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MASTER OF FINANCE AND CONTROL (MFC) SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR AWARD OF MASTER OF FINANCE AND CONTROL OF UTKAL UNIVERSITY, ODISHA.
SUBMITTED BY: PRITAM KUMAR DAS ROLL-NO-12 OF ARYA SCHOOL OF MANAGEMENT & IT, BHUBANESWAR. Guided By Mr Susanta Kumar Satapathy ARYA SCHOOL OF MANAGEMENT & IT, BHUBANESWAR.
S. 11 25-32 Introductory Chapter. 53-54 Suggestion and 55-56 Recommendation. Conclusion. 8. Planning Process. 9. 64-65 20-24 18-19 . Scope of the Study. PAGE NO. 5.2 2. 2. Objective of the Study. 2.2 6.3 3.3 6. .1 2. 1-2 3-5 6-17 Review of the literature.1 6. 6. 6. 10. Theoretical Background.4 7. 4. 1. Data Analysis and 33-52 Practical Representation of the Plan. Formation of Goals.NO. Benefits of Financial Planning. Title of the Project. CONTENT Rationale of the Study. Appendix 57-63 Bibliography.
RATIONALE OF THE STUDY 1.RATIONALEOFTHESTUDY .
By viewing each financial decision as a part of a whole. its objectives. evaluating existing resource and designing the financial strategies that help the person to achieve those goals and enables him to earn maximum returns at minimum level of risk. I hope it will prove beneficial to me in developing my further career. One of the special services brought out by them is „FINANCIAL PLANNING SERVICES‟ which aims at identifying a person’s financial goals. you may help your client consider the long term and the short term effects on his life goals. responsibilities of Financial planner and the study of various other issues related to Investment planning. It allows him to understand how each financial decision affects other areas of finance. But the need is to be able to effectively and efficiently manage investments in order to keep maximum returns with minimum risk. role. The invention of new technology and services by financial institutions has given the consumers a wide range of investment avenues to invest in. as it has given me actual knowledge of this service along with its working and how the financial planner plans and manages the portfolio. Financial Planning helps you to give direction and meaning to your client’s financial decisions. buying a particular investment product may help your client to pay of his mortgage faster or may delay his retirement significantly. The stock markets have become attractive investment options for the common man. I am inclined to this topic. The main objective of this project on FINANCIAL PLANNING is to review the real meaning of Financial Planning. In near future a proper financial planning is required to invest money in all type of financial product because there is good potential in market to invest. framework. You will help them feel more secure and more adaptable to life changes. Keeping this in mind the Financial Institutions provide number of services to its customer with a wide spectrum of investment opportunities. Tax planning. In order to retain their customers they provide them with special services besides traditional services. Asset allocation and Retirement planning.The rapid growth of capital markets in India has opened up new investment avenues for investors. . once they can measure that they are moving closer to the realization of their goals. For example. it has guided me to understand this so called complex world of investment and financial planning and also increase my knowledge to such extent. Moreover.
To give a detailed summation of all recommendations. To also give comprehensive economic overview of the client’s financial plan. . To follow step-by-step implementation and monitoring plan. TITLE OF THE PROJECT “FINANCIAL PLANNING FOR AN INVESTOR” IN FUTURE INDIA INDUSTRIES & INFRASTRUCTURE LIMITED.OBJECTIVE OF THE STUDY 1. supported by financial statements. To study the client’s financial objectives anchored to current resources. TITLE OF THE PROJECT OBJECTIVE OF THE STUDY 3. OBJECTIVE OF THE STUDY To take an overview of the client’s in short and long term goals. B. To suggest appropriate financial plan for mutually selected recommendations. SCOPE OF THE STUDY 1. 2. OBJECTIVE OF THE STUDY A. To have the client’s current financial strengths and weaknesses and implications of financial plan.
Systematic Savings in Real estate or Land Property Cash Flow Management Debt Management Managing Risk through Financial Planning Distribute residual wealth through estate planning Financial Planning is a profession for people with good communication skills combined with knowledge of how financial service industry works. Most important is to understand that the suitability of products you are guiding people to purchase is based on their Risk Appetite. Financial planners can guide individuals to achieve their ultimate aim of spending retired life peacefully without compromising living standards. SCOPE OF THE STUDY Personal Financial Planners are not just for wealthy people. A Qualified financial planner will provide advice on.C. seeing their children’s education and enjoy an active retirement . Every individual can benefit from objective help to create. family goals and other lifestyle objectives systematically without any anxiety. services and tax laws that might be good for their clients. a brokerage house or have own practice. accumulate and utilize wealth to fulfil one’s personal goals. Age and Time Frame of Goals and Objectives. insurance company. grow. A Trusted Financial Planner can play an important role in people’s lives helping them to achieve dreams such as owning a home. As a Financial Planner one could work for a bank. This is a field that requires a life time of continuing education. Financial Planners need to update themselves constantly on new products.
COMPANY PROFILE .
Basically Financial Planning is the process of meeting life goals through the proper management of your finances. When it is carried out . this has changed in such a manner that it will be difficult for one to maintain a decent standard of living . Below my question were answered.and the most important What is the benefit of carrying it out. How it is carried out . There is a need for financial planning because the financial situation in the country has changed in the last few years. Why it is carried out.Who carries it out.REVIEW OF LITERATURE REVIEW OF LITERATURE This project was undertaken to know what exactly is the Financial Planning.
The process that is followed by the FUTURE INDIA is the planner first discuss the general recommendations with the client informally.with the current means this requires financial planning and in addition there are also several individual specific factor that has to be fulfilled. A detailed summation of all recommendations. . The financial plan for mutually selected recommendations. this allows the clients to indicate their preferences and opinions on the options that have been designed. setting life goals. The process involves gathering relevant financial information. A The client’s current financial strengths and weaknesses and implications of The client’s financial objectives anchored to current resources. A step-by-step implementation and monitoring plan financial plan. A comprehensive economic overview of the client’s financial plan. examining customer current financial status and then coming up with a plan for customer on how he can meet with his goals. supported by financial statements. Once the planner and the client agree on the recommendations. Financial planning provides direction and meaning to one’s financial decisions. a concise written proposal is prepared along these lines: n overview of the clients short and long term goals.
RESEARCH METHODOLOGY It is a way to systematically solve the research problem. and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis – Clifford Wood. organizing and evaluating data. It is the arrangement of condition and analysis of data in a manner to combine relevance to the research purpose with economy in procedure. . In general methodology is an optional framework within which the facts are placed so that the meaning may be seen more clearly. It may be understood as science of studying how research is done scientifically.RESEARCH METHODOLOGY DEFINITION: Research refers to „a search for knowledge‟. making deduction and reaching conclusions. It is the heart of the planning. collecting. it will ensure that the client need will be served. In it we study the various steps that are generally adopted by the researcher in studying his research problem along with the logic behind them. It can be defined as a scientific and systematic search for pertinent information on a specific topic. Research design is a plan structured and strategies of investigation. formulating hypothesis or suggested solutions. The sources of data shown that designing of a research plan calls for decision on the data sources are research approaches (primary and secondary data) research instruments (observation survey experiment) sampling plan and contact methods (personal interviews). Research comprises defining and redefining problems. If the design adheres to the research objectives. RESEARCH DESIGN A research design is the determination and statement of the general research approach or strategy adopted for the particular project.
Quantitative Data Quantitative data provides specific information concerning a client along with numerical details Concerning his/her financial status. the scope of the study is defined to satisfy following objectives: Understand the necessity of financial planning. risk tolerance etc. a questionnaire has to be designed.Qualitative. The questionnaire was designed in such a manner to achieve the objective of the research. Identify various investment alternatives that can fit in client’s profile.Quantitative . The Financial planner has to have bottomless knowledge of markets. For visiting the customers and publics to collect the relevant information. It is intended to provide a bird‟s-eye view of the client’s assets. Research Objective: The Financial Planning is vast in nature. For this it is important to obtain the complete and actual information about the subjects. TYPE OF RESEARCH In this project Descriptive Research has been used.General family profile . funds etc. In order to achieve the objective it was necessary to talk to the customers and public to draws the conclusions regarding the objective. Study and apply the financial planning process. Examples of quantitative data include the following: 1. The sample size taken is 100 customers and publics. and Provide the client in an appropriate asset allocation mix based on certain factors like time horizon. Considering this fact. It also provides the basis for the many financial analyses that the financial Planner needs to perform. Descriptive Research: This is kind of research structure which is concerned with describing the characteristics of the problem. In this way the main purpose of such a research design is to present a descriptive picture about the marketing problem on the basis of actual facts. This project consist of Quantitative as well as Qualitative data as data collect for preparing plan is both the types Gathering Data There are two types of data to gather from the client .
Examples of qualitative data include the following: Goals and objectives Health status of client and family members Interests and hobbies Expectations about employment Risk tolerance level Anticipated changes in current/future lifestyle Other planning assumptions. funding a child's college education and expenses. employment status.lient-owned business information 11.Details on current investments 9. etc LIMITATIONS: . Knowing a client's specific goals. or travelling extensively during retirement is important to the success of any financial plan. starting an expensive hobby just before retirement. Websites. and fears.Copies of wills and trusts Qualitative Data Qualitative information provides general information concerning a client's goals.Cash inflows and outflows 5. Data Sources: SECONDARY DATA: The secondary data includes information obtained from various sources which includes FUTURE INDIA . attitudes. hobbies.2. risk tolerance level. Business Newspapers.Names.Investment Product information 6. addresses. Books. health status.Assets and liabilities 4. and phone numbers of family members 3. such as planning to move when retiring at age fifty-five. lifestyle.
Formulation of Goals 4. Introductory Chapter 2. Time limitation THEORITICAL BACKGROUND 1. The Benefits of Financial Planning .1. The Planning Process 3. 2. 3. The project work is mainly based on the above mentioned sources of information. Limitation of client in investing in particular kind of asset based on his age.
For the success of the financial planning exercise. the Financial Planning Standards Board recommends the following 6-step process:Let us look at the above steps in more detail. Process of Financial Planning:Financial planning is a highly personalized service. gather and analyze data and prepare a financial plan for now and for the future. The role of the financial planner is not to suggest get-rich-quick schemes.Introductory Chapter:Definition:Financial Planning is the process of identifying a person‟s financial goals. Also remember that financial planning is a twoway interaction between the client and the planner. It requires the planner to collect as much information as possible about the current resources. technical depth and complete dependability. Establish the Client-Planner Relationship Before approaching a client. A financial planner has to p Organize their finances . Preparation and implementation of the financial plan is a long-term relationship and not a one-off exercise. evaluating existing resources and designing the financial strategies that help the person to achieve those goals. assets and liabilities of the client. To prepare and implement a comprehensive and effective financial plan. Both the planner and the client have certain responsibilities to make the exercise a success. Preparation and implementation of the financial plan is a long-term relationship and not a one-off exercise. it is to evaluate and study the clients' needs. The Planning Process:The preparation of the financial plan is a multi-dimensional process. It is not and should not be treated as a one-way prescription which is to be given by the planner to the client. It is not a product. Confidence is built when the planner can demonstrate adequate knowledge. 1. It is a cyclical service that constantly repeats as client needs change over time. it is important for the financial planner to clearly understand his own role. The planner needs to analyze the collected information from a number of different aspects to develop an optimal financial plan. Rather. it is essential that the prospective client should have complete confidence in the financial planner‟s capabilities.
objectives and requirements. Such an agreement is also referred to as the 'Letter of Engagement. Gather client’s data and determine goals and expectations The next step involves researching and collecting information that will help the financial planner design and implement a successful financial plan. The first helps the financial planner understand where the client is at the moment and the second helps. it is recommended that the financial planner should enter into a client agreement which formalizes the relationship with the client and establishes the basis on which the service would be provided. To prevent unnecessary litigation and disputes in the future. or director? Repair a plan that helps his clients:Client agreements and confidentiality clauses When a client utilizes the services of a financial planner. the planner needs to answer the following questions: What is the most immediate concern of the client? What is the client’s current financial situation? What are the client’s immediate and long-term needs? What is the gap between the client’s needs and the current financial situation? What services can you apply to the client’s needs? How would the client benefit from your service portfolio? What is the estimated time frame to complete the plan and accomplish goals? Is your role likely to be of an adviser. There are two aspects to this exercise:(a) Understanding the client's current financial position. Formulation of Goals Financial goals are the milestones that the client hopes to reach with the help of his financial resources. Consequently. (b) Getting to know the client's financial goals. the planner is under obligation to maintain utmost confidentiality of this information. motivator. These milestones could be concerning different aspects of life like:- . he/she shares financial and other personal information with the planner that is normally not shared with anyone else. Improve their cash flows Lower their personal income taxes Plan for their retirement Improve their investment performance Lower their investment risk Minimize their estate settlement costs To achieve this.' 2. The client-planner relationship presupposes a very high level of trust between the two parties. teacher. the financial planner understands where the client wishes to go.
Realistic.Saving for marriage / childbirth Buying a new car / house / electronic equipment Creating a corpus for retirement Creating a corpus for children's education Adequately insuring self and family Creating cash reserves for emergency usage etc. The client's tolerance towards risk. current health status etc.This done. quantifiable goals for financial planning. Develop appropriate strategies and present the financial plan A financial planner needs to develop appropriate strategies for the client in the following areas: Cash flow management Investment Product planning Investment planning Old age planning Estate planning Cash flow management . and To be achieved within a specific time period Once the client has stated clear. This is necessary because most clients do not have the resources to fulfil all their goals. needs and current financial situation Preparation of the Client's Personal Financial Statements Preparation of the Cash flow Statement and the Budget Prioritizing Goals The next step is to prioritize the financial goals of the client and work out the amounts that are required to be invested towards achieving these goals. 4. Therefore it is important for the financial planner to know where the money to invest will be coming from. The financial planner should ensure that the goals are: Specific. the next step is to rank those goals in order of importance. the client would need to start saving and investing appropriately. To achieve most financial goals. the financial planner needs to work out the amount of money available for achieving these goals. need to be kept in mind while evaluating alternative Strategies. investment preferences. Measurable / Quantifiable in money terms. Evaluate Qualitative Factors Qualitative factors have a significant bearing on the financial plan for a client. The financial planner must make it clear to the client that less important goals must be sacrificed or postponed to achieve the more important ones. 3. Analyze client‟s objectives.
education. The Benefits of Financial Planning Financial Planning helps you give direction and meaning to your client‟s financial decisions. retirement. Once the cash flow management plan is in place. personal property. they need the planner's help to plan for their insurance. You probably own assets that have many different forms. buying a particular investment product may help your client to pay off his mortgage faster or may delay his retirement significantly. including cash. generally it is the starting point of the planning process. Income Cash Flow Management Daily Expenses Emergency Funds Capital Accumulated Income Cash Flow Management Daily Expenses Emergency Funds Capital Accumulated Once your clients have planned to maximize income and minimize spending. reserves for emergencies and capital accumulation. and their estate. you may help your client consider the long term and the short term effects on his life goals.expenses. real estate etc. It allows him to understand how each financial decision affects other areas of finance.Cash flow management is the means for funding client‟s goals in other planning areas. You will help them feel more secure.Your assets are the things that you own. income tax. Definition:- . For example. the inflows have to be channeled in one of the three areas . Assessing your current wealth Net worth: . By viewing each financial decision as a part of a whole. investments. therefore. investment.
The net worth of a person is a measure of a person‟s financial position as of the date of the personal balance sheet. the amount left over would be your net worth. if you sold all your assets for the values stated and paid off all your debts. In other words.Amounts Owed = Net Worth SL NO A. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 B ASSETS & LIABILITIES ASSETS CASH BANK ACCOUNT CASH SURRENDERVALUE OF LIFE INSURANCE CASH SURRENDERVALUE OF ANNUITIES MARKET VALUE OF INVESTMENTS MUTUAL FUNDS STOCKS BOUNDS OTHERS MARKET VALUE OF HOUSE/REALESTATE INVESTMENT PROPERTY VEHICLE HOUSE HOLD FURNITURE/APPILIANCE JEWELLRY/PRECIOUS METALS COLLECTIBLES OTHER TOTAL ASSETS:----LIABILITIES CREDIT CARD BALANCE BILLS OUTSTANDING OUTSTANDING LOAN BALANCE TAX DUE OTHER TOTAL LIABILITIES:----NET WORTH (ASSETS –LIABILITIES) AMOUNT . This relationship is shown below: Items of Value .Your net worth is the difference between the totals of your assets and liabilities.
DATA ANALYISIS AND PRATICAL REPRESENTATION OF THE PLAN .
. and actions.CONCLUSION The overall study about each and every aspect of this topic shows that Financial Planning is a dynamic and flexible concept which involves regular and systematic analysis. Look at the bigger picture and should not expect unrealistic returns on the investments and value of the plan lies in its implementation and it accurately reflects what you are personally trying to accomplish. It can also be concluded that client or Investors should start planning soon. By constructing portfolio we can only minimize the un-systematic risk we cannot reduce systematic risk. . It can also be concluded that with the combination of different stocks we can reduce the risk and increase the returns of a portfolio. A proper Fundamental & Technical Analysis should be done before selecting any particular stock for the portfolio. It minimizes the risk involved . judgment. set measurable goals. Financial planning service is very important and effective investment tool for meeting your life goals through the proper management of your finances. proper management. Financial Planning Service which was not so popular earlier as other services has gained lot of importance and popularity & will gain more importance in future as people are now understanding the importance of it.
For example What should be your lifestyle after retirement. Investors should be made aware of the benefits. or that to send children to good Schools Start planning soon: . Investors should be made to realize that ignorance is no longer a bliss and what they are losing by delay in planning.SUGGESTIONS & RECOMMENDATIONS To the Client: The most vital problem spotted is of ignorance. Set measurable goals: Set measurable goals that you want to achieve with a specific time.
Investors could also try to increase the spectrum of services Offered. The planner should try to charge a nominal fee at the beginning. But if no then they could go for offering more services and benefits at the existing rate Bibliography . budgeting. Understand the effect of each financial decision: To realize that each financial decision that is taken affect several areas of his life. The most important reason for not availing the serves of planner was spotted to be expensive. systematic transfer plan. makes one better prepared to meet changes and handle emergencies. The planner should try to highlight some of the value added benefits. investing and regularly reviewing finances early in life. Be realistic in terms of expectations: Financial planning is a commonsensical approach to managing finances to reach life goals. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. To The Planner: The planner should target for more and more young investors. etc. Developing good habits like saving. It is a lifelong process. There are certain extraneous factors like inflation.Delay in financial planning affects the whole big picture that he has in mind for himself and his family. changes in macroeconomic policies or interest rates that may affect financial results. such as tax benefits.
futureindiagroup. Financial Management . NEWSPAPER REFERED: 1.BOOKS.M Pande II. Economic Times II. Kane & Marcus I. BOOKS REFERED: BOOK NAME 1. Security Analysis & Portfolio Management 2.in . AUTHOR NAME Bodie.com www. WEBSITES USED: www. NEWSPAPERS and WEBSITES: - I.nse.
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