NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES (NMIMS)

GLOBAL ACCESS SCHOOL FOR CONTINUING EDUCATION

(NGA-SCE)

INTERNAL ASSIGNMENT

COURSE: MARKETING OF FINANCIAL SERVICES

APPLICABLE FOR SEPTEMBER 2022 EXAMINATION
NMIMS GLOBAL ACCESS SCHOOL FOR CONTINUING EDUCATION (NGA-
SCE)
COURSE: MARKETING OF FINANCIAL SERVICES
INTERNAL ASSIGNMENT APPLICABLE FOR SEPTEMBER 2022
EXAMINATION

QUES 1.) Design a Financial Literacy program for an Asset Management Company
(Mutual Fund) of your choice.
(10 Marks)
ANSW 1.) FINANCIAL LITERACY PROGRAM
National Stock Exchange of India (NSE)
National Stock Exchange of India Limited (NSE) is the leading stock exchange of India,
located in Mumbai, Maharashtra. It is the world’s largest derivatives exchange in 2021 by
number of contracts traded based on the statistics maintained by Futures Industry
Association (FIA), a derivatives trade body. NSE is ranked 4th in the world in cash
equities by number of trades as per the statistics maintained by the World Federation of
Exchanges (WFE) for the calendar year 2021. It is under the ownership of some leading
financial institutions, banks, and insurance companies. NSE was established in 1992 as
the first dematerialized electronic exchange in the country. NSE was the first exchange in
the country to provide a modern, fully automated screen-based electronic trading system
that offered easy trading facilities to investors spread across the length and breadth of the
country. Ashish Kumar Chauhan is the Managing Director and Chief Executive Officer
of NSE. The Indian stock exchange BSE and NSE has been engulfed in series of
corruption scandals such as 1992 Indian stock market scam and others.
Financial Literacy Program is a basic course in personal financial management. The aim
of the course is to educate learners on simple concepts of personal finance. The course
covers in simple language topics such as income, taxation, expenditure, savings &
investment avenues, borrowing, managing risk, budgeting etc.
NSE Academy has joined hands with Maharashtra Knowledge Corporation Ltd. (MKCL)
to launch a basic course in personal financial management. The aim of the course is to
educate learners on simple concepts of personal finance. The course covers in simple
language topics such as income, taxation, expenditure, savings & investment avenues,
borrowings, managing risk, budgeting etc.
Participants would also learn about various financial institutions and in what ways they
can benefit from these institutions. The course helps participants to become aware of
different products through which they can meet their financial needs and learn about the
benefits of prudent financial behaviour.
The course is presently available at select MKCL’s Authorised Learning Centres. The
course comprises of 14 modules of approx. 60 minutes each. At the end of the course
there would be an online examination and successful candidates will be provided with an
 NAL-MKCL certification. We conduct financial education workshops through NSE
Academy to develop a new generation investors. To introduce more first-time investors
to the Indian markets and attract them to our exchange, our outreach, advertising and
expansion initiatives seek to transform India’s strong culture of saving into an “equity
culture”. We plan to intensify our outreach and advertising programs directed at younger
Indians through our wholly-owned Subsidiary, NSE Academy, which promotes financial
literacy as a necessary life skill. NSE Academy’s initiatives, including partnerships with
state and national school boards and schools, interactive courses on personal finance and
certification programs, teach school children, homemakers and other non-finance
professionals the value of investing, provide an introduction to the Indian capital markets
and help to develop new market professionals.
NSE ACADEMY’S Certification in Financial Markets (NCFM)
A critical element of the financial sector reforms is the development of a pool of human
resources having right skills and expertise in each segment of the industry to provide
quality
intermediation to market participants. In 2016, we consolidated our education business
under NSE Academy, our wholly-owned Subsidiary. Our educational programs business
is
administered by our wholly-owned Subsidiary, NSE Academy Limited, or NSE Academy,
and offers programs in various aspects of banking, financial services, financial markets
and
financial literacy. Our NSE Academy Certification in Financial Markets, or NCFM,
program
is an online testing and certification program that tests the practical knowledge and skills
required to operate in the financial markets. The NCFM program operates on our intranet
and is administered through our designated test centers located across India.

QUES 2.) Structure a better alternative to the Child Plans offered by Life Insurance
companies. The alternative suggested should cover both a life insurance plan as well as
an investment avenue.
(10 Marks)
Answ 2.) ALTERNATIVES TO CHILD PLANS
There is no other investment avenue guarantees that the required sum of money is
available for the child at a particular age. Various instruments like public provident fund
(PPF), mutual funds, shares, gold and real estate are self funded in nature. But, one needs
to be alive to make money grow through these instruments. In case of child insurance
plans, the parents can fund it till the time they are alive, but in case they meet an untimely
death, the insurer takes care of the remaining funding.

For example, one needs to accumulate a certain sum, say, Rs 20 lakh for a child aged 1
year when he/she reaches 21 years of age. Through mutual funds, at conservative rate of
12 percent, the parent will have to invest Rs 25000 per annum. However, to accumulate
 such an amount, one needs to remain alive through the time period. An untimely death
can break your objective.
A top notch insurance provider and the best children’s plan in India, the companies offers
a wide range of insurance plans for various types of people. For various purposes, you
can select various types of variety of plans.
If you want to start saving, you should certainly quit one of the savings plans because it
offers you basic protection coverage and makes it possible for you to save money
effectively. With a small premium amount, it is a typical premium plan. This strategy is
intended to effectively lay the foundation for your child’s plan.
With the aid of this best child plan in India, your kid’s goal can be successfully attained.
Features
 The Guarantee Maturity Benefit (GMB), Vested Bonus (VB), Guarantee
Additions (GA), and terminal bonus are all included in this plan (TB). For your
maturity benefit, you may select any one option for a cash installment. After
the policy reaches maturity, you will get your initial installment.
 All premiums have been paid in full and the policyholder dies, the nominee
will receive the death benefit. The death benefit is represented by this amount.
The GMB or the um assured whichever is higher, can be used.
 If all unpaid premiums have been paid the policy will be changed to one that is
fully paid when the policyholder sustains a permanent total disability as a
result of the accident.
 It offers a minimum entry age of 18 and maximum of 50.
 The maximum majority age of this scheme is 60 years.
 It also offers a rebate of higher assured sums.
 It offers a premium with policy tem deposits.
 There is a guaranteed maturity offered along with guaranteed additions to
policyholders.
It covers the features of both life insurance plans and works as an investment avenue where these
terms are defined as follows-
LIFE INSURANCE PLANS
Life Insurance can be defined as a contract between an insurance policy holder and an
insurance company, where the insurer promises to pay a sum of money in exchange for a
premium, upon the death of an insured person or after a set period. Here, at ICICI
Prudential Life Insurance, you pay premiums for a specific term and in return, we provide
you with a Life Cover. This Life Cover secures your loved ones’ future by paying a lump
sum amount in case of an unfortunate event. In some policies, you are paid an amount
called Maturity Benefit at the end of the policy term.

INVESTMENT AVENUE
 Investment avenues are the different ways that you can invest your money. Financial
securities including equity shares are one type of investment avenues. Mutual funds, non-
securitized financial securities, and real assets are investment avenues.

QUES 3.) Sumit Aswani, aged 34 years, working with a pharma company, has
approached you for preparing his Financial Plan. He earns salary of Rs. 21 lakhs per
annum. His wife Prerna, aged 32 years, is a homemaker. They have one son Kabir, aged
3 years. (You can make any assumptions to further build up your case.)
a. Sumit and Prerna want to start investing in higher education. Develop an investment
strategy to help them achieve their goal.
(5 Marks)
b. Sumit has expressed his desire to retire by the age of 55. Design a retirement plan for
him. (5
Marks)

Answ 3.) a. INVESTMENT STRATEGY

Sumit and Prerna wants to invest in the higher education. An investment strategy to help them
achieve their goal is explained as follows-
With the rising expense of education, it is more crucial than ever to begin saving as soon as
possible to reduce your financial load in the future. Student finance for higher education will
undoubtedly be costly, and thus it is very important to start investing at the right place at the
right time. But before you take this step, your investment objectives must be crystal clear to
you. Pooling money professionally, managed by a Fund Manager, is called a mutual fund.
There are three broad categories for a mutual fund: equity, debt, and hybrid. For instance,
assume you have a one-year-old child, and your investment horizon is likely to fall between
10-15 years, depending on your investment aim. As a result, you should consider investing in
equity-oriented schemes for achieving your financial goal for supporting your child’s
education. Since this is a long-term approach, the returns will be good enough to help you
build that corpus.

You might want to keep your money in an equity fund for a long period. However, after a few
years of making such an investment, you can consider moving your investments to liquid
funds to prevent significant volatility and assure liquidity based on your future needs.

Indians have the most confidence in gold investments regardless of all available investment
possibilities. On the other hand, physical gold carries a higher risk of purity and comes with
additional costs, such as producing jewellery, among other things. Furthermore, dealing with
actual gold entails a great deal of effort and price in the form of locker purchases, etc. Gold
ETFs, like stocks, are traded on the National Stock Exchange and may be bought and sold at
market rates. Such funds are passive assets whose value is tied to the gold price in
international markets because they exclusively invest in gold bullions.

Due to fund alternatives that provide steady returns, low levels of risk, or both, ULIP
plans have become more popular. As a result, many insurance companies, banks, and
financial organizations offer these plans in India, allowing policy purchasers a variety of
alternatives to select from. Your money will generate high returns throughout the vesting
period, assuring good ROI on the investments and support your little one’s educational costs
in the future.

Like fixed or recurring deposits, term deposits have traditionally been favored by a wide
section of Indian investors due to the low risk they entail. Although they give low yields
(about 6.5 percent to 7.5 percent for big banks), they are a low-risk investment choice. These
deposits are made for a specific time and have limited liquidity. Furthermore, banks impose
fines on investors who make early withdrawals. The values on such investments over ₹10,000
per year is taxable.

Answ 3.) b. RETIREMENT PLAN

Sumit has expressed his desire to retire by the age of 55. A retirement plan for him is designed as
follows-
A retirement plan is a multi-step process that evolves with time. The following steps will
help you map out a retirement plan:

Set a budget - list out 30 things in order of priority breaking them into short, medium and
long term goals. Allocate your current income to get an estimate. Evaluate your current
financial position - examine your current financial position versus your financial goals, be
more proactive about savings, investments and income. Identify your income sources -
consider all your income sources including insurance, investment portfolios, assets, and an
option to do a part-time job to take charge of your retirement funds.
 Are you running short? Re-evaluate your investment, make catch-up and bite-sized
contributions to fill the gap. Retirement Plans are a category of life/annuity plans that are
specially designed to meet your post-retirement needs such as medical and living expenses.
You would want to maintain the same lifestyle post retirement. There could be an increase
in your day-to-day expenses due to an increase in inflation. You would also have post-
retirement dreams such as travelling the world, pursuing a hobby, starting a new venture,
and more. By planning in advance, you can be financially prepared for your retirement.

This is where pension plans/retirement plans come in. Both pension plans and retirement
plans are a category of life insurance plans that are specially designed to meet your post-
retirement needs. To ensure that you can enjoy your golden years with financial
independence, these plans help cover your expenses and secure your future.

Your retirement should be the best part of life. After all, you work hard to achieve your
dreams and fulfil your responsibilities. You save today so that you have a surplus for
tomorrow. Therefore, you would like to have peace of mind after you retire, right? You may
want to relax, inculcate a hobby or look back on your journey till now.All this is possible with
some planning and smart choices you make. Keep reading to know about retirement plans and
how they can help you achieve this last mile. It provides a regular and steady income after
retiring or immediately after investing, depending upon the type and options chosen.

As per section 80CCC of the income tax act, 1961, a deduction of Rs.1.5 lakhs is applicable
on investment in pension plans. It is important to note that this deduction cannot be claimed
separately from section 80C. It simply means that the total tax relief claimed under section
80C and 80CCC cannot be more than Rs.1.5 lakhs which includes all 80-C eligible
investments such as ELSS funds, tax-saving fixed deposits, PPF (Public Provident Fund), etc.

Payment duration is the total duration for which you keep receiving the pension after
retirement. For instance, if your plan offers to pay you a regular income from the age of 60 to
the age of 75, then the payment duration is 15 years.