategy Rebalancing. • Limited Leveraging Capabilities of Technology (as an enabler). Key Challenge Areas • Highly Personalized and Customized Services. • Intricate Knowledge of Cross-functional Domain. • Evolving Client Profile. • Technical Architecture and Technology Investment. Reallocation and Divestment of Assets 6.
8 7. Solution Framework • • • • • • Quality of Service Level Universal Service Offering Investment in People Processes Price not a True Differentiator Unconventional Delivery Channel and Communication Flexibility of Technical Architecture .
11. • Is PMS for you? • How to choose a PMS. • Cost structure. • • • Returns. • Scheme benchmarks. Broking house. Consumer Point Of View : Wealth Management • PMS vs Wealth manager and fund manager. SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS • Custodian Services • Trust Services • Retirement Plan Services 9. • Assets under management (AUM). CONCEPT OF ASSET CLASSES Asset Mix • • List Of Different Asset Class Fixed Deposits Merits and Demerits Interest rates on FDs Effective Return .9 8. • Minimum investment. ADVANTAGES AND LIMITATIONS 10. Frequency of disclosure. • Investment philosophy.
invasion. crisis . looting.10 MUTUAL FUND Open-end fund Exchange-traded funds Equity funds Capitalization Bond funds Money market funds Funds of funds Hedge funds Equity investment Direct holdings and pooled funds Commodities Market ART FUND Diversified portfolio Tie-ups with galleries REAL ESTATE FUND Insurance Product General Insurance Unit Linked Insurance Plan (ULIP) Structured Product Composition Risks GOLD Factors influencing the gold price gold becomes desirable in times of Bank failures Low or negative real interest rates War.
11 Currency Portfolio composition of currency 12. Companies providing Wealth management services • Kotak securities • INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSPHY Morgan Stanley INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSPHY • Moti Lal Oswal INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSOPHY • Religare Wealth Management INTRODUCTION PRODUCTS ASSET CLASSES USED .
12 ASSET SIZE INVESTMENT PHILOSOPHY Standard chartered INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSPHY • Abn Amro Wealth Management INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSPHY • HSBC Financial Planning Services PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILOSOPHY .
WEALTH MANAGEMENT : INDIAN CONCERN • • Position of India in Wealth Management Risk aversion of Indian customers .13 • Citi Bank INTRODUCTION PRODUCTS ASSET SIZE ASSET CLASSES USED INVESTMENT PHILSPOHY ICI Wealth Management INTRODUCTION PRODUCTS ASSET CLASSES USED ASSET SIZE INVESTMENT PHILSPOHY 13. AXIS BANK & WEALTH MANAGEMENT • Procedure for entertaining a client in AXIS BANK • Coustmer Profiling at Axis Bank Upto 30 years of age 30-45 years of age 45-60 years of age over 60 years 14.
15. MIDDLE EAST & WEALTH MANAGEMENT
16. WEALTH MANAGEMENT ON GLOBAL PRESPECTIVE
Axis Bank Wealth Management provides discretionary wealth management service, in which wealth managers give recommendations to customers and invest according to customer discretion. My Project is the study of Wealth Management Sector,An Analysis Of Existing And Potential Market.
The study was conducted at the main branch of AXIS BANK,CP,NEW DELHI. The project was of 6 weeks duration.
During the project I had taken the guidance of Wealth managers & staff to collect the data, & also made use of Company’s various reports. The data collected were then compiled, tabulated and analyzed. Apart from objectives, Some of the points which is considered in this topic to make project report more comprehend are :1. What a customer expects from a wealth management service provider. 2. Solution framework for wealth management. 3. Key Challenge Areas. 4. Core Elements of Wealth Management Services.
. 3) To know the comparative position of the companies offering wealth management services. 5) To have a conceptualized view on wealth mangagment services. 2) Understanding company’s procedure in wealth management department. 4) To have a general notion on different asset classes available in financial market. to identify the potential of wealth management sector.17 OBJECTIVES 1) Through the past results.
. the Bank has a very wide network of more than 701 branch offices and Extension Counters. and United India Insurance Company Ltd. Presently. National Insurance Company Ltd. This is one of the largest ATM networks in the country. 358. The New India Assurance Company Ltd. The Oriental Insurance Company Ltd. Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies.e. The Bank today is capitalized to the extent of Rs. after the Government of India allowed new private banks to be established. The Bank’s Registered Office is at Ahmedabad and its Central Office is located at Mumbai. i. The Bank has a network of over 2854 ATMs providing 24 hrs a day banking convenience to its customers. . The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.I).18 COMPANY PROFILE Axis Bank was the first of the new private banks to have begun operations in 1994..56 crores with the public holding (other than promoters) at 57.60%. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI .
19 Theoretical Background INTRODUCTION The term Wealth management also now a days having very importance.2 trillion in year 2006.000 miolliners day end of year 2006 is now grow up by 21% from a year earlier (Asia pacific Wealth report). number of banks and niche players has started offering full range of wealth management services targeted to HNWIs and emerging affluents. many unique elements inherent to wealth management services requires completely different service offering model than the existing model for transactional services.4% since 2005. So many Banking companies are engaged in the business of Wealth management. The premier insurance industry is now booming because so many bankers are also adopting and playing safe in the business of insurance the term called is Bancassurance. Wealth management services area in financial sector has been witnessing more attention during last couple of years. Value of wealth held by HNWIs represents an increase of around 11. Considering long-term high value business proposition. CONCEPT OF WEALTH MANAGEMENT . demand of unconventional form of service model poses a big challenge in charting growth path for these wealth management firms. While growing volume of premium services to affluent clients becomes the key driver for most of the service provider firms.5 million with wealth held by them totaling to US$37. Capgemini Merrill Lynch Wealth Report 2007 cites number of HNWIs globally to be around 9. Now a days Wealth Management has very craze in the business world. Greatly accustomed in offering commoditized financial services so far. In a survey it was found that India had 100.
While defining Wealth Management They have to think in planned manner. protect and distribute assets in a much planned systematic and integrated manner”. The Meaning of Management They have already seen in the steering introduction. Assets. manage. investments and cash it means the term Wealth management deft with funds Asset.20 The term Wealth management formed with two words Wealth & Management. The meaning of Wealth is – Funds. instrument. . “Wealth Management is an all inclusive set of strategies that aims to grow. cash and any other item of similar nature.
namely: • • • • • Ultra-high net worth.000 and $1 million) will have a total population of 350. Super affluent (between US$125. or Ultra-HNW (in excess of US$30 million).500 households by 2012.000 by 2012. Super high net worth (between US$10 and $30 million) will have a total population of 42. High net worth (between US$1 million and $10 million) will have a total population of 320.000 households by 2012.000 and $125. The range of Wealth management can be expressed by this exhibit chart.000) will have a total population of 1.21 WEALTH MANAGEMENT RANGE The Indian market has been segmented by Wealth management service providers into five categories. will have a total population of 10. .000) will have a total population of 39 million households by 2012.8 million households by 2012. Mass market (between US$5.000 households by 2012.000 and $25. Mass affluent (between US$25.
22 STUDENT START OF CAREER CAREER ESTABLISHED RETIREMENT * Deposit based A/c comfort * Comfort A/c with credit limit * Gold Card * Premium A/c * Platinum Card * Premium A/c Liquidity Management (Cash Mgt) * Credit cards * * * Money Near Overnight Market Money & money Fixed Market Income Fund A/c* * * Top Flagship portfolio* portfolio* * Top Flagship Titan * portfolio* portfolio* Overnight Near * Platinum Card money Market A/c Fund Plus portfolio portfolio Fund* Money Market & Fixed Income Fund Money ZINS Top Flagship * ZINS Plus * * * Special Investments Wealth Formation (Savings Plans) * Titan portfolio portfolio* Titan portfolio Absolute Holding Modular Individual and Wealth Wealth Premium Return Private Portfolio Equities Management Management Portfolio * Capital formation benefit funds * * Wealth Optimization (Lump Investment) sum * * * Titan Portfolio Key Elements of Wealth Management Services Wealth management services involve fiduciary responsibilities in providing professional investment advice and investment management services to a client. Depending on the mandate of the services given to the Wealth Manager. wealth management services could be packaged at various levels: a) Advisory b) Investment Processing (transaction oriented) c) Custody. Safekeeping and Asset Servicing d) End-to-end Investment Lifecycle Management Wealth management services comprises of following key function areas of: (a) (b) Financial Planning Portfolio Strategy Definition/ Asset Allocation / Strategy Implementation .
Performance Evaluation and Analytics Strategy Review and Modification. .23 © (d) Portfolio Management –Administration.
Act and Monitor cycle. Evolving Client Profile 4. Personal relationship driving the business 3. Technical Architecture and Technology Investment 8. Flexibility of Technical Architecture: Against the background of lack of clarity on business model and involved process. A solution framework with considered inclusion of following key elements would help firms in meeting and exceeding client needs towards sustainable business growth: 1. Investment in People Processes 4. a broad framework of service offering would be revolving around: Anticipate. 2. Passion Investment (Philanthropy and Social Responsibility) 6. 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. A loosely oriented technical architecture with optionality and mix of Build – Buy – Integrate components would be considered as a good beginning point. Analyze. going beyond client expectations.25 Key Challenge Area Wealth management firms face many challenges in formulating winning services offering meeting the client needs. • 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. Some of key challenges faced by wealth management firms are: 1. Unconventional Delivery Channel and Communication 6. Advice. Universal Service Offering 3. Price not a True Differentiator 5. Client Involvement Level 5. To meet the information technology requirements. . Quality of Service Level: Highly focused around client needs. 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). Highly Personalized and Customized Services 2. Limited Leveraging Capabilities of Technology(as an enabler) 7.
.26 • 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.
• Client profile / data management to cater a profile driven solution offering. • Complex decision support and client oriented analytics. . 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.27 To provide enough resilience and high business relevance. • Flexibility to incorporate manual processing interfaces in applications.
With an increasing population of High Net worth Individuals (HNWIs)1. representing an increase of around 11. to learn the trick of enhanced client satisfaction. To meet the client service expectations accurately.2 trillion. HNWI wealth totals US$37. We’ll call you (if you are that wealthy!)” seems to be completed altered in recent times. however. number of HNWIs in India is increasingly growing – at a rate higher than other region of world.offering exclusive services to a select few. has been witnessing more attention during last couple of years. While growing volume of premium services to affluent clients becomes the key driver for most of the service provider firms. number of banks. the unsaid tagline of earlier days “Don’t call us. entertainment and retailing industries.5 million in year 2006. in terms of value it really makes a really huge sum of serviceable investment3. Number of HNWIs globally is estimated to be around 9. As per report.4% since 2005.35% over previous year. A booming economy. It is not a surprise that many of successful firms in wealth management sector draw lessons from successful service leaders from hospitality. . As per recently published Capgemini Merrill Lynch Wealth Report 2007.an increase of over 20. Considering long-term high value business proposition. number of HNWIs around the world and value of their assets has been continuously rising. Greatly accustomed in offering commoditized financial services so far. rising stock prices and an increase in income and spending power have brought sharp focus on this sector. financial firms and niche players has started offering full range of wealth management services targeted to HNWIs and emerging affluents. demand of unconventional form of service model poses a big challenge in charting growth path for these wealth management firms.5% over previous year. in absolute terms the above number appears pretty miniscule (if we compare that with the number of retail investors in India2). many unique elements inherent to wealth management services requires completely different service offering model than the existing model for transactional services. an increase of over 8. Though. servicing model and framework has to be deeply oriented with high level of client satisfaction.000 in year 2006 . Number of HNWIs in India is estimated to be around 100.28 Wealth Management – An Emerging Sector Wealth management services area in financial sector. hitherto used to be the preserve of some top multinational banks and financial firms.
29 Core Elements of Wealth Management Services In most basic sense. Investment planning. wealth management services involve fiduciary responsibilities investment in providing professional services to investment advice and funds management Institutions. corporations. Investment Management and many times Fund Management or Asset Management. • Depending on the mandate of the services given to the Wealth Manager. (Pension/mutual/Hedge). on behalf of the client. execution and management. decision and execution.we would keep our focus limited to HNWIs. decision and further management remain vested with the client. wealth management services could be Packaged at various levels a) Advisory Wealth manger’s role is limited to the extent of providing guidance on investment / financial planning and tax advisory. implement investment decisions and manage the investment . b) Investment Processing (transaction oriented) Client engages wealth manager to execute specific transaction or set of transactions. based on client profile. administration and oversight of investment process. In the present context of our discussion. Safekeeping and Asset Servicing Client is responsible for investment planning. Some of analogous terms used for wealth management could be considered as Portfolio Management. d) End-to-end Investment Lifecycle Management Wealth manager owns the whole gamut of investment planning. He is mandated to make financial planning. c) Custody. Wealth manager is entrusted with management. trusts as well as HNWIs. decision. as per his /her own judgment. Investment decisions are solely taken by the client.
30 throughout its life .alcohol. gambling firms. or compliant with Sharia laws) • Behavioural History (Pattern of past investment decisions) • Level of client’s engagement in investment management (active / passive) • Present investment holding and asset mix . Some of key characteristics to be evaluated for defining client’s investment objective are: • Current and future Income level • Family and life events • Risk appetite / tolerance • Taxability status • Investment horizon • Asset Preference /restriction • Cash flow expectations • Religious belief (non investment in sin sector like . demographic and investment characteristics of a client that would determine each client’s wealth management requirements.Wealth management services comprises of following Key a) b) c) d) e) function areas : Financial Planning Portfolio Strategy Definition / Asset Allocation Strategy Implementation Portfolio Management Strategy Review and Alignment a) Financial Planning Client Profiling Client profiling takes in account multitude of behavioural. tobacco.
Boat. investment expectations and financial goals of the client could be clearly outlined.) b)Portfolio Strategy Definition / Asset Allocation Defining Portfolio Strategies and Portfolio Modeling After establishing investment objectives. tobacco. a broad framework for harnessing possible investment opportunities is formulated. This framework would factor for risk-return tradeoff of considered options. Real State. Each of these asset classes is to be comprehensively evaluated for inclusion in portfolio model. in view of defined investment objectives. Thus. for a client looking for Shariacompliant investment. Investment objective for most of the investors could be generally considered amongst the following: • Current Income • Growth (Capital Appreciation) • Tax Efficiency (Tax Harvesting) • Capital Preservation (often preferred by elderly people to make sure they don’t outlive their money. Likewise. geography. Reference and Indices.31 Investment Objective Based on the client profile. risk tolerance. religious beliefs is the key element. Forex. sector and industry.Aircraft)). consideration of client preference or avoidance for specific asset class. gambling etc. for a client with a belief of avoidance of investment in sin industries (alcohol. While defining the strategy. Commodity. Investment strategy helps in forming broad level envisioning of asset class (Securities. investment horizon and provide a clear blueprint for investment direction. strategy formulation should consider investment options meeting with the client expectations. Art/Antique and Lifestyle Assets (Car. market.) is to be duly taken care of. Determination of Portfolio Constituents and Allocation of Assets . Defining investment objectives helps to identify investment options to be considered for evaluation. which would come into picture.
lost opportunity and other form of sensitivity and what-if analysis. risk sensitivity and co-relation of constituents within portfolio model would help to determine the size (weightage) of each individual constituent in the portfolio.32 Guided with the investment strategy. Deep discounted or Par bonds. As acquisition cost would be having bearing on overall performance of the portfolio. relative return (in comparison to chosen benchmark). . Asset backed or other debt variants. Return profile. transactions to acquire specific instruments and identified asset class is initiated. portfolio accounting. Fund managers. pattern. client reporting. or corporate bonds. d) Portfolio Management Portfolio Administration Portfolio Administration involves handling of investment processes and asset servicing.interfacing with brokers/dealers/agents. Any deviation of portfolio performance observed during performance evaluation would lead to strategy review and any possible alignment of portfolio strategy. fee administration. tax impact. Cash Agent and many other market intermediaries. which would directly and efficiently contribute towards client’s investment objectives. This function would involve back office administration and custodial services to manage transaction processes (trading and settlement) . This would also require tax management. Long or short maturity bonds. 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. a broad level investment guidance of – “investment in fixed income in emerging market” would further determine classification within Fixed Income such as Govt. document management and general administration relating with portfolio and client. Performance Evaluation and Analytics Performance evaluation of the portfolio is an ongoing process. cost impact. Portfolio return is continuously monitored and analyzed with respect to defined portfolio objectives. c) Strategy Implementation Having decided the portfolio constituents and its composition. Custodians. concentration. constituents in portfolio model are determined. Analysis dimension could be varied – simple and complex. These may include absolute return. trend. fixed or variable rate bonds. Thus.
portfolio strategy is evaluated on periodic basis. 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. To keep it aligned with the defined investment objectives.33 e)Strategy Review and Alignment Recalibration of Portfolio Strategy Based on performance evaluation and future outlook of the investment. This would be achieved through rebalancing the asset (divesting over-allocated part and acquiring under allocated). . relocation (from one sector the other or from one instrument to other instrument in the same class) or complete divestment. Many times. portfolio strategy is suitably re-calibrated from time to time. review of portfolio strategy would be necessitated due to change in client profile or expectations.
• Evolving Client Profile The biggest challenge in providing wealth management service offering is to factor and reckon the evolving nature of client profile. Thus. mostly being transactional / commoditized in nature. developing any form of generic service model does not support growth of the business.34 Key Challenge Areas While immense business potentiality of this emerging sector is a driving point for most of the firms. we would briefly take a look on the key challenges area in the present context. who takes care of whole investment management lifecycle for bunch of clients on one-to-one basis. they face many challenges in formulating winning services offering meeting the client needs. In the following section. data centre does not fit well. This essentially requires service firm to invest heavily in human processes to groom and retain a team on competent relationship managers with cross functional skills. Any service model has to be flexible enough to consider the dynamic nature of client profile and expectations arising out of it. a service model developed for a particular client cannot remain static over a period of time. time horizon. Success of wealth management services heavily draws on personal interaction with the dedicated relationship manager. risk appetite and so on. • Client Involvement Level . Thus. In a situation of highly personalized and customized nature of service offering. mode of communication in wealth management services tends to be highly personalized. such as call centre. in terms of investment objective. wealth management services require client specific solution and service offering. • Personal relationship driving the business To meet client expectation of personal attention. • Highly Personalized and Customized Services Unlike other stream of financial services. the conventional grids of communication. No one solution exactly meets the needs of other client.
This brings onus of managing the whole gamut of investment and due performance single-handedly on the shoulders of investment manager. more effort is needed to manage it – proves to be otherwise in case of HNWIs. Generally. .35 The conventional adage – the more money you have. client involvement in managing the finance remains on the lower side.
any investment commitment towards application development / system implementation would be fraught with severe risk. As business rules and service definitions to guide the applications tends to be quite composite in wealth management services. this equates to more than US$285 billion globally. unique assets. • Intricate Knowledge of Cross-functional Domain By very nature of wealth management. 11% of HNW investors worldwide contributed to philanthropic causes with a contribution over 7% of their wealth in year 2006. Ultra-HNWIs contribution was even more . new breed of HNWIs expect to strategically manage the wealth and personal resources allocated to philanthropy purpose. we have witnessed technology a key enabler to help business to expand its market reach with reduced cost of services offering. In order to provide sound investment . Technology leveraging has helped services firm to achieve universal proliferation of market with substantially reducing transaction cost. In total. As per World Wealth report. • Limited Leveraging Capabilities of Technology (as an enabler) In the recent times. • Technical Architecture and Technology Investment As business architecture is still evolving. Against this backdrop. This demands a relationship manager not just to be a passive financial advisor rather a passionate partner sharing interest and inclination of the associated client. it not just involves matters of plain vanilla finance but has intricate relationship with many elements of domestic / international law. Online banking and online trading/brokerage services are the best examples in this regard. In absence of this framework. coins. leveraging the capabilities of technology to meet the business requirement may not be highly feasible in the initial years. in order to maximize its impact. a proven basis of resilient technical architecture and framework to support the emerging business greatly remains missing. philanthropy and social/community causes.36 • Passion Investment (Philanthropy and Social Responsibility) In the recent years a trend has been observed that bulk of investments by HNWIs has been directed towards passion investments (art. luxury). antique. jewellery. taxation and regulatory norms.17% of Ultra-HNW investors that gave to philanthropy contributed over 10% of their wealth.
a relationship manager is required to have intricate knowledge of domestic/cross-border finance.37 guidance. accounting. legal and taxation subjects. .
client satisfaction and client retention aspects. Act and Monitor cycle. In the other situation of deficiency in service level. rather than showing extra attention only during the period of client acquisition. Analyze. going beyond the client expectations. This keeps strong emphasis on continued engagement with the client on the aspects of client expectation and servicing. • Quality of Service Level Quality of service level provided by the service provider firm would the key determinant of growth and success in client acquisition. A HNWI client expects exclusiveness in services in a normal manner. Focused around client needs. he would not hesitate to move the business to another firm. In highly competitive market.38 Solution Framework Generic services offering model is going to draw big blank in case of wealth management services. direct / indirect referencing as well as cross selling of products. A solution framework with considered inclusion of following key elements would help firms in meeting and exceeding client needs towards sustainable business growth. key to success for a firm lies in offering exclusiveness in services delivery (high quality services on most personalized basis). a broad framework of service offering during whole lifecycle of client investment management would be revolving around: Anticipate. Without over-emphasizing. Advice. . In a sense. . where the relationship manager remains highly responsive to client sensitivities and expectations. service offering could be developed in the form of partnership with the client based on trust and integrity. a satisfied client would provide multitude of opportunities of growth of business – through deepening the relationship.
a client would expect to deal with a single firm to get complete range of investment management services. in many situations it may not be a viable proposition to offer those services. success of the firm would be greatly dependent on the skills. groom and retain a motivated team of relationship managers. This aspect is more challenging than as it appears. • Unconventional Delivery Channel and Communication Delivery channel for service content and mode of communication has to be greatly customized – aligned with the client-desired vehicles. But. who will make the real difference between winning and losing the game. Focused on performance and quality of service. product and service offering range of the firm should be wide enough to cover the investment spectrum across its lifecycle. if he finds services offered to him meeting and exceeding his expectations. He will certainly not mind paying extra. even if caused by partner/affiliate’s services. • Investment in People Processes As relationship manager remains the face of the firm to a client. drive and enthusiasm of relationship managers (to take an extra mile). Client would always value the pricing from the quality of services received. while bonding and dealing with any of client issues. pricing in isolation will not make much meaning to service seeking clients. it could be achieved through active partnership and affiliation. due consideration is required that quality of service level provided by partners/affiliates does not get compromised in any manner. This necessitates transformation of organizational philosophy towards its people and people processes contributing to business success. In an ideal situation. However. This would require a process of . Firms would be required to invest heavily in human processes to attract. Any shortcoming in service quality. While universal service offering with assortment of services under single umbrella is not attainable in house. for various business considerations of the service provider firm. would be ultimately impairing client satisfaction towards the firm.40 • Universal Service Offering To meet the client needs in holistic manner. • Price not a True Differentiator Pricing as a key differentiator to distinct the service offering from one firm to other may not be highly relevant in case of wealth management services.
Impact of technological advancements and its interplay on service delivery and communication method would certainly be an equally challenging aspect to be factored in. . while designing such strategies.41 continuous re-inventing and re-defining the grid of delivery and communication channels to meet client expectations.
Many of information techno service providers have come out with novel solution for investment management / investment processing platform in the form of service bureau / ASP. dynamic characteristics of client profile bring an increased challenge in drawing a firm implementation blueprint. on count of cost. This platform provides integrated end-to-end processing infrastructure and services including core of business processes of wealth management. time. b) Service Bureau /ASP Model: A recent trend has been witnessed in the solution provider’s landscape. It would be a least preferred choice in the current situation. A prudent approach would be to get started on modular basis with progressive integration of functional components in order of its functional significance. any big-bang commitment towards technical implementation plan would not be a wise idea. Added to that. the key consideration of providing high quality of service level with enhanced responsiveness may not be adequately answered. lack of clarity and complexity of solution. a firm has several alternatives (or combination of alternatives) to consider: a) Integrated solution approach: Developing in-house applications to meet end-to-end new business requirements. These can be . These applications are based on existing technology architecture of the firm and are closely integrated with the existing service models. existing business architecture still does not provide any sound basis to formulate technical roadmap. While total cost of owning may be the key motivating point for a wealth management firm to adopt service bureau model. this could be gradually scaled over the period of time.42 • Flexibility of Technical Architecture While business potential appears to be quite high. Gaining insight and confidence around the business processes. paying agreed charges to service bureau provider. c) Stand-alone commercial software product/solutions: Prepackaged solutions that can be focused to specific part of services or provide comprehensive end-to-end processing. On the part of a wealth management firm. option of service bureau completely eliminates the requirement of ongoing resource commitment and cost of maintaining information technology infrastructure. In the given situation. To meet the information technology requirements.
• Client profile acquires many new dimensions with plethora of attributes. customization and integration difficulties would be the challenging points. Client data is required to be appropriately managed (aggregate / segregate) to build a profile driven solution offering. • Applications should provide adequate flexibility to incorporate manual processing interfaces. any of the considered option and associated structure should keep due provisions for the following key elements: • Considering the complexity of business processes and involved business rules. A loosely oriented technical architecture with optionality and mix of Build – Buy – Integrate components would be considered as a good beginning point. rule based processing would be the core of processing. To provide enough resilience and high business relevance. Cost. .43 deployed independently or could be integrated with existing systems. • Decision support and client oriented analytics acquire more importance.
44 SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS (1) Custodian Services (A) Securities Safekeeping (B) Income collection from Securities (C) Settlement of Securities trades as directed (D) Payment of fund when directed (E) Timely settlement delivery (2) Trust Services (A) Charitable Trust (B) Revocable Trust (C) Irrevocable life Insurance Trust (D) Special Need Trust (E) Institutional Trust (3) Retirement Plan Services (A) IRA’s Custodian Or Trustee (B) Defined Benefit Plans (C) Defined Contribution Plans .
Wealth Management Practice Orientation Overview
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 Advisor: Offers strategic investment planning, as well as playing a handson role in constructing, reviewing and rebalancing client portfolios. Relationship Manager: Establishes and nurtures client relationships, delegating portfolio management to internal or external managers.
Wealth Planner: Offers holistic advice in accordance with client’s finances and short-/long-term goals, such as real estate, retirement and generational wealth transfer. Personal CFO: Aspires to provide quasi family-office services, often acting in a lead discretionary role coordinating with the client’s other trusted advisors.
The significance of these practice-model categories is that each reflects a different advisory approach, borne of a different perspective. While some firms claim to have a single practice orientation, many actually use multiple models in and across regions—and often leverage different models within their core markets to capitalize on the strengths of individual advisors. As they move into new markets, firms can create or exacerbate friction among the different advisory approaches they use. Importantly, practice orientations need not be mutually exclusive, but the mix of intra-firm practice models does need to be consciously managed.
ADVANTAGES AND LIMITATIONS ADVANTAGES:
The following are the advantages of
Wealth management concept.
1) Helpful In Tax Planning : The Wealth management
professional always shows the good path to the customers and provide the service of tax planning. How to minimize the tax and save more money? 2) Helpful In Selection of Investment Strategy: Another
advantage from the customer point of view is with the help of WM Professional the customer can easily know the investment strategy and analyze risk and return. 3) Helpful In Estate Management: With the help of Wealth
management professional They can also manage their estate. Estate management is a task to provide objective administration of their funds tailored to aim in responsible distribution and protection of their overall estate. 4) Helpful in forward looking: They can say planning, that
recognizes as Their estate grows and changes occurs They require some team of professionals who help us in future planning.
Helpful for Indian Economy: Banks which are engaged in business of WM earning revenues from the foreign countries i.e. outsourcing for economy
There may be chance that the customers are in risk but they are showing the false return and vice-versa. 3. The customer doesn’t know about the things going on with using his Wealth and there may be chances of forgery and fraud with customers. Actual Picture VS Inflation: What is the actual position of market they don’t know because every thing is done by some WM professionals.51 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. So they can not assume Their position in the market that also results in inflation because economy is unknown about the actual state. 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.
executive director. then you don’t need these services. who would advice you on your investments across the products offered by the bank like insurance. which means the service is not for small and medium investors.sebi. Also. Minimum investment required for PMS is more than mutual fund.D. bonds and unit linked insurance plan). Also. “Though the relationship manager told me about the commissions and brokerage fees.gov. Priority banking is usually offered to premiere customers who have a relationship manager appointed. So if priority banking and Wealth management is a grocery shop then PMS is a specific grocery. If you have the required time and expertise. discretionary or non-discretionary. the level of customization of your investments is higher in PMS. But when the market . Though PMS is a good option for managing your Wealth. The market was moving up when I invested and my money grew to about one and half times. Priority banking or Wealth management is the umbrella of products while PMS is a product. it is not entirely without risk or pain. he did no promise any cut-off or absolute number when asked about returns. Unlike PMS. Any person who is registered with Securities and Exchange Board of India (Sebi) as a portfolio manager is allowed to offer PMS. Portfolio managers can be of two kinds. minimum investment and on the fee structure. PMS can be defined as hybrid service provided by portfolio managers. B. PMS vs Wealth manager and fund manager. Risks involved.in. SEBI has prescribed a minimum of Rs 5 lakh investment for PMS. which includes customised stock and mutual fund investing. A list of these entities can be found at www.52 Consumer Point Of View : Wealth Management Technically. Discretionary portfolio managers manage the funds of clients independently on their own accord. there is no concept of profit sharing in mutual funds. PMS is completely different from priority banking and Wealth management. and investment linked products (mutual funds. Is PMS for you? PMS is for those people who don’t have the time or the expertise to do enough research to take informed investment decisions. Pylon Engineers (India). Mutual funds and PMS differ on the degree of customization. while the latter manage the funds according to their clients’ direction. had opted for Kotak’s PMS services. Sabu.
Benchmarks are important also as profit-sharing is linked to the performance of the portfolio above the benchmark. Akhilesh Singh.” He adds. which is for the long term. “Some portfolio managers structure long-term portfolios.There are many portfolio managers whose thresholds are much higher than the Sebimandated minimum of Rs 5 lakh. This helps measure the performance of the scheme and the portfolio manager. has a product called Strategic. says: “The performance should be judged over long periods of time during both high and low market levels. Subramaniam. business head. So. How to choose a PMS Investment philosophy. It is difficult to judge a scheme’s performance based on returns. He withdrew his investments after 14 months. Before signing the contract. Minimum investment. for instance. This happens when an investor withdraws a portfolio due to bad performance. The wrong benchmark distorts the performance of the fund. even though he got returns of 25 per cent. Choose a scheme that fits the size of your portfolio.53 tumbled suddenly. Make sure that the portfolio is benchmarked to an appropriate index. Emkay Wealth. There should not be any survivor bias. Quantum Advisors. CEO and chief investment officer. my earnings fell substantially. I. Outlook Money tried unsuccessfully to get a response from Kotak Securities on this episode. Scheme benchmarks.” Singh adds. as brokerage and profit sharing. make sure your portfolio manager has a fair record of surpassing the returns from the benchmark index for numerous years. “The company churned the portfolio frequently.” HSBC. as it may vary from the returns of an investor. This means that you will have to share a larger portion of your profit. Also.” Sabu now feels it is better to understand the market and invest on your own. which must align with the investor’s objectives. which gave them two-way profit on each transaction. while Angel’s Bluechip is for medium to longterm investors. which adds to the overall cost and tax liability. while some prefer to actively churn the portfolio for higher short-term returns. Returns. or a . an investor’s returns may vary from that of others.V. depending on the time of entry. an aggressive portfolio benchmarked to a low-return index will mean higher over-the-benchmark returns. “The most important factor is to understand the fund manager’s investment philosophy and strategy. says.
Most NAVs are disclosed daily. List Of Different Asset Class .54 portfolio manager removes a portfolio to show the performance numbers of only good portfolios. Risk is usually proxied by the “standard deviation” of returns. but you can opt for a company that also discloses portfolios daily. This varies from firm to firm. Further. have both external as Well as internal broking. and largely depends on the agreement between the investor and the company. On each transaction you pay brokerage and short-term gains tax of 20 per cent. Management fee ranges from scheme to scheme. A low AUM could be an indicator of poor performance.” Cost structure. how much the return changes about the long-term average. CONCEPT OF ASSET CLASSES Asset Mix Asset mix is the allocation of a portfolio between asset classes. it remains an important factor. it may be possible that your portfolio is churned frequently. Frequency of disclosure. such as Religare. which is variable. Assets under management (AUM). You can also pay a fully fixed fee. If the broker is internal. Broking house.Though higher AUMs do not guarantee higher returns. if the portfolio is churned frequently. Returns are a combination of the income from an investment and the price appreciation over the period. which is fixed. Usually. Portfolio managers usually have two kinds of charges— management fee. and profit sharing. while some. They believe that Rs 100 core AUM is a healthy floor. asset management companies have external brokers. it balances return and risk. 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. it adds to the cost due to higher tax and brokerage.
FDs are offered by both banks and companies though putting your money with the latter is generally considered riskier.55 1. Make sure you check the credit rating of a company before investing in its FDs. With FDs you deposit a lump sum of money for a fixed period ranging from a few weeks to a few years and earn a pre-determined rate of interest. Merits and Demerits The main advantage is that FDs from reputed banks are a very safe investment because such banks are carefully regulated by the Reserve Bank of India. Fixed deposit 2. Note that company FDs isn’t as safe as bank FDs because if the company goes bankrupt you may lose your money.Oil Fixed Deposits FDs. Equity 4 Commodities 5. You should be especially wary of companies which offer interest rates significantly higher than the average to attract your money. Structured product 9.Currency 11. the banking regulator in India. Real-Estate Fund 7. Gold 10. RBI. Insurance product 8. Mutual Fund 3. are the most popular today. The other advantage of FDs is that you have the option of receiving regular income through the interest payments that are made every . Art Fund 6.
So if you invest Rs 3 lakhs in a one year fixed deposit which pays 8 per cent you can earn Rs 2.000 of interest every month or Rs 6. Here are the interest rates offered by ICICI Bank on their FDs.56 month or quarter. The rate of interest on FDs varies according to the maturity with longer deposits generally earning a higher interest rate. So if you invest Rs 3 lakhs in a one year fixed deposit which pays 8 per cent you can earn Rs 2. For instance a stock-portfolio may rise 20-30 per cent in a good year whereas a fixed deposit typically earns only 710 per cent. A fixed deposit also doesn’t offer protection against inflation.000 of interest every month or Rs 6. Interest rates on FDs The rate of interest on FDs varies according to the maturity with longer deposits generally earning a higher interest rate. Effective Return . Interest paid on a fixed deposit is paid either monthly or quarterly according to the investor’s choice. Interest paid on a fixed deposit is paid either monthly or quarterly according to the investor’s choice. a fixed deposit won’t give you the same returns that you may get in the stock markets. Note that FDs vary quite a bit from bank to bank so you should search around before investing.000 of interest every quarter.000 of interest every quarter.On the flip side. If inflation rises steeply during the maturity of the FD your inflation adjusted return will fall. This option is especially useful for retirees.
Effective return is relevant if you choose to reinvest your interest every year which means that you will be earning compound interest. .57 Before you invest in FDs you need to understand the concept of effective return which is higher than the rate of interest on the FD.
59 MUTUAL FUND A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in .
also known as portfolio manager. and/or other securities. in the rest of the world. bonds. mutual fund is used as a generic term for various types of collective investment vehicles. An investment company will be classified by the SEC as an open-end investment company if they do . Currently. Similar funds also operate in Canada. companies (OEICs). and undertakings for collective investments in transferable securities Types of mutual funds Open-end fund The term mutual fund is the common name for what is classified as an open-end investment company by the SEC.  Since 1940. such as unit trusts. short-term money market instruments. unit investment trusts (UITs). also known in the US as mutual funds. and any corporation or trust will be classified by the SEC as an investment company if it issues securities and primarily invest in non-government securities. and closed-end funds.60 stocks. unitized insurance funds. Mutual funds must be structured as corporations or trusts. open-ended investment (UCITS). such as business trusts. the fund issues new shares to investors and buys back shares from investors wishing to leave the fund. However. the worldwide value of all mutual funds totals more than $26 trillion. The fund manager. invests and trades the fund’s underlying securities. Being open-ended means that. realizing capital gains or losses and passing any proceeds to the individual investors. at the end of every day. there have been three basic types of investment companies in the United States: open-end funds.
just like closed-end funds.Often equity funds focus investments on particular strategies and certain types of issuers. Neither UITs nor closed-end funds are mutual funds (as that term is used in the US). continually buying and selling securities and maintaining liquidity positions) and therefore tend to have loTheyr expenses. Equity funds hold 50 percent of all amounts invested in mutual funds in the United States. are the most common type of mutual fund. ETFs are traded throughout the day on a stock exchange. ETFs are more efficient than traditional mutual funds (which are continuously issuing and redeeming securities and. Most ETFs are index funds and track stock market indexes.61 not issue undivided interests in specified securities (the defining characteristic of unit investment trusts or UITs) and if they issue redeemable securities. which consist mainly of stock investments. to effect such transactions. the exchange-traded fund or ETF. Shares are issued or redeemed by institutional investors in large blocks (typically of 50. Because the institutional investors normally purchase and redeem in in kind transactions. Most investors purchase and sell shares through brokers in market transactions. Equity funds Equity funds. Registered investment companies that are not UITs or open-end investment companies are closed-end funds. . is often structured as an open-end investment company. but at prices generally approximating the ETF’s net asset value.000). ETFs combine characteristics of both mutual funds and closed-end funds. Exchange-traded funds A relatively recent innovation.
mid-cap ($1.62 Capitalization Fund managers and other investment professionals have varying definitions of mid-cap.9 billion) Bond funds Bond funds account for 18% of mutual fund asse Types of bond funds include term funds. Unlike certificates of deposit (CDs).1. and large-cap ranges. or long-term) before they mature.. Municipal bond funds generally have loTheyr returns. these bonds also come with greater risk. including high-yield or junk bonds.8 billion) Russell Midcap Index . money market shares are liquid and redeemable at any time. but have tax advantages and loTheyr risk.8 . which have a fixed set of time (short-.large-cap ($1. The following ranges are used by Russell Indexes:  • • • • Russell Microcap Index .8 .386.e.8 . Funds of funds Are mutual funds which invest in other underlying mutual funds (i. they are funds comprised of other funds). medium-.539.6 million . Money market funds entail the least risk.5 million) Russell 2000 Index . With the potential for high yield. The interest rate quoted by money market funds is known as the 7 Day SEC Yield.7 billion) Russell 1000 Index . High-yield bond funds invest in corporate bonds.small-cap ($182. as Well as loTheyr rates of return.micro-cap ($54. The funds at the underlying . Money market funds Money market funds hold 26% of mutual fund assets in the United States.13.
A fund of funds will typically charge a management fee which is smaller than that of a normal fund because it is considered a fee charged for asset allocation services. Recently. Most FoFs invest in affiliated funds (i. and Fidelity have also entered this market to provide investors with these options and take the “guess work” out of selecting funds. although some invest in funds managed by other (unaffiliated) advisors.63 level are typically funds which an investor can invest in individually. The fees charged at the underlying fund level do not pass through the statement of operations. The cost associated with investing in an unaffiliated underlying fund is most often higher than investing in an affiliated underlying because of the investment management research involved in investing in fund advised by a different advisor. as these both reduce the return to the investor. The design of FoFs is structured in such a way as to provide a ready mix of mutual funds for investors who are unable to or unwilling to determine their own asset allocation model. American Century Investments. Vanguard. Fund companies such as TIAA-CREF. The allocation mixes usually vary by the time the investor would like to retire: 2020. mutual funds managed by the same advisor). . FoFs have been classified into those that are actively managed (in which the investment advisor reallocates frequently among the underlying funds in order to adjust to changing market conditions) and those that are passively managed (the investment advisor allocates assets on the basis of on an allocation model which is rebalanced on a regular basis).e. The fund should be evaluated on the combination of the fund-level expenses and underlying fund expenses.. prospectus. or statement of additional information. but are usually disclosed in the fund’s annual report. 2030.
Hedge funds Hedge funds in the United States are pooled investment funds with loose SEC regulation and should not be confused with mutual funds. A variation of the hedge strategy is the 130-30 fund for individual investors. Hedge funds typically charge a management fee of 1% or more. during which an investor cannot cash in shares. plus a “performance fee” of 20% of the hedge fund’s profits. The Act does not require an adviser to follow or avoid any particular investment strategies. Some hedge fund managers are required to register with SEC as investment advisers under the Investment Advisers Act.64 2050. nor does it require or prohibit specific investments. etc. Amount in Rs.. Crores . the more aggressive the asset mix. There may be a “lock-up” period. sales & redemption figures. Latest Asset Under Management for all Mutual Fund houses. The more distant the target retirement date.
64 Jun 2008 30.64 Apr 2008 30.491 Fidelity Mutual Fund -1044. 173.426.83 Jun 2008 30. 2.00 Feb 2008 29. 4. 25. 8.72 DBS Fund 149.740.58 Investments .65 Mutual Fund Name No.19 May 2008 31.30 Jun 2008 30. of Schemes* Asset Under Management As on Corpus As on Corpus Net inc/dec in corpus ABN AMRO Mutual 368 Fund 926.611. 5.968 Canara Mutual Fund -208.138.940.206. 41. 3.23 May 2008 31.93 May 2008 31.97 Feb 2008 29. 19. 6.136. 4. 29. 3.122.56 May 2008 30.00 Mar 2008 31.86 Feb 2008 29.996.100. 53.993.00 Jun 2008 30.36 Mar 2008 31.943.40 Jan 2008 31.446.42 Deutsche Fund 744 DSP Merrill Lynch 226 Mutual 199 Chola Mutual 78 Robeco 59 22 348 Mutual 12 Global 54 Group Jun 2008 30.42 Feb 2008 29.86 May 2008 31.72 Jan 2008 31.72 Franklin Templeton 241 39 38 Mar 2008 31.424.396 Escorts Mutual Fund 26.894 AIG Investment Mutual Fund -932. 2.65 May 2008 30. 6. 146.00 Mutual Fund 804. 11.63 Benchmark Fund -656.14 Apr 2008 30. 12.00 May 2008 31.621. 7.898.276 Birla Mutual Fund -3980. 19.913.249.066.64 BOB Mutual Fund -10.37 Jun 2008 30.954. 4. 37. 64.
841.93 Jun 2008 30.28 May 2008 31.84 Mutual 160 Jun 2008 30.708.988.617.17 May 2008 31. 59.23 Morgan Mutual Fund -620. 15. 9. 17. 46.218 Mirae Asset Mutual 36 Fund -60. 13.934 ICICI 1998.97 Jan 2008 31.602 Lotus Fund -293.46 Jun 2008 30.70 Mutual Fund . 11.795.859.373.40 Prudential 442 May 2008 31. 12.98 313 Mar 2008 31. 2.513. 10.95 May 2008 30. 57.29 Feb 2008 29.608. 12.450.057.433.573. 10.66 -3802.103.48 India Mutual 226 Feb 2008 29. 15.580.762. 21.387. 9. 2.51 May 2008 31.274 HSBC Mutual Fund -1775.12 ING Mutual Fund -1236.605 JPMorgan Fund -308.660. 8.575.06 IDFC Mutual Fund -1654.11 397 Feb 2008 29.08 Apr 2008 30.659 LIC Mutual Fund 1715.88 Jan 2008 31.38 May 2008 30.291.844. 15. 2. 10.62 Apr 2008 30. 3.02 201 Jun 2008 30.416.98 PRINCIPAL Fund -3257.763. 43.71 267 Jun 2008 30.607 HDFC Mutual Fund 2529.25 May 2008 30.17 May 2008 30.40 Mahindra 197 May 2008 31. 2. 21.00 Jan 2008 31.351.96 Mutual 16 Jun 2008 30.42 JM Financial Mutual 191 Fund -1627.10 93 Feb 2008 29.95 Kotak Mutual Fund 351.228. 2.361.01 Stanley 3 Jun 2008 30.
Quantum Fund -2.66
Reliance Mutual Fund 16321.638 Sahara Mutual Fund -6.98 SBI Mutual Fund 1911.428 Sundaram Fund 1070.96 Tata Mutual Fund 356.585 Taurus Mutual Fund -58.53 UTI Mutual Fund -4117.114
29, 93,531.68 Jan 2008
29, 29,492.97 Jan 2008
29, 14,356.00 Jan 2008
31, 24,478.45 Apr 2008
31, 48,347.60 Feb 2008
* indicates currently in operation
MUTUAL FUND DATA FOR THE MONTH ENDED - MAY 31 , 2008
Amount in Rs. Crores
No. of new schemes Category launched during month
New Existing Total Total as May 31 2008 on as , 2008 on Inflow/ schemes schemes Apr 30 , Outflow
D Private Sector & Joint Venture :
Indian Predominantly Foreign Predominantly Indian Grand (B+C+D) Total
12 8 16 40
2832 1105 3979 9244
145600 51912 123265 408678
148432 154833 53017 53263
190170 172571 17599 73525 82697 -9172
127244 126730 417922 410836
192744 180667 12077 565807 538807 27000
. Direct holdings and pooled funds The equities held by private individuals are often held via mutual funds or other forms of pooled investment vehicle. usually employed by large private investors and pension funds.g.in the institutional environment many clients that own portfolios have what are called segregated funds as opposed to. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies. it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations. the pooled e. An alternative. Fidelity Investments or The Vanguard Group).g. Such holdings allow individual investors to obtain the diversification of the fund(s) and to obtain the skill of the professional fund managers in charge of the fund(s).71 Equity investment Generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. or in addition to. is to hold shares directly. the mutual funds are typically managed by prominent fund management firms (e. many of which have quoted prices that are listed in financial newspapers or magazines. mutual fund alternative.
72 Commodities Market .
nor investment. One focus of this article is the relationship between simple commodity money and the more complex instruments offered in the commodity markets. While Citibank has been providing art advisory services like art insurance. Hussain. WITH prices of paintings rising 10 times in the last two years. the recent surge in prices has driven Yes Bank. It covers physical product (food. i. Art galleries are involved in art valuations. in which they are bought and sold in standardized contracts.e. real estate investments. Jatin Das or Anjolie Ela Menon are sought after by art lovers not only for their aesthethic value but also as an asset. bond markets and currency markets cover those concerns separately and in more depth. art storage and using art as a tradable collateral for some time. . ABN Amro and Dawnay Day to start this service. The works of M. stock markets. These raw commodities are traded on regulated commodities exchanges. nor debt. electricity) markets but not the ways that services. including those of governments. This article focuses on the history and current debates regarding global commodity markets.F. mapping the pricing history of an artist or research on art. Articles on reinsurance markets. metals. can be seen as a commodity. three new financial entities have launched ‘art advisory’ services as part of Wealth management services. ART FUND Wealth management now includes art.73 Commodity markets are markets where raw or primary products are exchanged.
With the advent of private art funds and galleries. . Tie-ups with galleries In the art segment. The hiring specialists in the field for advisory. The service will largely cater to non-resident Indians seeking opportunities to invest in real estate in the country.” High networth individuals in India are increasingly looking at contemporary Indian art as a good investment. such as art or real estate.” Yes Bank is expected to launch a Wealth management service that will offer investment in real estate. “Contemporary Indian art will be at focus. It expects to kickstart the real estate service during this fiscal. tie-up with art galleries. for investment as a part of Wealth management products. art is becoming an emerging asset class. the execution depends on the client in conjunction with experts in the field. Diversified portfolio Individuals looking at alternative investments rather than the usual investments in equity-related products.”. ABN Amro advises clients on investment in art. However. “The bank is planning tie-ups with real estate consultant agencies.74 Art is now being treated as an investment and high net worth individuals are prompting banks to look at alternative asset classes. art and jeWellery. “Investments in alternative asset classes give clients a diversified portfolio across a variety of asset classes.
REAL ESTATE FUND India Real Estate Fund is a significant component of the Indian realty market flooded with Indian and foreign financial institutions. This combined participations from both along with contributions of the corporate houses has accelerated the growth of India Real Estate Fund. The majority of clients begin with an investment of around 4-5 per cent of their portfolio. The profits have encouraged financial assistance from not only domestic funds but also lured many foreign investors to participate in the India Real Estate Fund. . personal ability to take risk and most importantly. commercial and residential projects have boosted the real estate market in India. The growing increase in the industrial. The domestic financial institutions have also build up their investments like their foreign counterparts.75 It is difficult to generalise. some clients also invest in these asset classes to minimise risk because they are looking at protecting their capital. What percentage of assets would be allocated to alternative assets would depend on the client’s interest and ability to take risk. client’s interest.” targets customers with Rs 2-2. According to the banks. This has thrown open unlimited scope for the incoming of the India Real Estate Funds. The cooperating assistance from the government has further encouraged liquidity flow into the India real estate market sector.5 crore threshold for investment. The foreign contributions in the India Real Estate Fund have been witnessing a steady rise of 40%-45% per year. Investment in these asset classes requires a review of client’s age.
Kshitij Venture Capital Fund. promoted by Dewan Housing.76 Leading India Real Estate Fund: Some of the leading India Real Estate Fund are : 1. 4. • India Advantage Fund (ICICI) Kotak Mahindra Realty Fund India Real Estate Mutual Fund: The further involvement of the real estate mutual funds have improved the quality of the construction practices. The 10th Five-Year Plan has proposed that Securities and Exchange Board of India would regulate the India real estate mutual funds. Kshitij Venture Capital Fund .. DHFL Venture Capital FundDHFL Venture Capital Fund. 3. a group venture of Pantaloon Retail India Ltd. has a focus on developing properties rather than investing in real estate. invest in all the stages of the real estate projects.HDFC India Real Estate Fund (HI-REF). HDFC Property Fund. the first scheme HDFC Property Fund. . 5. 2. will be deploying funds exclusively in developing malls specially in western and southern India.
Hines 7.Sam Zell’s Equity International .Tishman Speyer 8.Columbia Endowment Fund 6.77 • Real Estate Investment Trusts: The primary difference between Real Estate Investment Trusts and a mutual fund is that investments made in the former are traded in real estate stocks and not invested in company stocks moreover they provides a heavier liquidity than the mutual funds.Broadstreet 4.Morgan Stanley Real Estate Fund 5. • India Real Estate Foreign Funds- The significant international investments in the India Real Estate Fund are like: 1.Blackstone Group 3.Warburg Pincus 2.
78 Insurance Product .
Around the world. The present insurance business is not even able to penetrate 20%?30% of the total population of 1. The order of the day will be to refocus on micro insurance in India to capture the huge potential of rural customers Unit Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. insurance again was opened to private players in 1999. 107 private non-life companies combined in 1973 to form the General Insurance Corporation.79 The modern concept of insurance practices in India started during the British rule in 1818 when Oriental Life Insurance Company was established in Calcutta. most of the insurance companies in India are not actively tapping the huge potential of the rural markets. with the Life Insurance Corporation of India created by combining almost 245 private life insurance companies. coupled with the bureaucratic mindset of LIC and GIC. indicating the willingness of foreign institutional investors to enter the Indian insurance sector. But since the very purpose of nationalizing the insurance sector got sidelined due to the monopolistic power it enjoyed. and the projected population figure by 2025 will be approximately 1. almost 15 life and 13 nonlife private insurance players (mostly joint ventures between Indian and foreign players) started operations in India. all predictions about future insurance industry potential in India are going to be distant dreams. India and China are going to be the targets for insurance companies. while the vast majority of the rural population was excluded from the insurance sector. and by 1956 the insurance sector was nationalized. . scholars and financial experts believe that in the next 5 to 10 years. During 2000-2006. India became independent from British rule in 1946.501 billion. So far. Unless the rural markets are given priority consideration.095 billion. But through all these major changes the actual impact was felt only in major urban areas.
This bond might cost 80 dollars today and after 5 years it will grow to 100 dollars. With the leftover funds the issuer purchases the options and swaps needed to perform whatever the investment strategy is. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers. such as a single security. The variety of products just described is demonstrative of the fact that there is no single. but the costs and . In today’s times. financial planning for children’s marriage planning also can be done with this. debt issuances and/or foreign currencies. the issuer simply invests in a risk free bond which has sufficient interest to grow to 100 after the 5 year period. swaps. Structured Product A structured product is generally a pre-packaged investment strategy which is based on derivatives. For example. indices. uniform definition of a structured product. Theoretically an investor can just do this themselves. ULIP provides solutions for insurance planning. and to a lesser extent. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). ULIP came into play in the 1960s and is popular in many countries in the world.80 ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. As times progressed the plans Theyre also successfully mapped along with life insurance need to retirement planning. commodities. a basket of securities. an investor invests 100 dollars. financial needs. A feature of some structured products is a “principal guarantee” function which offers protection of principal if held to maturity. options.
They have a fixed maturity. Structured products can be used as an alternative to a direct investment. as part of the asset allocation process to reduce risk exposure of a portfolio. . structured products were created to meet specific needs that cannot be met from the standardized financial instruments available in the markets. and have two components: a note and a derivative. and the derivative component provides for the payment at maturity. The derivative component is often an option. The note provides for periodic interest payments to the investor at a predetermined rate. Some products use the derivative component as a put option written by the investor that gives the buyer of the put option the right to sell to the investor the security or securities at a predetermined price. or to utilize the current market trend. As such. Composition Structured products are usually issued by investment banks or affiliates thereof.81 transaction volume requirements of many options and swaps are beyond many individual investors. Other products use the derivative component to provide for a call option written by the investor that gives the buyer of the call option the right to buy the security or securities from the investor at a predetermined price.
especially those products that present risks of loss of principal due to market movements. the hoarding and disposal plays a much bigger role in affecting the price.500 tonnes. compared to the annual production. are similar to those risks involved with options.82 Risks The risks associated with many structured products. Unlike most other commodities. According to the World Gold Council. rather than changes in annual production. the price of gold is mainly affected by changes in sentiment. This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal. . and as a result of those risks customers must be explicitly approved for options trading. and around 500 tonnes goes to retail investors and exchange traded gold funds. including hoarding and disposal. GOLD Factors influencing the gold price Today. About 3. the price of gold is ultimately driven by supply and demand.000 tonnes goes into jewelry or industrial/dental production. Given the huge quantity of hoarded gold. The potential for serious risks involved with options trading are wellestablished. annual mine production of gold over the last few years has been close to 2. because most of the gold ever mined still exists and is potentially able to come on to the market for the right price. like all investments and commodities.
At the end of 2004 central banks and official organizations held 19 percent of all above-ground gold as official gold reserves. a bank run might have been the result. Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year. have expressed interest in growing their gold reserves again as of late 2005. This is what happened in the USA during the Great Depression of the 1930s. some. Many bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks. looting. leading President Roosevelt to impose a national emergency and to outlaw the holding of gold by US citizens known as Executive Order 6102 which has since been ended. most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. announced that it was looking for ways to improve the returns on its official reserves. gold becomes more desirable in times of: Bank failures When dollars were fully convertible into gold. If people feared their bank would fail. which only holds 1. Low or negative real interest rates If the return on bonds. In general. China.83 Central banks and the International Monetary Fund play an important role in the gold price. European central banks. invasion. In early 2006. However. equities and real estate is not adequately compensating for risk and inflation then the demand for gold and other alternative investments such as commodities increases. Australia. limits gold sales by its members (Europe. United States.3% of its reserves in gold. War. which dates from September 1999. Although central banks do not generally announce gold purchases in advance. have been key sellers of gold over this period. such as the Bank of England and Swiss National Bank. both were regarded as money. An example of this is the period of Stagflation that occurred during the 1970s and which led to an economic bubble forming in precious metals. crisis . such as Russia. The Washington Agreement on Gold (WAG). Japan.
particularly when war is feared. Thus in times of great uncertainty. . the demand for gold rises.84 In times of national crisis. people fear that their assets may be seized and that the currency may become worthless. They see gold as a solid asset which will always buy food or transportation.
The daily turnover is growing constantly and has long ago surpassed the $1 trillion mark: forty times the size of world trade. A falling dollar/yen is synonymous with a rising yen because the dollar can be expressed in yen and. vice versa. the currency market cannot suffer a ‘crash’ (such as the stock market crashes of 1929 or 1987) through which the wealth of all market participants dwindles. they also stand out for other reasons: • The global foreign-exchange (FX) market can be considered by far the largest marketplace in the world. not only geographically but also with reference to trading volume. In the currency market eachloss is matched by an equivalent gain of the counter-party. the yen in dollars.85 Currency The modern hedge fund manager’s liberal tongue-in-cheek definition is: “If it moves up and down independently. By comparison. Another unique feature of the currency market is that it is active without interruption ‘round-the-clock’.” While currencies surely do a lot of moving up and down. • . For similar reasons. then it’s an asset class. as the Dow Jones for example. • • For the same reason the expression ‘short sale’ – so much maligned in equity trading – does not exist in currency trading because the short sale of a currency is equivalent to a purchase of the other currency. the dollar is never measured in units. • An important difference between currencies and other markets is that currency prices allow us to analyse also their reciprocal values.
This is not necessarily true for currency portfolios. Most delivering percentage returns.86 Portfolio composition of currency Modern portfolio theory postulates that relative risk can be reduced by diversification into at least six or more components. . Low correlation. The index serves as a proxy for available currency manager portfolio returns in general and has the added benefit of being uncorrelated to returns of other asset classes. liquidity and transparency are good enough reasons for currencies to be considered a prime candidate for inclusion in any investment portfolio.
89 Companies Providing Wealth Management Services .
Asset Size It is also one of the largest. PRODUCTS • • • • • • • • GEMS Portfolio Origin Select Portfolio Select Optima Klassic Portfolio . 3300 Crores. The above products are varying to high risk customers to low risk customers with a time origin of investment .90 Kotak securities INTRODUCTION is handling Wealth management department with a name of Kotak portfolio management. INVESTMENT PHILOSPHY Our mission is to provide clients with wealth management services that result in a performance that meets or exceeds their investment goals.Flexi Investguard Portfolio Core Portfolio NRI They are providing above products according to the customer requirement.They have a separate service for NRI asset management service. with Assets Under Management of over Rs. We believe that the tools of Modern . Exposing our clients to undue risk is contrary to this mission. ASSET CLASSES USED • • • • • Direct Equity Mutual funds Structured products Insurance products Fixed deposits.
E. best described as a ‘Community of Boutiques’. Multi-Strategy with Navneet Munot as Lead Portfolio Manager.91 Portfolio Theory empower us with a methodology for building superior investment portfolios.C. Morgan Stanley A. investment management and Wealth management services. This has been tested in all types of market conditions for decades and has consistently protected investor wealth from the perils of nondiversification. which aims to ensure that each investment strategy is managed by a dedicated team with specific experience in that strategy. (Across Capitalisations Equity) Fund. The Firm’s employees serve clients worldwide including corporations. • • Multi/Mid cap Equity with Jayesh Gandhi as Lead Portfolio Manager. institutions and individuals from more than 600 offices in 33 countries Mutual Fund has a unique investment team model. Morgan Stanley INTRODUCTION Morgan Stanley is a leading global financial services firm providing a wide range of investment banking. an open-ended equity scheme managed by Jayesh Gandhi. securities. Morgan Stanley which has been active in the country since 1993 and is seeking to develop an integrated platform in India. governments. which encompasses the full range of businesses the Firm conducts globally. PRODUCTS • Large Cap Growth Equity with Sridhar Sivaram and Amay Hattangadi as Lead Portfolio Managers. was .
As of December 31. institutions. Asset size The India Magnum Fund. Morgan Stanley Growth Fund (MSGF). has nearly 1000 investment professionals around the world and approximately US$577 billion in assets under management or supervision as of February 29. together with its investment advisory affiliates. Morgan Stanley launched its first domestic fund. By leveraging its global ‘community of boutiques’ structure and the strength of Morgan Stanley. 2007. Morgan Stanley Rs 4380 crores in assets under management. service and a comprehensive suite of investment management solutions to a diverse client base. marked the entry of Morgan Stanley in the Indian market. ASSET CLASSES USED • • • • Mutual funds Structured products Insurance products Fixed deposits. 2008 as the first fund open ended offering of Morgan Stanley Mutual Fund in India. Morgan Stanley Investment Management. an offshore fund set up in 1989. In 1994. which includes governments.92 launched in February. 2008. corporations and individuals. . MSIM strives to provide outstanding long-term investment performance.
require knowledge. Our goal is to find companies that offer a substantial ‘Margin of Safety’. It is a proven fact that Equities as an asset class typically tend to outperform all other asset classes over the long run. It is a very researchintensive discipline and eschews future projections. given your other commitments. and not to forget.93 INVESTMENT PHILOSPHY we use a strict value-investment methodology. We are only interested in the best value companies in the entire market. which both reduces the risk of losses. Moti Lal Oswal Wealth Management INTRODUCTION In today’s complex financial environment. and manage your investments professionally to achieve specific investment objectives. Value Investing has outperformed the stock markets consistently for more than 80 years. every investor seeks to maximize his returns on investments without capital erosion. income funds. While there are many investment avenues such as fixed deposits. whilst minimizing risks for our clients. investors have unique needs which are derived from their risk appetite and financial goals. . whilst allowing for superior returns. relieving you from the day to day hassles which investment require. equities etc…. Equity as an asset class also requires constant monitoring may not be possible for you to give the necessary time. time and a right mind-set. But regardless of this. focusing instead on what is the intrinsic value of a company today. Wealth Management runs focused portfolios comprising 15-25 stocks. bonds. They recognize this. Investing in equities. We believe this to be the best way to generate consistently strong returns.
94 PRODUCTS • • • Value Portfolio Bull’s Eye Portfolio Next Trillion Dollar Opportunity Portfolio ASSET CLASSES USED • • • • • Direct Equity Mutual funds Structured products Insurance products Fixed deposits .
590 Crores Investment philosophy We have established a disciplined and dynamic investment process that is rooted in the premise that asset allocation and investment style diversification consistent are the most returns critical with determinants acceptable in achieving of risk. time horizon. They are one of the leading portfolio service providers. the process accommodates that client’s specific situation. we continually update its application for the most current economic climate so as to keep our investment recommendations up-to-date and relevant. with asset under management worth Rs. yet dynamic in its application. Additionally.95 Asset Size Motilal Oswal Securities Ltd brings with more than 2 decades of experience & expertise in equity research and stock broking. . and other factors so that the result is a truly customized portfolio. remains constant. At the same time. risk tolerance. when applied to each client’s portfolio. The premise. investment levels Our investment process is solid and consistent at its core. as outlined above.
it believes in creating and delivering value by either going solo or by leveraging relevant and meaningful partnerships with global majors and domain specialists. insights and execution capabilities of Religare in the Indian context with the global expertise of Macquarie. . it believes in offering nothing short of the very best to its clients and the end consumers. In order to do so. The new brand for the venture-Religare Macquarie Private Wealth shall strive to proactively manage their Wealth and is hungry and keen to bring about a much needed refreshingly different paradigm shift in the Indian market place. The new entity is testimony to Religare’s firm commitment to all its businesses wherein. it The Religare and Macquarie are now 50:50 Joint venture partners in the newly created entity Religare Macquarie Wealth Management Limited.96 Religare Wealth Management INTRODUCTION Wealth Spectrum • Portfolio management • Art Intiative • Priority Client Equity Service In The continuous endeavour to provide the best of the product and services to the clients. They believe that this joint venture with Macquarie is a marriage of strengths that combines the sharp understanding.
• Elephant The Elephant portfolio aims to generate steady returns over a longer period by investing in Securities selected only from BSE 100 and NSE . PRODUCTS : • • • • • • Panther Tortoise • Leo Panther Elephant Caterpillar The Panther portfolio aims to achieve higher returns by taking aggressive positions across sectors and market capitalizations.97 Religare Macquarie Private Wealth shall draw strength and its core essence from the values of Religare’s “Diligence” and Macquarie’s “Forward Thinking”. The scheme is suitable for the “Medium Risk Medium Return” investor with a strategy to invest in companies which have consistency in earnings. growth and financial performance. It is suitable for the “High Risk High Return” investor with a strategy to invest across sectors and take advantage of various market conditions. • Tortoise The Tortoise portfolio aims to achieve growth in the portfolio value over a period of time by way of careful and judicious investment in fundamentally sound companies having good prospects.
This scheme is a mix of moderate and aggressive investment strategies. This scheme is suitable for investors with a high risk appetite. • Leo Leo is aimed at retail customers and structured to provide medium to long-term capital appreciation by investing in stocks across the market capitalization range. • Caterpillar The Caterpillar portfolio aims to achieve capital appreciation over a long period of time by investing in a diversified portfolio. Exposure to Derivatives is taken within permissible regulatory limits. The investment strategy would be to invest in scrips which are poised to get a rerating either because of change in business. Its aim is to have a balanced portfolio comprising selected investments from both Tortoise and Panther. .98 100 index. potential fancy for a particular sector in the coming years/months. stocks in their early stages of an upturn or for those which are in sectors currently ignored by the market. as these companies have steady performance and reduce liquidity risk in the market. This plan is suitable for the “Low Risk Low Return” investor with a strategy to invest in blue chip companies. business diversification leading to a better operating performance.
Religare Arts Initiative (RAI) Religare Arts Initiative (RAI) The Indian arts Industry is currently valued as one of the growing industries of the world market. and statures. RAI will work closely with the Indian art and design schools on the issues such as the curriculum and resources to bring them into the same quality domain as their international counterparts.99 ASSET CLASSES USED : • • • • • • Equities (Including International) Debts Commodities Structured Products Emerging Investment Classes. This initiative has been envisioned as a true champion “for the cause of arts”. genres. They are already in the process of creating a transparent and highly rich infrastructure that would involve cataloguing. and the development of an art aesthetic on an institutional basis. creation of an arts awareness program. Art prices in India are escalating every year. The RAI will provide a platform for artists of all ages. documentation. The Religare Arts Initiative is a venture of Religare Enterprises Limited with a view to provide a quality platform and infrastructure for Arts. art research. creation of spaces / canvases . RAI’s envisaged activities include building infrastructure for arts.
providing Art Advisory Services and much more. • Capital preservation. creation of International quality Gallery Spaces. ASSET SIZE : Rs. • Stock specific selection procedure based on fundamental research for making sound investment decisions. Investment Philosophy They believe that investors are better served by a disciplined investment approach. 410 cr.100 for the artists. Selling discipline and use of Derivatives to control volatility. • Focus on minimizing investment risk by following rigorous valuation disciplines. which combines an understanding of the goals and objectives of the investor with a fine tuned strategy backed by research. • .
That’s why Priority Banking has been tailored to offer you the highest level of service. PRODUCTS : Excel Banking In today’s fast moving. appropriate to your unique requirements and status. from routine banking and transaction management to more complex investment services and insurance advisory services.a much personalised Wealth management service that has been designed to help you make the most of your money. you need your bank to keep pace with your banking needs. you also get fee waivers on premium savings and current accounts and preferred pricing on a range of complementary banking products and services.101 Standard chartered INTRODUCTION Priority Banking – personalised Wealth management program at Standard Chartered Bank. What’s more. . without taking up most of your time. That’s why you need Excel Banking . technology-driven world. With the services of their personal Relationship Manager customer can access complete Wealth management solutions. It is their endeav their to be the Right Partner in all their personal and business ventures.
free debit cards and discounts on lockers. . Here are some of the features of the Parivaar savings account : • Your family can maintain individual savings accounts with the benefit of clubbing balances in grouped accounts. Phone Banking and Online Banking. • Anytime.26. convenience and essential tools for Wealth accumulation and preservation. Parivaar is much more than a regular Savings Account. • Globally valid ATM-cum-debit card can be used at 3.000 merchant outlets in India and 14 million outlets worldwide. anywhere access to accounts through ATMs.102 Here are the unique features of Excel Banking: • • • • • • • • Access to a personal Relationship Manager Exclusive privileges such as a free gold card. demat accounts and overdraft against term deposits Free multi-city cheque book for current account and savings account holders Express cheque collection and national clearing speed service Free demat account Extended branch hour for easier and quick transactions Redirection of interest into any account specified by you Phone Banking and ATM facilities for 24 hour access Parivaar Account Parivaar is a unique Wealth Management Solution from Standard Chartered Bank that offers your family flexibility. ASSET CLASSES USED : • • • Equities Debts Mutual funds. It allows you maintain your individual identity while allowing you to tap your family’s financial strength.
710 Cr. .103 • • Commodities Structured Products ASSET SIZE : Wealth Management Department has asset under management is Rs.
In addition to managing funds for institutional clients. use and enjoy it. insurance companies and other institutions. has led us to our development of a highly innovative new approach that we call our investment philosophy. It has significant experience in managing money for over 2000 institutional clients including central banks. Chicago. we believe that no one is better placed to help you acquire wealth and grow it. it is performance that suits you that really matters. We believe it radically improves the management of private client investments. Understanding that wealth means different things to different people. protect it and pass it on. pension funds. Our appreciation that every investor is complex and different and can have complex needs.104 INVESTMENT PHILOSPHY: We have developed a different and more focused approach to wealth management. Performance that reflects your attitudes and personality and gives you the confidence and reassurance to make decisions with clarity and speed. under the aegis of Van Gogh preferred banking brings to you a personalized and comprehensive solution through Their exclusive Wealth Management Services. ABN AMRO Asset Management offers tailored . ABN AMRO WEALTH MANAGEMENT ABN AMRO NRI Services. Our investment philosophy uses sophisticated profiling and portfolio construction techniques to aim for investments that deliver marketleading performance in the way you want. ABN AMRO Asset Management is the separately organised investment management division of ABN AMRO Bank. because while performance is key. ABN AMRO Asset Management is headquartered in London and Amsterdam with other main units in Atlanta. They will help you preserve and enhance your Wealth generated in India and abroad with a range of exclusive Investment and Insurance solutions. Hong Kong and Singapore.
They believe that excellence can only be achieved when investment performance and risk management are combined with high-quality client servicing. Their goal is to add value by offering risk-controlled outperformance in the context of specific benchmarks and investment horizons of their investors. while portfolios are often managed locally. This local knowledge is used as input for international co-ordination of the investment policy. It employs 2000 people worldwide in over 30 countries. ABN AMRO Asset Management’s approach to full-service investment management underlines Their commitment to longterm client relationships. .105 investment management services to private clients. All investment products benefit from the valuable sourrce of local expertise. with portfolio managers and analysts located around the world.
ABN AMRO Investment Services brings to you an unmatched blend of personalized services and an array of innovative and exclusive products suited for each of your investment needs.106 PRODUCTS INVESTMENT SERVICES : They recognize financial needs vary and there is no “one-size-fits all” approach. In fact. ABN AMRO Asset Management has significant experience in managing money for consumers as well as for institutional clients including central banks. ASSET CLASSES USED Expertise In All Asset Classes As a global. ABN AMRO Insurance Services brings to you an unrivalled combination of steady returns with minimum risk. and a spectrum of products including both fundamentally driven investment approaches and more quantitative investment processes. Optimal asset allocation among a wide range of investment products helps to create a portfolio best suited to your requirements and preferences. your savings from your time overseas can easily be channelised to meet your family’s needs for today and in the future. pension funds. insurance companies and other institutions. Your insurance plans will provide your family the added financial security in case of an unforeseen exigency. ASSET SIZE . These investment cum protection plans can help you create Wealth for funding your long term needs like education and marriages of your children and creating your retirement corpus. while maintaining the best balance between risk and return INSURANCE SERVICES : Being away from India doesn’t mean you have to compromise the safety and security of your loved ones. Their expert Investment Counselors ensure that your individual risk profile is drawn so that They can cater to your specific and precise investment needs. full-service investment manager. they offer their broad customer base capabilities in all major asset classes. Whether you are in India or abroad. They extend Their hand of partnership as your trusted financial advisors. They offer you a world of choice in insurance that can be customized to meet your individual needs.
falling interest rates and fluctuating market conditions require you to plan your finances carefully. Companies (within that business) that can generate returns on capital in excess of their cost of capital over a business cycle are preferred. Their Financial Planning Services are available for existing HSBC customers and are free of cost.40cr INVESTMENT PHILOSPHY Our investment philosophy takes root in the belief that fundamental research as an investment process yields returns and hence we lay emphasis on company specific research. HSBC Investments manages assets of over INR 10. investments in stocks are to be made at reasonable valuations. spread across 21 .107 US $40. Earnings growth of a company is the prime driver and over a period of time the stock price of the company shall be a slave of the same. The main objective is to help you to preserve your wealth in line with your investment objectives. Launched in India in November 2002. Own companies that can generate longterm. Inflation.684 crores. Hence. managed by qualified professionals capable of executing a well conceived strategic plan HSBC Financial Planning Services your portfolio can be managed in a fully discretionary manner from a selection of ‘Best of Breed’ third party panel of Portfolio Management Service providers. HSBC’s Financial Planning Services offer assistance to secure your future. sustainable earnings. the latter is just an avenue. The underlying principles that help us formulate the investment process: Investments are made in ‘businesses‘? and not ‘companies‘?. Celebrate important occasions in the future by managing your Wealth Well now.
the PMS business offers two product baskets. Currently.108 schemes and plans under the HSBC Mutual Fund umbrella. HSBC Investments has also soft-launched HSBC Alpha Account. the Portfolio Management services (PMS) Business to manage wealth for High Net worth Individuals. the . as of end August 2006. namely.
Non . The proposition.traditional Investments : Structured Products : Combinations of derivatives and financial instruments create structures that have significant risk/return features that may not be otherwise available in the marketplace. return requirements and market expectations. ASSET SIZE Globally. backed by comprehensive in-house research. we seek to bring to you opportunities in real estate space through venture capital funds available in the market.109 PRODUCTS • • Signature Portfolio Strategic Portfolio. ASSET CLASSES USED Traditional investments : Direct Equity Advisory : Customized advice on direct equity portfolios based on your risk profile and specific requirements. Real Estate Venture Funds : To provide you with diversification avenues which reduce the overall portfolio risk. Structured products are designed to provide investors with highly targeted investments tied to their specific risk profiles. Assets. . at the close of May 2006. which range from retail mutual funds and money market funds to lifecycle products to portfolios for private clients and institutions. Mutual Funds : Our open architecture philosophy and ‘Best of Breed’ selection of debt and equity mutual funds allows you to buy the top performing mutual funds available in the market. the Group Investment Business currently manages and distributes assets over US $ 297 billion worldwide. entails building portfolios with fresh funds or restructuring legacy portfolios to provide better risk adjusted returns.
expected future cash flows. . We constantly look at evolving these systems to address sales process requirements arising out of dynamically changing market conditions and customer needs.110 INVESTMENT PHILOSOPHY Need-based sales approach with innovation Our team works to suggest financial solutions based on your risk appetite. It analyses and generates a comprehensive financial plan based on your existing financial position. Sharing the knowledge We frequently organise wealth management events and investment seminars. Our Relationship Managers extensively use this tool to do financial planning for you taking into account your long-term objectives and / or medium to short term requirements. For consistent and uniform delivery of financial planning as per the defined customer need centric process. These funds help our clients build a long-term portfolio and in achieving long-term financial goals. Using customer insight. we have developed a financial planning tool. which lays emphasis on meritocracy. White-listed funds The concept of white listed funds lies in the bank’s open architecture model. We therefore treat technology as a vital ally in executing our philosophy of customer need centricity in a structured and uniform fashion. Technology is a potent weapon For consistency in the manner in which our Relationship Managers identify customer needs and suggest suitable solutions. where you can interact with investment experts and fund managers. there is a dedicated. inflation and identified financial objectives. We carefully look at various products available in the market and after thorough due diligence select product providers / schemes which adequately correspond to the needs of our customers. This provides us a platform to know and understand the market and economic developments and trends. we extensively leverage technology to support our sales process. White listed funds are selected based on various proprietary models that are used for intense quantitative analysis. Our indigenously developed systems like Wealth Management System. independent Sales Quality team to conduct regular quality checks close to the point-of-sale. Financial Planning System and Customer Relationship Management System have been built basis customer insights. profile and needs.
Over 2. Citigold has tied up with . To assist you with advice on various art investments. including half of all billionaires in Asia ex-Japan. Citi Global Wealth Management is a top-tier global wealth manager providing some of the best institutional capabilities available today.530Cr.000 wealth management professionals. or to help you in buying or selling art. including 600-plus private bankers. serve 6000 high net worth individuals and families.111 Citi Bank INTRODUCTION Citi has the largest footprint among wealth managers in the Asia Pacific with more than 20 offices across the region. ASSET CLASSES USED INSURANCE PRODUCTS Structured products : : Art advisory services :- In today’s market. art presents an attractive investment option. Serving both private and institutional clients. Citi Global Wealth Management taps the strength and resources of Citigroup to maximize value and service. The Global Wealth Management division at Citi comprises three of the most respected brands in wealth management: PRODUCTS • • • Citi Private Bank Citi Smith Barney Citi Investment Research. financial advisors and investment specialists. ASSET SIZE Rs.
Osians . Automatic roll over facility to renew your deposit when it matures. Overdraft facility of up to 90% against your deposit to fund another investment opportunity. archival infrastructure and professional capacity to systematically cohere various sTheirces of knowledge and provide select Citigold clients objective information on purchasing. . INVESTMENT PHILSPOHY Citi bank is investing customers portfolio according to which stage of life they are :• • • • Young adult Married and yet to have kids Parent with young kids. • Estate Planning Citi bank Time Deposits • • • • • Deposits held in units of Rs. An exclusive set of structured products like market linked products.Connoisseurs of Art Private Limited. valuing and selling art for seasoned connoisseur and emerging collectors. Parent with settled child. 1000 for easy liquidity. Citigold together with Osians will now help you strengthen your investments in art by providing you the following services: • Documentation and Archiving • Authentication. Osians is based in Mumbai and possesses the expertise. preserving. Certification and Valuation • Preservation and Restoration • Insurance and Custodial Services.112 a reputed art house. Flexible tenures from 15 days to 5 years. • Publication and Design Services • Art and Cultural Events Management • Corporate Gifting • Museum and Collection Building Services.
Clients on the rising number of dollar millionaires at present they are 100. ICICI Bank is using the services of global players like Merrill Lynch.000 in number in few year the number will definitely increase. City group.113 And according to expenses they are thinking of :• • • • Buying a house Going on a holiday Getting married Going abroad ICICI Wealth Management INTRODUCTION In India ICICI bank is a very Well known banks in the field of Wealth management. They are going to add another 1000 high network clients this year.2 lender banker ICICI expects to sustain the 70% growth in its private Wealth management . The eyes of ICICI Group Global Pvt. and UBS for catching the clients for Wealth Management business. ICICI Bank and its subsidiaries are engaged in the development of various attractive products (services) for the clients with net worth of $ 1 million. India’s No. ICICI Bank will float subsidiary for the purpose of WM activities in Canada & other market even as ICICI has rolled out ICICI Group Global Private Clients for those with net worth of $ 1 million or more. ICICI GCPC launched their business in Dubai very recently in the month of April-08 and caught 2500 clients.
A Asset classes used ONLINE TRADING : They also bring to you the best value for money through competitively priced brokerage charges for online share trading services from www.icicidirect. Their services include Portfolio Management Services and specially designed products that are Equity or Index-linked in nature.000 customers with investible surplus of at least Rs. you’ll find us there too! Life and General Insurance Asset SIZE Rs. Art Funds. They can help you select the right mix to suit you. ICICI Bank account and demat account. India has market of Wealth management about $ 600 billion. PRODUCTS N. So be it equity funds. Realty Funds. ICICI has 150. ICICI Bank savings account and demat account. Customised Products • Structured Products : Their Structured Product offerings are tailor-made to suit your investment objective and risk appetite. So. They give you waiver on the account opening charges too! With a 3-in-1 account consisting of trading. Private Equity Funding.114 business. where you look for growth and capital appreciation or debt funds for capital preservation. To add to this. 10 lakhs equity. real estate and private equity is driving the private banking business in India. • Alternate Asset Products : They offer products which complement your existing investments eg. With a 3-in-1 account consisting of a trading account. you can enjoy: • Competitive priced brokerage rates • Reduced account opening charges • Online share trading services MUTUAL FUNDS : They offer you advice on the entire universe of mutual funds.1230 Cr. Choose from an array of more than 15 fund houses with innumerable schemes. you can stay connected to the market at all times. if you’re looking beyond the stock market.co. .
8 million salary accounts.115 INVESTMENT PHILOSPHY Our approach emphasizes a globally diversified investment strategy designed to provide above average performance. Actually the institution is engaged in the task of providing financial advise to the Europe’s leading families. Government and various corporations for the last ‘7’ generations. Shanghai and so on. . The LCF Rothschild group has based its reputation in the area of Wealth management on its big banking experience. Singapore Hong Kong. The Axis Bank 5th largest bank by market capitalization in India provides payroll services to over 12000 corporates across 2. at below average risk. The market capitalization of Axis Bank was 235 million in the last year 2007 is engaged in the business of Wealth management. with its international presence in Dubai. AXIS BANK & WEALTH MANAGEMENT One of India’s leading private sector banker Axis bank also combined with Banque Privee Edmond de Rothschild Europe based Wealth management expertise institution & is going to make new standard for the NRI’s Wealth management.
116 Asset Size Rs.20 Cr. .181.
Demat Account :.The customer has to make available the following documents to the Bank :a. Any customer who has a portfolio having more than 30 lakhs can request for wealth Bank.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. Wealth Saving Account :. 3. The client has to open four accounts with the Axis Bank :a. 8 Photographs c.This account is used to park all the money of the customer which must be 30 lakhs or more than that .117 Procedure for entertaining a client in AXIS BANK 1. 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. Documentation :. 2.This is used to park all the assets in electronic form of the customer . One Address Proof 5. management services at any branch of Axis . The customer has to fill a risk profilier form. b. 4. Pan card Copy b.
The service provided by the Axis Bank is a Non. The whole 30 lakh or more is not invested in a lumpsum but it is invested in trenches in a period of 4 months.118 c. d.75 % brokerage either sell No charges on mutual or buy . 9. fund portfolio . .5% commission to Axis Bank on investing client money in their mutual fund. Wealth Account :.This account is opened in the mohar software to handle the portfolio of the customer. in which the decision of investing money is taken with customer recommendation.25 % only on purchase of mutual fund directly to the customer without any involvement of the Axis Bank. 6. All the transaction done for the customer either sell or purchase of the asset classes is done fully electronically through “Mohar” software.1% Annual Charges on equity portfoilio + 0.Discretionary type of service.(Asset management Companies gives 2.This account is used to buy or purachase the asset in a electronic way. 7. 8. ) Asset management Companies charges 2.Charges :. Trading Account :.
Minimal family responsibilities Propensity to spend/overspend Find investment/saving as Boring & waste of time. General Characterstics : Salary surpluses. Have had an average work life of 5-8 yrs. . Lack of proper information on investment. Nuclear family / Joint family.119 Coustmer Profiling at Axis Bank Based on different financial needs an average life cycle has been divided into 4 stages of Financial Planning as given below. Small family.especially if single or DINK. Junior or Mid level employment. Unmarried or recently married. Lack of inclination to invest. Upto 30 years of age 30-45 years of age 45-60 years of age over 60 years • Upto 30 years of age General Profile : Out of college/Professional Course. Do not need regular income from investment.
Save regularly and consciously. Should focus on long term capital growth rather than short term capital preservation. Use credit card prudently. Start to build an emergency fund. Biggest need is to save enough for a down payment for a house.120 Investment Needs : Repayment of professional studies loan. Can invest in high risk.as a balance of productive working life is high. Budget and keep track of expenses. high gain products . Plan for tax. Recommended Investment Style : Should be an aggressive investor. Have a long term investment horizon. Saving for white goods/new vechile. Recommendation :Negotiate tax-efficient salary.
Invest part of the surplus marked for equity investment . Product Recommendations : If salaried.121 Recommended distribution of asset :90 % investments in equity. 10 % investment in debt. Should start planning for or at least start thinking about retirement. in equity oriented funds like : o Diversified equity funds(60%) o Sector funds(10%) o Tax saving funds(20%) . If self employed/professional. should start a PPF/Pension plan investment to provide for retrials. approximately 24% of basic is necessarily invested in PF and can be supplemented with NSC & PPF. Should start SIP or recurring deposit through auto debit facilities to ensure disciplined and compulsory savings.
Shelter income from taxes. Household expenses are gradually increasing Realize the need for investment planning but lack time for investment planning. Already invested in a home/seriously thinking of investing in a home.usally with children Middle to senior level employees.if not started . General Characteristics : Surplus funds are limited. May have dependent parents Usually a personal vehicle owner.122 • Between 30-45 yrs : General profile : Married . Investment Needs : already. Plan for children’s higher education Start to build capital for retirement . Buy a home/service a home loan. Save for holidays/recreation. Have had an average work life of 10-15 yrs. Lifestyle expenses go up Children need/expenditure is of prime importance. Maintain an emergency fund & keep adding to it.
. Get household contents insured. Investment horizon is still more than 5 yrs.123 Recommended Investment Style : Can take medium to high risk. Keep adding to short term floating rate funds and bank FD’s for emergency fund. an accident insurance against any Get medical insurance for your dependent • Between 45-60 yrs.more tilted towards large caps for capital growth for retirement or seed money for home loan. Tax efficient saving through ELSS. Get disabilities. NSC and PPF to balance investments in equity. Follow thumb rule of 100 less your age in years as percentage of savings to be invested in equity. 25% in Bonds/PPF/NSC. Get a life insurance against your home loan. Should continue to focus on capital growth. parents. Product Recommendations :Diversified equity funds. Upto 60% of surplus funds can be invested in equities. Build up a direct equity. Invest in children specific mutual funds to provide for children’s higher education needs . 15% of surplus funds in liquid funds.
124 General Profile :Usually at the peak of carrer Grown up children. General Characterstics :surplus fund higher than in previous life stage. Childrens expenses continue to increase. High outgo on household expenses. 2-3 major oputflows of money (overseas education/marriage/set up business). Prepare a will. Rebalance your portfolio as per future needs. Medical insurance a must. Life style expenses still high. Decide when to reire. Retirement is not very distant. Revisit and revise financial goals. Consolidate and continue with wealth creation Start de-riskiking yoyr portfolio. High liquidity is a must. May have a inherited portfolio of investments from parents. Investment Style :Recommended Recommendations :- . Could opt for VRS. Pension plans must be started if not done already. Sensitized to medical and retirement needs. May need take care of dependent children. Acquire all necessary consumer durables while still to plug future outflows.
along with cash or liquid funds should be maintained for liquidity. Product recommendation : Prepay or finish all loans by 55 years of age. funds in equity. Keep all surplus funds in liquid/floater funds. . Short term deposits and floating rate funds. Shift focus from capital growth to capital preservation. funds in debt. Up to 60 % of surplus Up to 40% of surplus Investment in debt should be around NSC & Bonds. Keep investment in well-diversified large cap funds. Consolidate direct equity portfolio:gradually move part of it to high divinded yield stocks. Children may be living separately.125 Greater vunerability to risk hence focus on moderate balanced growth. Turning point time as investment debt now outpaces investment in equity. • Above 60 years of age General profile Retired/working part time Living in self owned house. Invest in balanced funds or MIP’s Phase out high risk sector funds gradually. Investment horizon comes down.
as it may be a risk. Too much cash should not be kept with oneself in the house. Money for traveling/gifts. High life expectancy hence present capital has to stretch over a long time. Preservation of wealth. Emergency funds for medical etc.needing medical attention. to be liquid and high. Recommendation Monitor expenses to fit into the retirement income. Need funds to pursue hobbies to keep busy. Life style expenses go down.126 Dependent parents. Investment needs.usally not available for the only source of regular income. General Characteristics Income Surplus from funds existing usually investments. Could have grand children. .may be part of family. Regular income needed from investments. Capital preservation is the primary need. Check excess liquidity as it needs to reduced returns on investments. Medical expenses go up. Have more leisure time. Ensure tax efficiency of returns on investments Explore second careers/part time employment. additional investments.
Senior citizen’s saving schemes. Income generation & consumption phase of investment. Growth portion of portfolio should be reduced to maintain only enough amount. FD’s with monthly schemes. RBI Bond Continue with direct equity portfolio with high dividend yield stocks.127 Do maximum purchase transaction through debit cards to avoid the needs of cash withdrawls. Maximum 15% equity exposure. Capital preservation of utmost importance. Avail all possible tax breaks available to senior citizens Switch some investments from equity to debt and money market products. Post office monthly schemes. Investment horizon low. . Go for systematic withdrawls plans(reverse of SIP). Silver health mediclaim. Recommended investment style Most chaleenging phase of life. Product Recommendations Invest in MIP’s and balanced equity funds. Low risk appetite.
136 WEALTH MANAGEMENT : INDIAN CONCERN .
S. The biggest Asian economy China stands on second position with 20%. According to the report. With the liberalization of the Indian economy and subsequent growth and prosperity across sectors. west Asia 16%. according to Celent. So They can understand that there is more opportunities in the Wealth management business in Asia specially in India. Risk aversion of Indian customers The repercussions of the mutual fund scandal of the 1990s are still evident. because the number of richer people grew in India & China where India is competing China. India is slated to become a US$1 trillion market (in assets under management) for wealth management providers by 2012. United States 4% and United Kingdom (UK) 2%. India & China posted the biggest gain in millionaires advancing by 23% & 20% respectively. Many Indian retail customers averse to diversifying their asset .A.138 Position of India in Wealth Management The wealth management industry in India is experiencing an evolutionary phase of development. the wealth management industry is poised to gain greater traction. and Merrill Lynch survey report. India has 23% growth in the last year. Celent segments the Indian wealth management market and looks at trends and opportunities at the provider end. SA and Merrill Lynch it was found that ranks of millionaires grew 6% in the previous year. with a target market size of 42 million households In the annual survey done by Cap Gemini. When They are watching the world wide increase in number of millionaires the facts collected by Cap Gemini.
PFS offerings can be tailored to emphasize the value of a lower-risk investing approach. 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. To date. 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. customers may need an introduction to the concept of private banking (or Wealth management). the PFS opportunity has been limited to a very small segment of the population. As part of the opportunity to define and develop offerings for India’s emerging HNW population. Shortage of skilled personal financial advisors.139 base into higher risk classes. “New money” mass affluent customers are not accustomed to Wealth management. To account for this conservative tendency.
145 Southern Asia :-INDIA.SRILANKA .
highlighted that markets in Asia Pacific and Eastern Europe are expanding the fastest. according to the latest findings from PricewaterhouseCoopers Management Survey. Almost 90% of CEOs feel that there will be at least some. CEOs’ plans for growth include entry into these lucrative markets. CEOs expect their organisations’ assets under management to grow at an annual rate of 34%. Buoyed by rising global wealth. consolidation in the industry and more than 50% of CEOs plan to open operations in new countries over the next two years to access new clients. their assets under management will increase at a staggering rate of 30% per annum. including by acquisition. 2007 with chief Global Private Banking/Wealth that. The survey reveals a period of exceptional opportunities for wealth managers. In Asia Pacific. The survey. which captured the views of senior executives of 265 organisations within the global private banking and wealth management industry. on executives predicting average. wealth managers everywhere are anticipating extremely high rates of profitable growth that have not been seen during probably at any other time. as organisations rush to service the new wealth creators in these regions. The survey .146 WEALTH MANAGEMENT ON GLOBAL PRESPECTIVE Wealth managers and private banks are anticipating unprecedented growth over the next three years. if not significant.
as wealth managers seek to become trusted advisers and gain new clients.147 highlights that this is a time when strategic choices have to be made by chief executives and finite resources have to be focused on serving existing clients as well as supporting highly ambitious growth plans. PricewaterhouseCoopers latest findings also revealed a real commitment among wealth managers to increase ‘share of wallet’. . compared to previous surveys. globally as well as in emerging economies like India. Currently under 50% of wealth managers hold more than 40% of their clients’ investable wealth but over the next three years this proportion is estimated to increase dramatically to almost 80% of wealth managers holding over 40% of a client’s wealth. Share of wallet has emerged as the new key performance indicator.
The balance between emerging market strength and mature market recovery is likely to persist through 2008. . Deepening credit market woes threaten growth prospects in key mature markets. According to World Wealth Report 08.153 PROJECTIONS After studying the overall concept of Wealth management we can say that it has various aspects some are favorable and friendly for the economy and some are very dangerous for the economy. Capgemini : The early months of 2008 revealed further complications to the conditions facing the global economy at the end of 2007. heightening uncertainty among investors regarding the nearterm global outlook.Merrill Lynch. with the short-term outlook subject to variability given that aspects of potential risk may still be unknown. However. still-strong fundamentals in emerging markets are likely to sustain high levels of growth—a divergence that will likely impact consumer and business segments and shape policy choices. These challenges will shape global HNWI growth prospects going forward. High risks of inflation in emerging markets. the global economy has two distinctive obstacles to overcome: • • Inhibitors to growth in mature markets. By and large.
Thus. HNWIs can move freely. this evolution will make HNWI investments less vulnerable to market downturns. This projection is based on several factors: Recent economic downturns in the United States have been shorter by historical comparison attributed.155 Given 2007 performances and taking into consideration recent developments in world markets. in part. reallocating their funds to other areas. spread across international boundaries and asset classes. often more quickly than the troubled market itself can react and recover. their investments become increasingly mobile. Ultimately. Similarly. Moreover. the current complications are not expected to weigh on growth prospects as heavily as they may have in the past. to increasingly effective monetary policy. .1 trillion by 2012. as HNWI portfolios continue to grow more diversified over the long term. research suggests that emerging markets’ recoveries have outpaced analysts expectations. the projection of global HNWI wealth will grow to US$59. as growth in one region or market slows.7% per year. advancing at a rate of 7. Therefore.
moneycontrol. accessed April 2008.rts. 9. IBM Business Consulting’s Wealth Management Report. 6. January 2008.www. January http://www. The Economist Intelligence Unit. 11.www. of Markets 2. “Year-End Review Journal. 7. Axis Bank Reports. . Investment Strategy .Merrill Lynch.156 BIBLOGRAPHY 1. World Wealth Report 2008 .” Russia The Wall Trading Street System. & Finance.google.ru/en.com. 4.com.ICICI Prudential Asset Management Report.Wealth Management July06 private banking poll-r8 report.No. 8. 10.6 August 2006 Societe Generale Asset Management. 3. 5. Capgemini. 2008.Goldman Sachs Asia Pacific Report. 2.
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