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Study on perceptions of advisors regarding Mutual Fund business & Investment habits of people
(A SEMI URBAN AREA PERSPECTIVE)
With reference to summer training at
PRUDENT CAS LTD
Submitted to: Prof. Gurmeet singh Submitted by: Rungta Preeti V. Enrollment no. 117140592004
GLS Institute of computer technology- MBA 2011-13
Financial market has always been talking about the investors. Companies offer financial products and their returns but in this competitive market, recent trends say that this is dependent on the mediators. Mediators are the advisors. This is important to know the channel because the channel is very important for sustaining in competition. This report is prepared for such an indirect channel where the mutual fund companies are depending upon the mediators and these mediators are advisors and advisory firms. Hence, until they find good advisors and agents, the expansion is not possible. Return is an uncertain part which can be controlled at a certain level through mutual fund but the awareness part is in companies’ hands. They need to focus on the agents and find new opportunities. In urban areas, people are aware about their money’s investment options but in a country like India, man y rural and semi urban areas exist where savings are done wisely but investment is leading to few hands who either don’t know about the investment or try to fill their own pockets.
A survey takes many days and many tasks. While doing this work, I was not alone. There are many people who directly or indirectly are joined to this report and helped me in learning and finding many things important for this project and my understandings. The first thanks for the GUJARAT TECHNOLOGY UNIVERSITY for giving us the opportunity to learn in the open market and prepare this report. Then I would like to thank the director of our college Mr. Hitesh Ruparel who is always working as the indirect but the most important hand to us. This is his efforts that we are getting good opportunities in the market. I thank my internal guide Prof. Gurmeet Singh who has supported and guided me in this project at each and every phase of the training. A hearty thanks to PRUDENT CAS LTD for allowing us to join them and work under them as a fresher and a special thanks to Mr. Ayaj Mansuri and Mr. Chirag Modh from the indirect channel for their continuous support. They have spent a lot of time behind me for making me learn many things and help me in each difficulty I faced on the field. Last but not the least, thanks to all those people who directly or indirectly helped me in understanding the facts, filling up the questionnaire and spending time in making this research what it is in this report.
Some are not even interested in knowing more about it. The inflation rate is growing faster while the investment returns are not high. the benefits of mutual fund are not entering into this market. increasing competition in the advisory business due to uncertain markets. they are good at LIC and don’t want to enter in this business. In this condition. Advisors are not getting into this business at this place hence. They have a perception that mutual fund contains same risk as the stock market has. They give an equal priority to savings and want some good returnable products. The market has dramatically increased and decreased twice in the last 5 years. The current market situations in the country are very uncertain. The factors that are forcing the advisory business include the foreign companies coming in for getting investment. They feel that the business is going very down and the income of agents is very low. There are many stocks which have continuously performed well but people don’t know about this. This is a semi urban area. The second group is of the investors who invest their money in the market either directly or by way of advisors. Hence. people don’t want to take risk. The survey is on two groups. On the other hand the investors are having an overall 40% saving perception. The sample size is kept 50 and the location is chose Kadi. 4 . people are good at savings but their investments are poor. The investors are investing much of the money in the banks and FDs but the return is very low. result of a survey is analyzed. low commission for advisors and a very tough competition from other financial products making it difficult to get agents. The first group is insurance agents who are considered as the potentials for mutual fund advisory business. So there is a need of advisory and a new business arose. In India. Due to lack of knowledge regarding mutual funds. They are also not aware of the mutual fund business completely. investors are not being able to take the advantage of it.EXECUTIVE SUMMARY This report is prepared in context to the mutual fund advisory business. they don’t like to invest in it. Hence. The survey said that most of the agents who are working in Kadi as LIC agents are not interested in working for mutual funds business. In this report.
People in these areas are more disciplined towards their advisors for any field and their shift is very less. The companies should raise the benefits for advisors and advisories should find the fresher for this business and train them from beginning. This will solve the loyalty issue and provide them a long run benefit to sustain in the market. they should try to enter in this area that contains a lot of investment opportunities for them. The firm anticipates that this business will grow wide in next few years. 5 .As a suggestion to Prudent. So this training cost will be an investment and covering such semi urban areas from beginning will strengthen their base.
No.6 3.2 Company About overall work What prudent does for advisors who join? 28 29 31 4.3 3.9 Introduction Research methodology Industry Structure of mutual fund in India Types of schemes How mutual fund industry works? How does advisors earn? Why mutual fund is so important? MF activities for previous years 10 major sectors in India Why mutual fund advisory MF advisory industry five force analysis 8 11 14 15 16 17 18 19 20 22 24 25 4 4.8 3.1 4.2 3. Particulars Preface Acknowledgement Executive Summary Page No.4 3. 1 2 3 3.7 3.TABLE OF CONTENT Sr.3 5 6 SWOT of prudent Location of survey.Kadi Literature review 33 35 37 6 .1 3.5 3.
4 Hypothesis together Reviews of advisors in open ended questions 77 78 7.7 7.3 7.2 Data analysis and hypothesis testing of 2nd questionnaire 64 7.1 Analysis Data analysis and hypothesis testing of 1st questionnaire 41 42 7.5 Reviews of investors in open ended questions 80 8 9 10 11 Conclusion Findings and suggestion Bibliography Annexure 81 84 87 89 7 .
Introduction 8 .
This research leads to two sided approach where we focus on customers as well as advisors. help advisory firms to get more advisors and help the mutual fund companies in selling their products. this research tries to understand the perception of investors regarding the savings and investments. Hence. 9 . Objectives To know the investment pattern of people at Kadi as a rural area To know the current trend of investment choices among investors To know the investment objectives of people To know the perceptions of financial advisors working in other instruments regarding the mutual funds To know possible steps for attracting advisors in mutual fund business To understand the loopholes in the mutual fund business as a subject of advisors income Importance Helpful in deciding the scheme according to customer likings Helpful in finding new ways to attract advisors Spreads the real knowledge of mutual funds among advisors and investors This study may give an idea about the rural area and investment opportunities in these areas. The main work of advisory firms is to find the best mutual fund companies who give greater return at lower risk and associate a connection among these companies and advisors. It helps them understand the benefits of mutual fund. It also tries to know about the advisors dealing in financial instruments and try to know their perceptions regarding mutual fund.
it is very low. the investor’s view can’t be taken as a complete result. This research is done in a specific region on a specific target of advisors who are dealing in life insurance. Limitations This research has been limited to one area only. One is about advisors and second is about investors. the worth of research is more In past. Hence. The sample size is 20% of the population of advisors. The sample size in figures is same but as a proportion. The only need was a general perception of people in that specific reason and the attitude that they have towards such things. But in this study. this much of research was worth. there are very few or none researches about the mutual fund advisories and even if they are present. 10 . So the results will be useful to that small area only.Differentiated research This research involves two surveys. Hence. This research has good sample size for advisors but the investors sample size is low. no meaningful insights are available according to my knowledge.
Research Methodology 11 .
Public magazines & journals and internet Instrument of data collection For sample survey I used questionnaires For survey. I used social networking website FACEBOOK and Google+ For secondary data I used Printed instruments and search engine Google Sampling Sampling unit: Agents dealing in insurances and other such products having client base suitable for mutual funds. Sampling frame: geographically located in Kadi area which is a town in Mehsana district and 50 KMs away from Ahmedabad where the prudent office is located Sample design: Convenience sampling Sample size: 50 investors 50 advisors 12 . Contacted to the LIC agents of Kadi General public who earn or not earn but know the importance of savings and live in Kadi.Design: Descriptive research (a comparative analysis done for checking the pattern of research and bringing out important analysis) Data used: Primary data Secondary data Methods of data collection: Primary data collected through Sample survey Secondary data collected from Prudent CAS ltd.
I have undertaken many researches informally hence the experience of research is informally joined to me.Time schedule June-July 2012. Gurmeet singh Qualification: I am doing MBA at present and wishing to opt for finance specialization. 13 . Mr. Chirag Modh Internal guide Prof. Ayaj Mansuri Mr. External Guides from Prudent CAS ltd. I have done BBA as graduation. 45 days Researcher The whole report was prepared by Preeti Rungta under the guidance of the following people.
Industry 14 .
Hence. bonds. “A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks.This project is about mutual fund advisory and not about the mutual fund selling.nseindia. there is no need of detailed description about the mutual fund. Here is a quick review of what mutual fund is.” Source: http://www.com/content/ncfm/MFBM-workbook. short-term money market instruments and other securities.pdf Sponser SEBI Trustee AMC Fund manager Custodian Scheme Investors Structure of mutual fund working in India 15 .
TYPES OF SCHEMES AVAILABLE Structure • Open ended schemes • Close ended schemes • Interval schemes Objectives • Growth schemes • Income schemes • Balanced schemes • Money market schemes Other specific types • Sector specific funds • Tax saving funds • Special purpose funds • Index funds 16 .
These firms also hire advisors who convince and guide investors for investing in mutual fund by using their own contacts and client base. These companies depend on advisors for their work. 17 . they hire their own advisors or join a good advisory firm that can sell their mutual fund products. All the mutual fund companies are working under their regulations. There are many mutual fund companies with many mutual fund schemes. Each fund is managed separately.How mutual fund industry works? AMFI Mutual fund companies Mutual fund advisors Advisors Investors AMFI is the regulatory authority of mutual fund in India that makes all the rules regarding mutual fund. Hence.
Nowadays this commission is removed by many of the companies because the customers find it a high cost hence. 18 . 1. This amount is given by AMC to advisors. 2.5% of the investment which seems very low to advisors. Trail trail is the most important thing that an advisor gets. AMC keeps some percentage of investment received as the fees of management. Hence. Mutual fund advisors receive their income from three different sources. the efficient advisors can make handsome money if understood properly.5% is on the whole investment’s market value every year. This again depends upon the numbers and level of investment advisors find. Upfront upfront is another income that investors get on every investment. This is a return on the market value of total investment. It is a small looking income but the total value is very high.How does the advisor earn? The AMC (mutual fund companies) invest in a large portfolio after collecting money from small investors. This 0. The rest is distributed among the investors. The main problem of mutual fund advisory business arises here. This money is invested in a portfolio designed by expert keeping in mind the objective of investment. Commission this commission is given by the customers for managing their fund. This trail is around 0. It’s currently around 0.5% on each investment. 3. very few schemes include this commission.
Bank investments are giving a return of 8-9% only. Education has also been costly at the same time. You can transfer your fund from one scheme to another scheme after a specific period of time. In such condition it’s not easy to depend on earnings. These three plans are designed as per the requirement of the investors. What about other people? Most of the people in the India are falling in middle class families. Systematic withdrawal plan especially designed for elder is such that your money can be used for your regular expense as well as gain some return on it regularly so that you can use it for long Systematic transfer plan is designed for making your investment flexible.Why mutual fund is so important? The highest growing sectors in the economy are real estate and gold. There are three types of plans in this. it’s very essential to save high and invest for specific purposes especially house and education. With the increase in these two sectors. These people have savings but at a very low level. One time huge investment is not required here. See the annexure for gold SIP. the returns of investors have increased dramatically but this is only possible for those who have a large amount to invest. Mutual fund works on systematic investment base. They can’t invest in gold because they don’t have more money. 19 . They are facing problems regarding their houses and gold for various purposes. It also provides flexibility to your investment. This is helpful because you just need to invest a part of your salary every month. This allows you to plan systematically and increase the worth of your money. The answer to their problem is mutual fund. At the current inflation rate. Mutual fund invests in such growing sector and allows you to invest a small amount as an installment that can serve you high return as well as systematic investment plans for achieving some specific future goals. Systematic investment plan that allows you to invest regularly in a disciplined way.
254.30 186.418.382.90 186.33 12.111.096.20 120.26 13.52 135.21 16.82 16.60 181. the investment was very high.661.024.MF Activity for previous years for equity market Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Gross Purchase(Cr) 188.8.131.52 180.00 15.729.indiainfoline.786.841.635.69 64.800.744.634.95 78. 20 .71 -1.043.711.15 43.14 274.44 42.177.20 -27.41 Gross Sale(Cr) 125.16 -2.03 15.456.840.669.52 -5.386.941.054.62 18.96 Source: http://www.80 -5.80 181.58 27.40 186. but the market revived and performed outstanding.17 17.309.50 Net Investment(Cr) 6.70 159.70 6.50 166.559.60 14.637.65 160.488.39 28. The same pattern is expected to be seen now.241.366.271. The same time was when the markets have fallen drastically.com/MarketStatistics/MF-Activity This shows how mutual fund industry has been down in the 2009 and 2010. But when it was at peak. The same happened in year 2001 and 2002 when people were not being able to trust on markets.248.535.
30 48.452.01 19.34 9. 21 .879.539.618.166.291.13 43. People are not much risk taking and prefer debt market for many years and the culture is still followed.190.76 58.853.324.00 181.79 19.54 31.889.548.38 9.83 3.MF Activity for previous years for debt market Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Gross Purchase(Cr) 945.383.indiainfoline.752.941.38 Source: http://www.338.60 64.056.10 192.734.589.479.86 6.19 Net Investment(Cr) 292.40 245.264.63 38.410.07 11.352.20 136.51 Gross Sale(Cr) 653.60 69.314.321.25 40.00 527.22 54. These figures show how Indian economy is distributed in debt and equity market.40 47.80 545. There comes a shortfall in investments when the market is down but the overall investment is quite higher in debt funds.552.382.50 317.00 88.com/MarketStatistics/MF-Activity This shows how the investments in debt funds have raised every year.808.81 109. These are secured funds telling that people are investing more in debt funds.341.60 202.08 44.141.94 13.80 738.600.620.39 28.379.338.593.50 325.959.856.80 268.
The analysis shows that the current dollar 35000000000 industry by 2017 the figure of 75 billion dollars in 2012 and 150 billion dollars will touch. 7. the section of the top wines being recorded.1 percent for 2010 should increase. hardware components such as B2B commerce contributed to the growth of the IT industry are. it expects $ 330 billion industry by 2013. mainly because of changing lifestyles and eating habits of people.10 major sectors of India Food & Beverage Industry food and drinks in India has gained in popularity over the last 3-4 years. Health Care Industry Costs of health care in India and the West because of a huge separation of the health care industry of the country is experiencing a boom in business terms. IT Industry Business India Information Technology in 2009 to 14. 22 . IT services and software. Telecommunications Industry The growth of the telecommunications business in India as easily is called a revolution. For 11 percent of mobile subscribers in the country from 2010 to 2014 is likely to grow.5 percent growth rate between 2009 and 2013. 67000000000 analyses of industry experts provide dollar industry in 2010 to become year 2013 increased 11 percent. India is the second largest provider in the telecommunications network. The growth of 3G services and mobile telephone in the region has made significant contributions to growth. Block most of the increase in revenues from 2005 to 2009.
Natural gas. those to enjoy wooden crafts. jewelry. mortgages and insurance products in areas that the banking sector of India and insurance are to contribute to development. Source: http://www. transmission parts advertising campaign steering. For example. the number of debit cards increased 40 percent over 2006 and 2009. the construction industry is an exporter of raw materials to the other world.Automotive Indian automotive component industry since 2000 with a growth rate of about 20 per cent growth rate constant and is assumed to remain constant until 2015. India exports the largest consumer of steel. energy sector in India has contributed to growth. In addition. the cement industry is an important contribution in this category. LPG and solar energy are growing.html 23 .com/article/Top-10-Business-Sectors-in-India719. China. Engine parts. Energy Both renewable energy and non renewable energy. Banking and insurance Bank credit cards investment. hand-printed fabrics and knitted goods mainly to land areas that 3 billion in foreign currency are to be made. suspension and brake parts and electric parts. UK and Australia.made-from-india. the overall B2B commerce are the main contributors to development. For example. Construction Industry Accounting for 11 percent of India's total gross domestic product side. Crafts Indian handicrafts is a huge demand in foreign markets such as USA.
Why mutual fund advisory? A mutual fund company will focus on receiving more of the investments through investors. the way of financial planning is different. Hence the financial planning goes in a specific direction for distributing the income. An expert can properly guide them for their overall financial planning and investment options. Financial planning! A good financial planning says that return is not the sole goal of what you save out of your income. People do not know the importance of planning and badly invest at one place while overlooking the need of other. Every person has different goals in life and for achieving them they will need fund at different times. security is very important. This planning is essential for any individual for securing the life. they must consult advisors before investment. 1st 2nd 3rd • Life insurance • Health insurance • Savings in secured options • savings in uncertain but high return • keeping cash in hand 24 . But in reality. Hence.
post. no entry or exit restrictions Threats from substitutes Insurance. direct equity and so on Threat from existing players Many advisory firms emerging in Ahmedabad and other places 25 . PPF.MUTUAL FUND ADVISORY INDUSTRY FIVE FORCE ANALYSIS Mutual fund advisory business Threats from new entrants Foreign market and new funds Bargaining power of suppliers Fund is managed by those whom investors don't know Bargaining power of buyers Investors and agents can leave when they want.
Threat from new entrants Mutual fund industry is threatened by the new coming mutual fund players. they can withdraw their investment. Threat of substitutes The biggest threat to mutual fund and its advisory business is of substitutes. the investors are not trusting on the mutual funds. a confusion regarding the performance has increased. Bargaining power of customers In mutual fund industry. banks are safer than mutual funds and giving same returns while the agents are not attracted towards the earnings. Due to some of the frauds happened in the past. Foreign companies are entering into the industry. In past. 26 . So the industry has threat of losing investments at any time when investors want. Mutual fund industry is itself entering in Indian market and not so grown. there were very few companies in MF while today there are many AMCs existing with many funds. There are many mutual fund products competing and the returns have been uncertain. According to investors. bargaining power of customers is such that they can withdraw their investment anytime. they can control the investment options and if not done so. This is due to the high commission in the other businesses that are not so risky also. Yet there are companies who are not performing well and due to that the advisory business is not being able to convince them for investing. Due to this. If the investors are having high stake in mutual funds. they can choose any option that they find the best. They have many options available with them and due to this. There are many investment substitutes available in the industry for investment as well as business. Advisory firms have to continuously keep a contact with them for retaining the investments and also keep a continuous watch on the industry performance so that they can choose the best products. Threat from existing players There are many mutual fund advisories existing in the market.
They need high returns which can attract them and if they do not get the return. It is said that the regulations enable investors to assure that the investment is not drawn to any personal interest. bargaining power of suppliers is indirect. But generally this is not the scenario. The agents who work for mutual fund advisory are also uncertain. Many funds are using the money for their own stake and many a times markets are dramatically drawn by big investors. The whole work depends on their understandings and their own reviews.Bargaining power of suppliers In this industry. 27 . a bad word of mouth can spoil the image of product.
Company 28 .
Fixed Income Products. Over the past few years Prudent Corporate Advisory Services has created in-house capabilities of analyzing funds on various parameters before suggesting them to clients. the company also manages its geographically-spread business operations through a unique platform for independent financial advisors(IFA) which helps them to grow and expand their services & support through sales and marketing. Equities. common sense and caution. Prudent Corporate Advisory Services remains the primary arm of the Prudent Group. especially in the conduct of practical matters It was incorporated in year 2000 with a clear vision of providing professional services in the area of personal and corporate investments. Life/General Insurance and Real Estate through various companies listed below. Prudent Corporate Advisory Services Ltd As the flagship company. back. training & consultation.office support. The team approach worked wonders and in the short-span of just one decade. Derivatives. operations. It has created a niche segment over a period to time with an excellent quality client base.PRUDENT CORPORATE ADVISORY Prudence (prdns): the exercise of good judgment. the Prudent Group expanded its horizon by offering specialized services in the areas of Personal and Corporate Investment Planning through Mutual Funds. Debt and Third party products. It offers specialized services in the area of Personal and Corporate Investment Planning through Mutual Funds. Besides having a large pool of their own clients. technology. 29 . Third Party Products.
Company is in the process of creating its national presence by opening offices in various parts of the country. Prudent Broking Services Pvt.Prudent Broking Services Pvt Ltd Incorporated in 2004. whether it is homes or offices.aspx 30 . Ltd is a Stock Broking and Depository Participant service provider. but the effort and paperwork involved in purchasing the same can be intimidating. Source: http://www.com/aboutprudent.prudentcorporate. Prudent Properties The Property sector is an important part of the asset class. Company is a member with Bombay Stock Exchange (BSE) & National Stock exchange (NSE) & Central depository services (India) Limited (CDSL). Prudent Property provides real estate solutions not only in creating an asset class but is also helping the customers in buying their dream realty.
They continuously prepare some planning modules that can help in fulfilling the different investment objectives of investors. the customization is more. They also provide the clients with a facility to offer such special account for each of their clients so that they can understand their own investments in the past. 3. Priority accounts for advisors as well as clients This is a unique facility that Prudent is providing. Advisors need more specific and customized planning for their clients. 31 . While doing internship. They provide their own accounts especially designed for their database maintenance and easy record through internet.What Prudent does for advisors who join? 1. Advisors can charge their clients for these services while Prudent does not charge anything for the same. I have seen some of examples that show how efficiently their experts make such plans which are extremely beneficial after a bit of changes and fit many of the investors. a large variety of products in the same desk - Mutual Fund Life Insurance General Insurance Fixed Income Product Financial Planning Broking Real Estate 2. When there are more plans. Complete financial planning module and new planning ways for changing market circumstances Prudent has a team of experts who are working in this field for many years.
For helping the advisors with large business opportunities. General seminars and special seminars Prudent has started up with a specialized facility for increasing the awareness of mutual fund. Prudent chooses best products and the number of schemes is large in its offerings. 32 . Generally advisors can’t handle so many products and ignore some opportunities. They organize seminars every week for awareness of mutual fund investment as well as business. the more products can be offered under the expert advice.4. Large number of products available in mutual funds Mutual fund is such an industry where the schemes are more than the stocks in stock market. Hence. 5. they arrange for special client seminars which can be costless for advisor if it includes a reasonably good deal.
There are many reputed companies which are connected with prudent because of the excellence of work they have and the experience in this field.SWOT ANALYSIS OF PRUDENT CAS LTD. This helps them in finding the best products available in the market so that the investors are more attracted and stay for long. This is the main strength of Prudent that they provide such support and other facilities to agents and that too at no cost. 33 . Strength Excellence Weakness Retention Opportunity Unexploited market and need for expert Threat Substitute businesses and uncertain rules of MF Strength Prudent has a good expert team that can analyze the market very well. The other main strength is the big combo of services provided. There are many things included in same bracket so many financial services can be provided under one head.
The first one is most obvious direct competition from other advisory firms that exist at different places. especially insurance where the initial income is so attractive that the agents are moving in to that. There are many rural markets where people have money to invest but awareness is less. People need expert advice for investment because markets are being very uncertain. They are not being able to retain more of the advisors with them. They also have opportunity to provide guidance and literacy about MF at rural markets and gain life time loyalty and a huge investment. the advisory business is facing threat of the other financial services. Except that. So they need trustworthy advisor to get suggestions and secure their money. The advisory business has seen downfall in advisors’ income hence the agents are not attrac ted to the income and prudent is focusing on the existing advisors. At present the number of mutual fund advisories is not high but it’s increasing day by day. They are spending a lot behind advisors and it’s not easy to get work from them. This is due to the changing rules of mutual funds. Threat There are many threats to Prudent. So it can be a challenge for them to attract such advisors and train them for MF business or find new comers to train from starting. 34 . These markets are yet to be explored and a great opportunity is hidden for them in such markets. Opportunity They have an opportunity to secure a large market because people need to invest in secured funds.Weakness Prudent needs a lot of market work. Their work and facilities are excellent but many of the new advisors are joining them and leaving after getting experiences. that is very tough. It’s not easy to collect many advisors who can join this business.
Location 35 .
In Kadi town. the place is developing and attracting other villages to join.Kadi as a location Kadi is a small town that has a population of around 1 lakh people. This is the main topic of this research and proven in this research. Big cities like Ahmedabad. Kadi is a semi developed region where education has been a priority for many years. In Kadi. there are numerous jobs available and easy travelling is possible. These companies are also not being able to cover much market because of the limitation of having little choice in products. These people are not much involved in any of the risky financial products while the public has money to invest. Reliance and Kotak are working at this place for few years but the overall coverage is very low. there are 300 LIC agents who are working at their best client base. and Patan etc are very close to the town. In these cities. This is a place which is at the centre of many villages that are not much developed. excluding the other villages included in that. These villages find most of their facilities from Kadi. In such a situation. 36 . This place can be targeted for attracting the investors by making them aware about proper financial planning. People in Kadi are earning their incomes from good sources as their education quality is good and they are surrounded with a good industrial area. Due to this. Mehsana. Each of them is having a high client base in Kadi and nearby villages. mutual fund business has been established previously. it is worthwhile to know about their perceptions of investment and target the place for investment.
Literature review 37 .
It needs advisors who can sell these schemes to clients as they have good client base. post office. So. They generally consider it so risky as equity The advisors are given trails on the investment which they consider as low due to its small percentage size which is 0. It’s important to find advisors if the mutual fund industry needs to grow and for this reason. etc. There is a lack of awareness among advisors regarding mutual funds. There is a huge share market in India but people do not understand the importance of mutual funds and find it riskier which is not. mutual fund companies need to think about advisors also. Hence. They invest on their intuitions and incomplete knowledge. “Investment market for mutual fund schemes SIP / STP are threatened by bank deposits. People do not invest on the complete investigation. the success lies in creating awareness among investor and brokers. Very small numbers of investor are aware about the mutual fund and its concept. Mutual fund industry has not grown much in India yet.5% but in long run the total amount grows larger. Main reason behind that is people are more concern about the security of money and life after retirement and also fixed rate of return.” Source: research report 1* 38 . For this. their perceptions are needed to learn and rectification is needed by giving them true knowledge of the same. The misconception that prevails among the most of investor and investment advisor is that mutual fund’s schemes SIP / STP are only for middle c lass & it is invested in stock markets. their perceptions are important to know. This is the fact of mutual fund industry which may or may not be known to these advisors.
On a comparative basis we found certain similarities like need for safety and wealth generation top the list of criterion they consider while investing. it is observed that people are having proper understanding of portfolio market & its scenario concern. It has been ranked 2nd as far as it is concerned with investment criteria. Here. Banks/FIs which remain the top three preferences for investing and then the rest. (2) As & when they have surplus in order to go for the option of wealth generation. And they also want healthy returns. generally people are ready to accept it. When it comes at liquidity as 1st criteria people are not clear about its meaning & as they are keeping some amount on hand instead of saving therefore it becomes indifferent for people as investment criteria. Post Office Deposits. PPF & RBI tax-free bonds are preferred the most. As we have seen in the analysis. PPF. When it comes at safety being 1st criteria. In the case of timings most individuals prefer only two options: (1) As per yearly schedule in order to have proper returns & regular flow of income can be generated very easily. When it comes at tax efficiency Insurance. When people are asked about a scheme that is available at lesser return rate but with liquid funds & tax-free return. individuals are very well aware about the investment avenues available under this criterion.e. As far as knowledge about different statements of portfolio is concerned. So attitude is likely to invest in PPF. So mutual fund is the safest way for getting healthy returns.“People generally tend to save 20% to 40% of their income while investment Kit of that tends to remain 40% to 60%. investors are always searching for the safe investment. Post Office Deposits. RBI Bonds. 39 . In the case of opinions people take more opinion from spouse/ parents & financial advisor thinking that professionals always help in such decisions. & INSURANCE. They all prefer to invest their savings at least in 2 avenues or more and the most preferred avenues are government securities basically for tax saving purpose i. it is also found that comparative investment in mutual fund is quite less.
Mutual Fund as a concept is well known. What is needed is the spread of awareness beyond regional limits. They are perfectly aware of portfolio market may be the help by professionals. Most of them have started planning for Retirement.” Source: research report 2* “Currently industry is gradually growing phase and Indian Mutual Fund industry has been definitely maturing over the last few years and the level of awareness today is much more than what it was in the past. So.There was an open-ended question that was asked to know the effect of inflation & government policy. but the target audience still needs to gain more awareness. Children education and meeting with future contingencies. And it was very perfectly asked by individuals. But the level of awareness has not yet reached the rural and other smaller towns and it is more of a smaller towns and it is more of an urban phenomenon.” Source: research report 3* 40 . overall we can conclude that people are less aware about the working & different schemes offered by mutual fund schemes. People always consider Safety as 1st criteria & now-days they are also taking an advantage of tax-free schemes.
Analysis 41 .
General data regarding advisor survey
The client base of agents who are working as the agents at LIC
Client base Less than 100 100-300 300-500 500-1000 more than 1000 Total
Frequency 0 5 10 21 14 50
more than 1000 28%
As discussed earlier, agents in Kadi have a large client base. They all have an average client base of 1000. This shows that people are investing money in the life insurances.
Age 26-30 31-35 35-40 41-45 46-50 Total
Age group of sample Frequency 5 18 12 9 6 50
41-45 18% 31-35 36% 35-40 24%
The age group of most of the agents is 31-40. This age group is generally considered as the most enthusiastic age. This is an age where a person is experienced and enthusiastic to learn.
Agents who know about royalty income in mutual fund
Do you know it gives royalty income Frequency no yes Total 30 20 50
This shows that agents who know about mutual fund also know about mutual fund royalty income. There are 40% people who know about this. Our perception initially said that they are not aware of this royalty income.
They are having a trendy negative impact on this thought. 45 .Agents who would like to enter in mutual fund business Enter in MF business Frequency no yes Total 39 11 50 Enter in MF business yes 22% no 78% This shows that agents are not ready to enter in mutual fund business. Only 22% are ready that too with no serious thought of joining it without knowing about it.
Only 22% people wishes to join in MF and they are not from any specific category. H1: There is a significant relation between approximate client base and interest in joining with MF.574 50 D/f 3 2 tailed . 46 .311 Result There is no significant relation between approximate client base and interest in entering to MF.H0: There is no significant relation between approximate client base and interest in joining with MF. Enter in MF business No Approximate client base 100-300 300-500 500-1000 more 1000 Total than 3 7 19 10 39 Yes 2 3 2 4 11 Total 5 10 21 14 50 Chi-square tests Value Value Pearson chi-square N of valid cases 3.
But in this sample. complaint that their record maintenance is tough. most of the people are not giving importance to record maintenance.H0: there is no relation between client base and advisor’s wish for record and maintenance. Generally we find that people having more clients. It shows that they don’t know the importance of record maintenance. 47 . Advisor record and maintenance If not If selected 0 3 0 2 5 Total 5 10 21 14 50 selected Approximate client base 100-300 300-500 500-1000 More 1000 Total than 5 7 21 12 45 Chi-Square Tests Value Value Pearson Square N of Valid Cases Chi7. H1: there is a significant relation between client base and advisors wishing for record and maintenance support.619 50 D/f 3 (2-sided) .055 Result H0 is accepted hence there is no such relationship.
048 Result. There is a significant relation between client base and interest in knowing about mf. H1: there is significant relation. It's good to know about mf as it's an emerging business in India Approximate client base Highly agreed 100-300 300-500 500-1000 More 1000 Total than 1 8 7 6 22 Moderatel y agreed 1 1 10 3 15 Neutral 1 1 1 5 8 Moderatel y disagreed 1 0 1 0 2 Highly disagree d 1 0 2 0 3 Total 5 10 21 14 50 Chi-square tests Value Value Pearson chi-square N of valid cases 21. 48 . People with more client base are interested in knowing more about MF.19 50 D/f 12 (2-sided) .H0: there is no relation between client base and interest in knowing about mf.
H0: there is no relation between knowing about royalty income and joining mutual fund. Most of the people do not know about royalty income. 90% of them are not joining MF Those who know about royalty income. Those who don’t know about royalty income. 40% of them are wishing to join MF. There is a significant relation between knowing about royalty income and joining mutual fund. 49 . H1: there is a significant relation between knowing about royalty income and entering into MF business.012 Result The null hypothesis is rejected. Enter in MF business No Do gives income Total you know it No Yes 27 12 39 Yes 3 8 11 Total 30 20 50 royalty Value Value Pearson Square N of Valid Cases Chi6.294 50 D/f 1 (2-sided) .
H0: there is no relation between age and client base. Approximate client base 500100-300 Age 26-30 3 2 0 0 0 5 300-500 2 8 0 0 0 10 1000 0 8 9 2 2 21 More 1000 0 0 3 7 4 14 than Total 5 18 12 9 6 50 31-35 35-40 41-45 46-50 Total Chi-Square Tests Value Value Pearson Square N of Valid Cases Chi50. H1: there is a significant relation between age and client base. People with more age have more client base. 50 . There is a significant relation between client base and age.000 Result Null hypothesis is rejected.82 9 50 D/f 12 (2-sided) .
there is a significant relation between age and knowledge of MF.H0: there is no relation between age and knowing about MF H1: there is significant relation between age and client base. 51 . Hence. Do you know about mf No Age 26-30 31-35 35-40 41-45 46-50 Total 3 4 5 4 6 22 Yes 2 14 7 5 0 28 Total 5 18 12 9 6 50 Chi-Square Tests Value Value Pearson Square N of Valid Cases Chi11.64 8 50 D/f 4 (2-sided) . Age group of 31-35 knows more about MF while agents above 45 do not at all know about it.020 Result Null hypothesis is rejected.
52 .This data is about how many advisors are aware about the business of mutual fund and if not aware then what is the reason for the same. Do you know about mf business No Yes Total Frequency 22 28 50 Why you don’t know about mf business? Frequency Dun know about mf Can’t understand clients return Can’t handle the workload Income seems low to me Can’t understand product difference Total System 3 1 8 9 1 22 28 50 From the above data it is clear that 56% people know about mf. It can’t be said that they know completely but they feel that they are aware about mf business. Out of those who don’t know about mf business say that either their workload is high or they can’t spend time for this low income option.
Advisors’ viewpoints regarding beneficial variables for their clients are likewise. 53 . They also focus on tax saving as a purpose of investment. Selected High return Low risk Diversified product category Tax savings Low charges on investment 46 30 9 20 4 Investor's benefit 50 45 40 35 30 25 20 30 46 15 10 5 0 High return Low risk Diversified product category 9 20 4 Tax savings Low charges on investment It can be said that people are more likely to see the return and risk factor while investing or advising for investment.
54 .Advisors’ viewpoints regarding their own benefit in the following variables are likewise. Extra incentives are preferred by some people but commission is the main benefit. Other factors are not so important. Selected Commission Extra incentives Easy record and maintenance Complete knowledge of instruments Continuous guidance Free of charge entry and exit 50 14 5 6 5 6 Advisors' benefits 60 50 50 40 30 20 10 0 Commission 14 5 6 5 6 Extra Easy record Complete Continuous Free of incentives and knowledge guidance charge entry maintenance of and exit instruments This chart and data shows that advisors are mainly focusing on commission while looking for any business.
Many people are interested in knowing but they don’t seem to be joining or thinking about joining later.Decision of advisors about Prudent interested in knowing more Interested in joining now interested in joining but later not t all interested Total Frequency 21 0 1 28 50 Decision of advisor interested in knowing more 42% Not at all interested 56% interested in joining but later 2% There is no one who would like to join the business at present. 55 . In fact only 2% people are wishing to join afterwards.
MF is an emerging business and it’s good to know about it. But a few people do not agree with this statement. Advisor’s income is more in long run in MF business Expert advice plays an important role At costless support there is no harm in joining MF business. Only 8% people were agree that it’s highly safe than stock market.Analysis regarding following statements 1 Mutual fund is less risky than stock market. 2 40% 3 28% 56 . 22 15 8 2 3 3 3 10 10 24 24 18 6 2 0 1 2 15 15 17 4 2 20 3 14 4 9 5 3 MF is less risky than stock market 5 6% 4 18% 1 8% Most of the agents are saying that mutual fund is less risky than the stock market.
2 36% 1 48% 57 .Advisor income is more in MF in long run 1 2% 5 34% 2 4% 3 30% Most of the advisors are not agreed with the statement that the income in MF business is more in long run. 4 30% Expert advice plays an important role 4 4% 3 12% Most of advisors are in the favor of expert advice and all of them feel that the importance of expert advice is inevitable for any investment. They are not agreed with the income opportunities in long run also.
4 20% It's good to know about MF business 4 4% 3 16% 5 6% 1 44% In the above graph it was shown that agents are not interested in joining the business but this graph shows that they would like to know about the business. There can be a hidden line between these two statements that they don’t want to join because they don’t know about this business.At costless support there is no harm in joining MF business 1 6% 5 48% 2 6% 3 20% This analysis is clarifying the fact that such a free support is also not attracting the advisors and they are not ready to join the business for such facilities. 2 30% 58 .
Analysis regarding to facilities of Prudent and agents’ view on that 1 Online back office support for managing your and your clients’ data Basic business opportunity knowledge Complete knowledge of MF Exam preparation Knowledge of best products available Continuous support and suggestions Every week awareness seminar Special seminar for your clients at our cost Health insurance added to the same bracket 3 22 21 13 6 2 3 21 8 14 26 25 10 8 10 26 10 5 3 10 13 19 18 3 12 6 0 0 12 14 9 0 17 3 0 2 9 7 10 0 5 2 10 3 5 4 9 5 21 Online backffice support 1 10% 5 42% 2 20% Very few people are interested in such kind of support though it can be very useful and provided at no cost. They don’t find is so essential and feel that it can be done easily by anyone who is joining . 3 10% 4 18% Basic business opportunity knowledge is not given much importance by the 59advisors.
3 10% 2 28% 60 .BOK 1 6% 5 34% 2 16% 3 20% 4 24% Complete knowledge of MF 4 12% 5 6% 1 44% Prudent provides complete knowledge of mutual fund before starting with the business. Most of the people have agreed that this is very important as they do not know about mutual fund.
preparation important by advisors. the advisors are looking at this point as important. 2 50% 61 . is chosen product exam as business.Exam preparation 3 6% 1 42% Exam preparation is a task that every advisor has to pass through before entering in any of the financial Hence. 2 52% Knowledge of best products available 3 20% 5 4% 1 26% There are many schemes available in the mutual fund and the advisors always need to know about the best products that they can offer to their clients. Hence.
4 24% 3 26% Every week seminar 5 7% 1 4% 2 17% The every week seminar is not much understood by agents as it is new to them and of no use until they understand the 4 31% complete business. However. Hence. There is no such highly positive or highly negative response. 3 41% 62 . the more part is on negative side. This point is equally distributed and hence any specific like or dislike is not seen. they haven’t given much importance.Continuous support and suggestions 5 18% 1 12% 2 20% Continuous support is a good facility that every advisory has to compulsorily provide.
There are equally distributed frequencies in this and most of the people stayed neutral. the health insurance option is more liked by the agents. 3 42% Health insurance 3 6% 1 42% As the sample is taken from LIC agents. They are most likely to select the health insurance part as this is quite familiar product to them.Special seminars 5 7% 4 21% 1 7% 2 23% The special seminar is also having same kind of response as in every week seminar. 2 52% 63 .
General data regarding the investor’s survey Age 18-23 23-28 28-35 35-50 50-65 Total Frequency 14 7 11 16 2 50 Gender Frequency Male Female Total 29 21 50 Age 50-65 4% female 42% 35-50 32% Gender 18-23 28% 23-28 14% 28-35 22% male 58% 64 .
Occupation Student Profession Business Housewife Government employee Private employee Total Frequency 11 8 9 8 6 8 50 Salary None Less than 10000 pm 10001-20000 pm 20000-30000 pm 30000-45000 pm Above 45000 pm Total Frequency 22 2 12 10 3 1 50 Occupation private employee 16% Student 22% government employee 12% Profession 16% housewife 16% business 18% above 45000 pm 2% salary 30000-45000 pm 6% 20000-30000 pm 20% none 44% 10001-20000 pm 24% less than 10000 pm 4% 65 .
H1: there is a significant relation between age and saving perceptions. 66 . Elder people are saving more than the younger.H0: there is no relation between age and saving perceptions.904 50 D/f 12 (2-sided) .004 Result Null hypothesis is rejected. There is a significant relation between age and saving perceptions. How much should be saved 15%0-15% Age 1823 2328 2835 3550 5065 Total 0 30% 6 30%50% 8 50%75% 0 Total 14 2 4 1 0 7 0 1 8 2 11 0 1 11 4 16 0 2 1 13 1 29 0 6 2 50 Chi-square tests Value Value Pearson chi-square N of valid cases 28.
There is no relation between age and knowledge regarding mf.H0: there is no relation between age and knowing about mf H1: there is a significant relation between age and knowing about mf Do u know about mf No Age 18-23 23-28 28-35 35-50 50-65 Total 7 1 5 11 1 25 Yes 7 6 6 5 1 25 Total 14 7 11 16 2 50 Chi-square tests Value Value Pearson chi-square N of valid cases 5. But the age factor will not decide the knowledge regarding mf.912 50 D/f 4 (2-sided) . there are an equal proportion of people who know about mf and who don’t. I believe that the population result would surely be different.206 Results Null hypothesis is accepted. 67 . With my surprise.
Elder people mostly like stable return at low risk while the younger people like high return and ready to bear risk.H0: there is no relation between age and type of investment they like H1: there is a significant relation between age and their investment perception. Which kind of investment u prefer High risk high return at lower Stable low risk Age 18-23 23-28 28-35 35-50 50-65 Total 3 1 3 12 1 20 return High risk high return 3 1 4 2 0 10 risk investment 8 5 4 2 1 20 on Total 14 7 11 16 2 50 Chi-Square Tests Value Value Pearson Chi-Square 16.041 D/f (2-sided) Result Null hypothesis is rejected.080 N of Valid Cases 50 8 . There is a significant relation between age and investment type. 68 .
Younger are ready to invest in mutual fund while elders are not ready to invest. 69 .183 50 D/f 4 (2-sided) . Would you like to invest No Age 18-23 23-28 28-35 35-50 50-65 Total 4 4 9 13 1 31 Yes 10 3 2 3 1 19 Total 14 7 11 16 2 50 Chi-square tests Value Value Pearson chi-square N of valid cases 11.H0: there is no relation between age and preference of investing in mf. There is a relation between age and preference of investing in mf. H1: there is a significant relation between age and preference of investing in mf.025 Result The null hypothesis is rejected.
May be this is because we are talking about family savings. 70 . There is no relation between gender and saving perceptions.H0: there is no relation between gender and saving perceptions. Women are also having same perceptions regarding savings as men are having.316 50 D/f 3 (2-sided) .509 Result The null hypothesis is accepted. H1: there is a significant relation between gender and saving perceptions How much should be saved 15%0-15% Gend er Male Fem ale Total 1 1 2 30% 7 6 13 30%50% 19 10 29 50%75% 2 4 6 Total 29 21 50 Chi-square tests Value Value Pearson chi-square N of valid cases 2.
045 Result The null hypothesis is rejected.H0: there is no relation between gender and knowledge regarding mf H1: there is a significant relation between gender and knowledge regarding mf Do u know about mf No Gender Male Female Total 11 14 25 Yes 18 7 25 Total 29 21 50 Value Value Pearson chi-square N of valid cases 4.023 50 D/f 1 (2-sided) . There is a significant relation between gender and knowledge regarding mf. 71 . Females are not much aware about mf.
016 Result The null hypothesis is rejected. government employees and unexpectedly businessmen are not aware about mf.869 50 D/f 5 (2-sided) . Students are equally proportioned in knowing or not knowing about mf. Private employees and those who are in profession know about mf (most of them are professors and teachers) while the housewives. 72 . There is a significant relation between occupation and knowledge regarding mf.H0: there is no relation between occupation and knowledge regarding mf H1: there is a significant relation between occupation and knowledge regarding mf Do u know about mf No Occupation Student Profession Business Housewife Government employee Private employee Total 5 2 5 7 5 1 25 Yes 6 6 4 1 1 7 25 Total 11 8 9 8 6 8 50 Chi-square tests Value Value Pearson chi-square N of valid cases 13.
989a 50 D/f 10 sided) . 73 . professionals and private employees are more likely to invest in high return high risk with low risk on investment while housewives and government employees prefer stable return at low risk. Which kind of investment u prefer High Stable return low risk Occupati on Student Profession Business Housewife Government employee Private employee Total 2 2 2 6 6 High risk risk high return at lower risk on investment 7 4 3 1 0 Total 11 8 9 8 6 high return 2 2 4 1 0 2 20 1 10 5 20 8 50 Chi-square tests Value Value Pearson chi-square N of valid cases 21.H0: there is no relation between occupation and type of investment preferred. Businessmen are most likely to invest in high risk high return investment options. There is a significant relation between occupation and type of investment preferred.015 (2- Result The null hypothesis is rejected. Students. H1: there is a significant relation between occupation and type of investment preferred.
Equity See top five. Equity Money market Fixed deposits Savings account 0 41 15 9 34 34 10 20 30 40 50 74 . Equity 10 2 8 15 14 24 41 10 28 Investment option Short term Savings account Fixed deposits Money market S. Investment pattern of people Frequency Physical Gold Real estate 34 Commodity Long term 34 9 15 Post office PPF Company FD Bonds Mutual Fund L. Equity 24 14 15 8 2 10 28 10 Mutual Fund Bonds Company FD PPF Post office Commodity Real estate Gold S.dark colored Investment L.
Market perception of people Current market perception in investor’s mind Commodity Banking For-ex Real estate Pharmacy IT Financial services 5 23 14 46 13 18 3 Oil and gas FMCG Food processing Steel Heavy electronics Power 11 9 13 23 19 31 See top 4 darkened Current market Power Heavy electronics Steel Food processing FMCG Oil and gas Financial services IT Pharmacy Real estate For-ex Banking Commodity 0 5 10 20 30 40 50 14 23 13 46 3 18 9 11 13 19 31 23 75 .
76 . The second objective is regular income.Ranking of investment objectives 1 Regular income Capital appreciation Tax saving For specific reason 12 22 8 8 2 11 19 13 7 3 17 8 11 14 4 10 1 18 21 100% 90% 80% 70% 60% 50% 40% 11 30% 20% 10% 12 17 10 1 8 18 21 19 11 14 13 22 8 Capital appreciation 1 2 3 Tax saving 4 7 8 For specific reason 0% Regular income People are mostly doing investment for capital appreciation. That means people are not concerned with the fact that they will need money for some specific task in future and there should be a systematic investment for that. Third objective is tax saving and forth is for specific reason.
05 H0 accepted H0 rejected H1 accepted Age and preference of investing in MF 0.311 > 0.004<0.016<0.041<0.05 H0 accepted H0 rejected H1 accepted H0 rejected H1 accepted Age and knowledge about MF business 0.025<0.05 H0 accepted H1 There is a significant relation between Comparison Result Client base and importance of record and 0.015<0.05 maintenance Client base and interest in knowing about MF 0.05 business Age and client base 0 < 0.05 0.509>0.05 0.045<0.012< 0.206>0.048 < 0.05 H0 rejected H1 accepted Occupation and type of investment preferred 0.02< 0.05 H0 rejected H1 accepted Gender and saving perception Gender and knowledge regarding MF 0.055 > 0.05 H0 accepted H0 rejected H1 accepted Occupation and knowledge regarding MF 0.05 joining MF business Investors Age and saving perception 0.05 H0 rejected H1 accepted H0 rejected H1 accepted Age and knowing about MF Age and investment perception 0.05 H0 rejected H1 accepted 77 .05 H0 rejected H1 accepted Knowing about royalty income and interest in 0.Hypothesis H0 There is no significant relation between Advisors Client base and interest in joining MF business 0.
Commission is the main income as upfront and trail. Mutual fund is completely risky as it depends on the market. other incentives are not so attractive and they can’t be taken as real income. They will wait for the commission to grow up and then think of entering in market The money of investors has been lost. Their clients ’ and their own investment has seen losses in mutual funds. These products are better than mutual fund 78 .Reviews of advisors in open ended questions They would like to know about MF but they don’t want to join MF business for various reasons. Only long term income is possible.5% upfront is not a good amount of commission. Mutual fund is risky for advisors and investors. 0. In short run. It needs lots of market knowledge and ability to understand the product. People do not understand MF and they can’t take such products which they can’t offer successfully. there is nothing to earn.50% trail and 0. Youngsters with financial knowledge should join it. MF industry is declining so there is no need to enter it There are many other options available to deal along with the life insurance. It’s better to focus on life insurance. They are having lots of work and not having time to learn about mutual fund. They are not able to understand these many products They don’t want any online support as they can’t work on internet and they don’t have time to spend after it.
79 .Advisors dealing with insurance and MF People are not aware about MF Very few people know about MF and they invest in those products which their advisors offer There is a huge money to attract but the investors don’t have any knowledge regarding the returns hence they invest in insurance as a safe measure They have passed through bad experiences in the past. Many advisors without any expertise have shown them huge losses which they can’t forget hence they like to stay away from market investment whether it’s in stock market or mutual funds.
The risk level is same in both.” “It’s good to invest for long term.” “Stock market and mutual funds are risky and it’s not wise to invest in that.” “Stock market gives higher returns than the mutual funds. There is nothing like low risk in mutual fund.” 80 . Short term investment in the market is very risky and without any analytical skills. it’s not advisable to invest for short term. but for long term as usual specific stock approach can lead you to capital gain or a good return.Comments of investors “Stocks manage by only knowledge of market and for knowledge of market you have full concentrate on market up dates but this not possible for a working person. businessman or student.” “Stock market volatility is the major issue for the short term investment nowadays. It’s better to invest in any physical product such as real estate or gold. I always keep a long term perspective.
Conclusion 81 .
- Many research papers say that MF needs to increase awareness for increasing investment but my research shows that people are aware of mutual fund but the unattractive pattern of income and some bitter experiences are forcing them to go against it. Hence.- These advisors are not interested in joining mutual fund business because of the commission they receive. - Advisors have been investors and experienced outflow of money so they do not want their clients to suffer through it. Everyone believes that MF gives rewards in long run and that too is uncertain. Advisors are not ready for MF as it includes many products and dependent on market conditions. The past investment experiences were bad They are unaware of what advisory businesses do They are not attracting towards the o. Hence. We can’t go for this business just for learning. - The starters are ready for it but there has to be an awareness and proper earnings that can attract youth towards it. they find it uncomfortable and risky Many people feel that MF is a pool of learning stock market but there is no earning. they don’t want to enter. They find some reasons for not joining MF.50% income pattern. We have to earn. 82 . - The second mostly preferred reason is their workload and age. They are not in a condition to learn so many products for a lesser amount of income. They are already in to a business where they feel they are getting high income.
- If there is saving then there is surely a scope of putting mutual fund. 83 . Their incomes and savings are good and they are just earning low in savings account and other such things because they are not aware of mutual funds. They are ready to invest in stock market and MF. Perhaps insurance agents are not the targets. - People have lost money in bad funds. investors are saving a large amount. Many are ready for risk taking.- On the other hand. They need proper guidance and that can be given by advisory businesses.
Findings and suggestion 84 .
Investors are investing their money in equity market hence the scope of mutual fund is high. LIC agents are attracted towards the huge initial income. It has a large population and their income level and literacy level is also high. Due to general trend. the responses are dependent on each other and true perceptions of advisors are not arrived. 85 .Findings Kadi is a place where income level is higher than other nearby villages. people are not ready to invest in MF. This place is a good target for the mutual fund business if done properly Awareness regarding mutual fund advisory is less among investors and due to past experience.
Kadi is a place which is covering many villages around it and these places are full of investors who depend on their advisors. prepare the new comers for this work. they can get huge investments. It’s not so easy to attract people who are already into a business earning good amount. Hence. It can be a great opportunity to focus on them and make them ready for long run. When investors will understand they will demand mutual fund and advisory support. Most of the advisors don’t know about royalty income. This way can be helpful in attracting advisors. focus on clients rather than on advisors Those who are starting with career are more interested in entering the MF business. The perceptions of advisors can be changed only when their clients will tell them. it’s good to arrange programs at different cities regarding mutual fund business and do the same in business related colleges. Hence. If advisory firms can prepare agents for consulting with these people. 86 . This will attract the youngsters to enter. all agents including insurance will get attracted. let them understand market under your guidance and cover new markets.Suggestions The MF advisory should turn to Kadi and spread awareness among investors. When there will rise the competition.
Bibliography 87 .
Reports 1. Ladani V., Patel Z. (2010). A project report on Investor perception about different investment products. R. B. Institute of management studies. 2. Upadhyay S (2011). Study about the investment attitude of individuals. NSVKNS, MBA College. 3. Patel S., Sharma A. (2010). Survey on investor perception with respect to different investment avenues. R. B. Institute of management studies. Websites 1. http://www.prudentcorporate.com/aboutprudent.aspx 2. http://www.itrust.in/fixed-deposit.action 3. http://www.indiainfoline.com/MarketStatistics/MF-Activity 4. http://www.made-from-india.com/article/Top-10-Business-Sectors-in-India719.html
Questionnaire -1 for advisor survey 1. In which of the following things you deal apart from life insurance? Also state the company name. Instruments Health insurance General insurance Mutual fund PPF Post recurring Fixed deposits Direct Equity Yes/no
2. What is the approximate client base at present? Less than 100 100-300 300-500 500-1000 More than 1000
3. Do you know mutual fund business? Yes No
If no then why not?
Don’t know about mutual fund Can’t understanding my earnings Can’t understand client’s return(performance of MF) Can’t handle the work load Income seems low to me
Expert advice plays important role. upfront.Can’t understand the product difference Any other…. If you are said to be receiving all the above mentioned facilities at no cost. there is no harm in joining this business. Out of the following. When support is costless. Do you know the mutual fund is the only business which gives royalty income along with trail. which of these attracts you for the benefit of your client more? High returns Low risk Diversified product category Tax savings Low charges on investment If any other…… 5. 6. transaction and application fees and gift packages? Yes No 8. would you like to enter in the mutual fund business? Yes No 7. How much do you agree with the following statements? 1 Mutual fund is less risky than stock market. Advisors income is more in MF in long run. 2 3 4 5 91 . 4. Which of the following do you consider are of importance to you as an advisor? Commission Extra incentives Easy records and maintenance Complete knowledge of instrument Continuous guidance Free of charge entry and exit If any other…...
Leave any comment or views regarding the mutual fund business.It’s good to know about MF as it’s an emerging business in India. Personal information Name Age Gender Contact number Area 92 . which of these are very important to you? give rank 1 Online back office support for managing your and your clients’ data Basic business opportunity knowledge Complete knowledge of MF Exam preparation Knowledge of best products available Continuous support and suggestions Every week awareness seminar Special seminar for your clients at our cost Health insurance added to the same bracket 2 3 4 5 10. Prudent is giving the following facilities without any cost. What is your decision after knowing about the facilities provided by Prudent and income in MF? Interested in knowing more Interested in joining now Interested in joining but after some time Not interested 12. 9. 11.
Questionnaire 2 for investors 1. Short term Savings account Fixed deposit Money market Equity Physical Gold Real estate Commodity Long term Post office PPF Company FD Bonds Mutual Fund Equity 5. Do you know about mutual fund? Yes No 4. At present. Which of the following do you like for investments? Mention if other. which are the top 5 sectors performing well in market according to you? 93 . Do you earn salary/profit? Yes No 2. How much you think a person should save out of his/her family earnings? In percentage 3. Which kind of investments you prefer more Stable return low risk High risk high return High risk high return at low risk on investment 6.
Regular income Capital appreciation Tax savings Specific purpose investment 9. minimum.High risk high/low return . What should be the allocation of savings? Life insurance Health insurance Savings .Sectors 1 2 3 4 5 Description if any 7. If you invest in stock market. how many different stocks will bring the risk near to 0? (At least how many stocks should be added in the portfolio to avoid risk?) 10. This is the investment option where you can systematically save and invest at comparative lower risk and the number of products available is large. Rank the following according to your investment objective. So if you wish to decide your own level of risk. Mutual fund is a good option for diversifying your small investment in different sectors and lessening the risk.Low risk fixed return Liquid ( cash) 100% 8. Would you like to invest? Yes 94 . you get a suitable product for it.
What would you like to say about the stock market and your investment pattern at present? Personal info Name Age Gender Occupation Salary. if any 95 .No 11.
60000 120000 300000 600000 120000 240000 600000 1200000 180000 360000 900000 1800000 240000 480000 1200000 2400000 in Rs.67 99. 75424 150848 377121 754241 193514 387029 967571 1935143 378406 756812 1892029 3784058 667887 1335774 3339434 6678869 Collected gold in Grams 24.33 248. 1000 For 5 years 2000 5000 10000 1000 For 10 years 2000 5000 10000 1000 For 15 years 2000 5000 10000 1000 For 20 years 2000 5000 10000 Total investment Total return in Rs.33 496.27 48.34 242.67 39.66 55.83 397.77 79.GOLD SIP Years Monthly investment in Rs.89 96 .99 111.98 279.53 198.95 559.53 121.67 49.