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Single Window Services

Chapter 2. ORGANIZATION PROFILE

2.1 History of Organization
(Alparambha: Kshemakara) – It’s always advisable to make a small and humble
beginning. It ultimately pays off handsomely in the long run. The concept of Single Window Services (SWS) came out of a need to provide a customercentric, hassle-free and highly reliable package in an environment of complete trust and credibility. Promoted by a highly qualified technocrat with a keen eye for financial markets, SWS today is a symbol of quality, reliability and, above all, complete credibility. The products and services offered by SWS encompass a vast array of financial options such as Life & General Insurance, Mediclaim, Deposit schemes from reputed corporate houses, Postal & other Savings Schemes, Automobile, Home & Personal loans, Mutual Funds and, above all, all forms of policy servicing. The SWS was incorporated in 1994, and the certificate of Commencement of Business in 1996. The age-old wisdom, which has percolated over generations, has proved its efficacy time & again in whatever ventures we pursue. This, precisely, is the philosophy that is followed at Single Window Services, a complete solution provider for all your financial needs, future provisions and planning. It has been our constant endeavors, as the name aptly suggests, to provide a complete bouquet of financial services to all our clients; be it life or general insurance, or a multitude of investment options available in today’s ever-expanding world; or simply future planning with some specific goal in mind via a single interface. Although most professionals today tend to think that they have adequate life and health insurance cover, the ground realities prove otherwise. In most cases, this realization comes too late. In order to overcome this problem, SWS has adopted a unique methodology of Investment

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& Insurance Audit for all its clients. This helps them realize their actual value and take appropriate corrective steps well in time. In today’s ever-changing world, keeping up-to-date is mandatory at all levels of functionality. Training & Orientation Activity, therefore, has become an inseparable part of any enterprise. SWS, apart from offering turn-key, single-stop financial services, has also provided for a comprehensive facility that can be used for conferences, meetings, training & orientation seminars, mini-exhibitions, on-line examinations, etc. With a capacity that can accommodate 30 participants, the centrally air-conditioned Training Hall at SWS provides the best of audio-visual facilities combined with comfortable seating and a soothing ambience to help make any program a grand success. A state-of-the-art public address system, provision for multiple computer terminals, slide & LCD projector, broad-band connectivity, fully-adjustable lighting system and piped music that soothes and enhances participants’ mood are just a few of the features that go hand in hand with the conference-cumtraining hall at SWS. The Training Division at SWS also offers you a one-stop solution combining catering, stationery and other support services when you organize events at SWS Training Hall. While the facility is conveniently located (just 2 minutes’ walking distance off College Road), the professional support services play a key role in the success of any event. The Training Division maintains a database of professional trainers / facilitators in various subjects and can also organize training schedules suited to your specific requirements. You can choose from a variety of pre-designed course options or request for a custom-designed training program. A number of options combining subjects such as Communication Skills, Selling Skills, Value Engineering, Personal Total Quality (PTQ), Business Ethics, etc. are currently available with the services of experienced facilitators associated with SWS. We, at SWS, are committed to provide one-stop quality services to all our customers. We sincerely believe that ‘Excellence is the best bargain you can offer’!

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Single Window Services

2.2 Organization Flow Chart

CEO

Chief Financial consultant

Back Office Staff

Chief Tax consultant

Marketing Dept

Account Dept

GIC

LIC

Mutual Fund

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Achieve a high level of client satisfaction through value-added services like comprehensive financial planning.. ALLIED SERVICES IN THE FORM OF NETWORK 12 . support and back-up services and providing fair return on their investments and savings.Single Window Services 2.. 2.4 Services Offered by company • • • • • • • • LIFE INSURANCE GENERAL INSURANCE MUTUAL FUND STOCK TAX ADVISORY @ FINANCIAL PLANNING CLAIM SETTLEMENT SUCCESSION PLANNING.3 Objective of company In next three years. the Most Preferred Financial Advisor in Nashik and surrounding districts.

setting life goals . Financial planning is process that helps a person work out where he or she now. grow. Are examples of goals in life that can be measure in monitory terms? Every individual can benefit from objective help to create. Financial planner can guide individuals to achieve their ultimate aim of spending retire life peacefully without compromising living standards.. We may need money at the time of marriage of a daughter or son & we need money at that time only. Buying a home providing for a Childs education or marriage or retirement. Or money will be needed simply at the time of retirement. Successful financial planning makes a considerable contribution to the sum total of human happiness. We need finance at different times for different goals. examining the person’s current financial status & coming up with a strategy & plan for how the person can meet his or her goals given the persons current situation and future plans.Single Window Services Chapter 3 INTRODUCTION TO FINANCIAL PLANNNG Each one of us needs ‘finance at various stages of our life & to ensure that we have the money available at the right time when needed. The process involves gathering relevant financial information. what he or she may need in the future & what he or she must do to reach the defined goals. and not later! Or at the time of medical emergency and again at the time as later the money helps. other lifestyle objectives systematically without any anxiety. The objective of financial planning is to ensure that the right amt of moneys available in the right hands at the right point in the future to archive an individual’s financial goals. 13 . A Qualified financial planner will provide advice on: • • • • • • • Systematic savings Cash flow management Debt management Asset allocation for investment Managing risk through insurance planning Tax strategies to increase inventible surplus Distribute residual wealth through estate planning.

tax saving etc.1 DEFINITION & SCOPE. Definition’ Financial planning is process of – • • • -Identifying person’s financial goals -Evaluating existing resources current financial position -Designing the financial strategies that help the person achieve those goals Financial planning includes investment planning. retirement planning. tax planning. retirement planning. To protect the wealth & also create & make a growth in the client’s wealth Some other goals of financial planning are education planning. AIMS OF FINANCIAL PLANNING The first & basic aim of the financial planning is. foreign tour planning. Financial planning is a highly personalized service where you need to understand not only the total picture of client’s financial position but also his behavior attitude & risk profile. 14 . risk mgmt. estate planning. NEEDS Financial planning is a highly personalized service where you need to understand not only the total picture of client’s financial position but also his behavior attitude & risk profile.Single Window Services 3. wedding planning.

Single Window Services Fundamentals of Financial Planning Financial planning is the process of solving financial problems and achieving financial goals by developing and implementing a personalized "game plan. What is Included? • Cash Flow Management This aspect of planning deals with the day to day allocation of income. it involves choices Spend now or save for later? Pay off existing bills or increase retirement savings? Focus savings money on short term or long-term goals? A true financial plan does not focus one aspect or product. estate and inheritance taxes. • Tax Planning and Management This area focuses on the understanding of and application income tax law. minimizing these taxes. when possible. 15 . and its effective use in paying for current living expenses and in accumulating assets which will be used in meeting financial goals." In order to be effective this "plan" must take into consideration an individual’s overall picture. but instead seeks to take all areas of planning into consideration when making financial decisions. and. It must be: • • • Coordinated Comprehensive Continuous Financial planning is like all other phases of life.

Develop & suggest various alternatives. or property. strategies to archive client’s goals. income. These could include buying a home. It includes the use of insurance products and strategies. After implementing the plan the monitoring & regular preview of the plan is done. or providing for retirement. collect all related financial data. • Estate Planning and Management The final phase of planning is for the transfer of assets to our heirs with minimization of taxes and other costs. implementation of the financial plan is take place. and personal savings accumulation plans. analyses the data. After selecting appropriate alternative. Task of financial planner Task of financial planner is to make a good client planner relationship. planning for college. • Investment Planning and Management Almost everyone has accumulation goals for which investments must be made and managed. evaluation of various alternatives & selection of appropriate alternative. The modifications as per the market conditions as & when required are implemented 16 .Single Window Services • Risk Planning and Management This area of planning deals with the risk of losing life. Retirement strategies encompass the understanding of the employersponsored retirement plans. assist the client to develop his goals. • Retirement Planning and Management By far the most common accumulation goal is the ability to become financially independent.

Single Window Services Planning By Keeping Life Stages In Mind Single Family Retirement Leaving School Earner Marriage Buying House Providing For Family Retirement Student 1st Job Marriage House Kids Education Retirement 17 .

all this process reduces stress of the client 18 . identify your weaknesses & suggest improvements.Single Window Services Process of financial planning • • • • • • Establishing & defining the client planner relationship Gather client data including goals Analyze & evaluate your financial status Develop & present financial planning recommendation Implement the financial planning recommendation Monitor the financial planning recommendations Benefits of financial planning • • • • • • Security through future planning Analyses every aspect of your financial situation Identified weaknesses & suggest improvements Reduces stress Proper documentation for audit available Prepares everyone to defeat inflation Financial planning is beneficial for secure the future of the client through planning his future goals. It analyses your financial status. financial status. Financial planning makes available the proper documentation for audit .

fixed deposits. debentures. your entire portfolio does not suffer the impact of a decline of any one security. When your stocks go down. However. debentures. Different securities perform differently at any point in time. Diversification is possibly the best way to reduce the risk in a portfolio. but it’s really just the simple practice of “NOT PULLING ALL YOUR EGGS IN ONE BASKET. fixed deposits and mutual fund units. 19 .Single Window Services Meaning of Portfolio A Portfolio is a combination of different investment assets mixed and matched for the purpose of achieving investor’s goal(s). There have been all sorts of academic studies and formulas that demonstrate why diversification is important. you will reduce the risk of your entire portfolio getting affected by the adverse returns of any single asset class. Advantages of having Diversified Portfolio • • • • A good investment portfolio is a mix of a wide range of asset class. Diversification of Portfolio It is a risk management technique that mixes a wide variety of investments within a portfolio.” • If you spread your investments across various types of assets and markets. you may still have the stability of the bonds in your portfolio. mutual fund units to items such as gold. so with a mix of asset types. Items that are considered in the portfolio can include any asset. for most investors a portfolio has come to signify an investment in financial instruments like shares. It is designed to minimize the impact of any one security on overall portfolio performance. shares. silver and even real estates etc.

what you may need in the future and what you must do to reach your goals. such as education funds for children or by ourselves. Funds to be invested come from assets already owned.Single Window Services What is investing? Investment refers to a commitment of funds to one or more assets that will be held over some future time period. investment will mean a measurable asset retained in order to increase one’s personal wealth. These six steps are: 20 . What Process Do We Use to Invest? The financial planning process consists of six steps that help you take a "big picture" look at where you are financially. Regardless of why we invest we should all seek to manage our wealth effectively. Anticipated future consumption may be by other family members. ranging from the value of their services in the workplace to tangible assets to monetary assets. For our purposes. Why invest? We invest to improve our future welfare. By foregoing consumption today and investing the savings. Using these six steps. Almost all individuals have wealth of some kind. possibly in retirement when we are less able to work and produce for our daily needs. and savings or foregone consumption. obtaining the most from it. Anything not consumed today and saved for future use can be considered an investment. borrowed money. you can work out where you are now. This includes protecting our assets from inflation. we expect to enhance our future consumption possibilities. taxes and other factors.

The planner should go over the recommendations with you to help you understand them so that you can make informed decisions. investments or tax strategies. The financial planner should clearly explain or document the services to be provided to you and define both his and your responsibilities. based on the information you provide. The financial planner should analyze your information to assess your current situation and determine what you must do to meet your goals. this could include analyzing your assets. The financial planner should offer financial planning recommendations that address your goals. current insurance coverage. The financial planner should ask for information about your financial situation. The financial planner should gather all the necessary documents before giving you the advice you need. 3. You and the planner should mutually define your personal and financial goals. understand your time frame for results and discuss. The planner should also listen to your concerns and revise the recommendations as appropriate. Depending on what services you have asked for. Developing and presenting financial planning recommendations and/or alternatives. including goals. 4.Single Window Services 1. The planner should explain fully how he will be paid and by whom. 2. You and the planner should agree on how long the professional relationship should last and on how decisions will be made. liabilities and cash flow. if relevant. how you feel about risk. Gathering client data. Analyzing and evaluating your financial status. 21 . Establishing and defining the client-planner relationship.

Believe that financial planning is primarily taxed planning. Common Mistakes. Neglect to re-evaluate their financial plan periodically. as your life changes. Think that using a financial planner means losing control. Don't set measurable financial goals. 6. if needed. Think that financial planning is only for the wealthy. You and the planner should agree on who will monitor your progress towards your goals. 3. Think that financial planning is for when they get older. Wait until a money crisis to begin financial planning. The planner may carry out the recommendations or serve as your "coach.Single Window Services 5. 2. Confuse financial planning with investing. 7. Implementing the financial planning recommendations. 4. 8. 5. 9. Expect unrealistic returns on investments. 10. If the planner is in charge of the process. It may be helpful to be aware of some common mistakes people make when approaching financial planning: 1. Think that financial planning is the same as retirement planning. 6. You and the planner should agree on how the recommendations will be carried out." coordinating the whole process with you and other professionals such as attorneys or stockbrokers. Monitoring the financial planning recommendations. she should report to you periodically to review your situation and adjust the recommendations. 22 .

Postal Schemes for Investment. Debt market. V.Single Window Services INVESTMENT OPPORTUNITIES IN INDIA From the Investment point of view following are the main opportunities available for Investment in India. II. each of these schemes fulfills the objectives of investors and these schemes having its own advantages and disadvantages but by combining all these major investment schemes we can make the best portfolio for investor which fulfills the expectation and financial goals of the investor. 23 . Insurance. VI. III. These Investment opportunities include – I. IV. Stock Market. Mutual Fund. Real Estate.

Example for a better understanding of how market forces determine stock prices. ABC Co. if there are more sellers than buyers (i. buyers will have to bid a higher price for this stock to match the ask price from the seller which will increase the stock price of ABC Co. commercial or global news can affect the market.e. Disadvantages of investing in Stock/Share market • • suffering • Share market is very sensitive and highly volatile so there is high risk involved. less supply).Single Window Services I. demand and supply for a particular stock). in the market.e. Stock Market – Stock markets refer to a market place where investors can buy and sell stocks. the chances of losses become very high. If the investment is made without having proper knowledge. The price at which each buying and selling transaction takes place is determined by the market forces (i. Ltd. 24 .e.e. high supply and low demand) for the stock of ABC Co. Today the INFLATION rate is around 12%. Ltd. high demand) and very few people will want to sell this stock at current market price (i.a. enjoys high investor confidence and there is an anticipation of an upward movement in its stock price. if invested for long term in the growing market is able to give you the handsome returns compared to other investments. after one year by the investor. Ltd. in this scenario investment in the stock In the capital market there is no capital gain tax on the profit made by selling of shares One can expect assured returns of 25-30% p. More and more people would want to buy this stock (i. Advantages of investing in Stock/Share market by Long Term Investment – • companies. • • • Investor can receive the benefits of dividend or bonus shares. As discussed earlier that the stock market is very sensitive and volatile so any political. Therefore. On the contrary. its price will fall down.

When an investor subscribes for the units of a mutual fund. Number of units held multiplied by the NAV of the scheme) 25 .Single Window Services II. For example If the market value of the assets of a fund is Rs.000/10.50 (i. Since the stated investment objectives of a mutual fund scheme generally form the basis for an investor's decision to contribute money to the pool. debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund).000 Then the NAV of this scheme = (A)/(B). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder.000 or 10. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities.e. 000 The total number of units issued to the investors is equal to 10.100.00 Now if an investor 'X' owns 5 units of this scheme Then his total contribution to the fund is Rs. Any change in the value of the investments made into capital market instruments (such as shares. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own. NAV of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors. Mutual Fund Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invests the money thus collected into asset classes that match the stated investment objectives of the scheme. 100. a mutual fund cannot deviate from its stated objectives at any point of time. who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own.e. Every Mutual Fund is managed by a fund manager. i.

Single Window Services Advantages of Mutual Fund for an Investor – • • • • • • • • • Portfolio Diversification Professional Management Less Risk Low Transaction Costs Liquidity Choice of Schemes Transparency Flexibility Safety Disadvantages of Mutual Fund for Investor – • • • Costs Control Not in the Hands of an Investor No Customized Portfolios Difficulty in Selecting a Suitable Fund Scheme 26 .

e. termed as premium. quarterly. or even onetime). In order to get the insurance. on a periodical basis (say monthly. Insurance Insurance is a basic form of risk management. and the company that promises to honor the claim. annually. Concept of Insurance / How Insurance Works The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. you may need insurance in the following areas: • • • • • • • • Life Health Home Motor Personal Liability Professional Liability Business Disability 27 . the insurer) a certain amount. In case a person actually suffers a loss on account of such risk. is termed as Insurer. the insured is required to pay to the insurance company (i.Single Window Services III. INSURANCE COVERS Depending on the circumstances. in case such loss is actually incurred by the insured. which provides protection against possible loss to life or physical assets. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums. he is compensated out of the same pool of funds. A person who seeks protection against such loss is termed as insured.

You can assess the in different ways. Calculate the shortfall in the total expenses and income. allowing for increases due to inflation and other factors. The Multiple Earning Method: The amount of life cover you should buy should be 3 to 10 times of your gross annual earnings. Life insurance needs analysis: The first in determining what type of insurance to buy is a ‘needs analyses. It completely ignores your financial resources and needs. Add non-recurring expenses like children’s marriage. You need to assess the financial impact on your family if the breadwinner should die. Calculate the present value of the shortfall. The steps for calculating the amount of cover under this method are as below: • • • • • • • • Deduct your personal expenses from your total income. It is a legal contract between an insurance company and policy owner. 2. 28 .Single Window Services LIFE INSURANCE: Life insurance is a risk sharing mechanism whereby a policy owner (the insured) agrees to invest some money with an insurance company that obligates itself to pay money to a beneficiary on the insured’s death. Calculate the number of years left in your earning life (Retirement age-Current age) Project family expenses up to retirement. The ‘ Human Life Value’ Method: This method values human life at the present value of all future earnings potential. 1. This is the surplus that you leave for your family and for your investments. Subtract any pension benefits that they might get at your death.

e. TERM PLANS: In the event of death in the policy period. Pensions Plan 3.Single Window Services 3. the sum assured. You get nothing if you survive beyond the policy period. They provide with an alternate income stream after your retirement. These are: 1. 2. Term Plan 2. The amount of the life cover under this Method is calculated by subtracting the total of your current financial resources from the present value of your family’s projected expenses. your nominees receive the amount of your cover i. Investment-cum-insurance products • • • • Endowment plans Money-back plans Whole life plans Unit linked insurance plans 1. 29 . The ‘Needs’ Method: This method tries to calculate the amount required by your family to maintain their existing lifestyle and their financial goals. FORMS OF LIFE COVER: Life insurance covers are availably three forms. Each form exists for a different objective. PENSION PLANS: Pension plans are actually pure investment products.

The insured has to pay premium till a specified age. Part of the premium paid is linked to the policy period and the sum assured and the rest is invested. the survival benefits are disbursed at the end of the policy term. 4. the premium charged for endowment plans is 5-6 times higher than the premium for term plan. Money back policy is a policy opted by people who want periodical payments. 4. MONEY-BACK PLANS: Money-back plans are a variant of endowment plans. you still get back the sum assures and the returns. 30 . On reaching that age. In case of the endowment plans. UNIT LINK INSURANCE PLANS: It can be considered as a combination of mutual funds and term plans. Even if you survive the term. endowment plans and money back plan provide cover only till a specified age. spread over this time period.Single Window Services 3. In case of death of the insured within the term of the policy. 5. and the sum assured is paid through periodical payments to the insured. full sum assured along with bonus accruing on it is payable by the insurance company to the nominee of the deceased. So if you die during the policy Term. ENDOWMENT PLAN: They also offer some returns on the premiums paid by you. However. your nominee’s get the sum assured plus some returns. the insured has the option to encash the maturity benefits pr continue the cover for his entire lifetime. Whole life plan provides cover till end of life. A money back policy is generally issued for a particular period. WHOLE-LIFE PLANS: The term plan. while in money-back plans the payback is staggered through the policy period.

LiabilityUnder statute Under common law Under contract 31 . PropertyDamage to property Loss of income Indirect losses 3. PersonalMedical Disability 2.Single Window Services NON-LIFE INSURANCE TYPES OF NON LIFE INSURANCE: 1.

debentures. Use of debt • • • • Used to bring in an element of stability in the picture Makes the investment a bit less risky than equity There is no cause for daily monitoring unless there is an intention to trade the instruments There is an element of surety about the returns when held till maturity and there is not credit default 32 . This is an important asset class as it is not just returns but the nature of the portfolio that has to be taken into Consideration for different individuals. DEBT Debt is that parts of the total investment that will yield steady returns and provide an element of stability to the whole portfolio of the individual.Single Window Services IV. and deposits. Features of debt • • • • • • • • • • The returns here are in the form of interest Coupon rate determines the interest received for investors The yield is another important factor to look at Yield measure the return of an instrument that is held till its maturity Yield changes at different points of time depending upon market conditions Yield is relevant for traded debt instruments This will give the total return for debt Investors can put their money into debt directly or through mutual fund They are quite steady in returns There are various debt instruments like bonds.

Bonds raise capital for the issuer by borrowing money from investors. Treasury Bills: Short-term (up to one year) bearer discount security issued by government as a means of financing their cash requirements. The various types of Bonds are as follows: Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic interest is paid. With a bond note. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price. The difference between the issue price and redemption price represents the return to the holder. cities. at the maturity of the bond.Single Window Services Bonds • • • A bond is a debt instrument issued for a period of one year or more. 33 . • The government. the issuer is basically promising to repay the principal along with interest on a specified date. The buyer of these bonds receives only one payment. corporations and many other types of institutions sell bonds. also known as the maturity date. This is a more conservative investment. states.

Cheque facility available.5 lakh Joint A/c: 2 lakhs Any individual can open an account. tax-free returns Kisan Vikas Patra 8.5 Money doubles in 8 years.000 in PPF) qualify for deduction A Compounded half-yearly b Compounded yearly c Compounded quarterly d Payable quarterly 34 .00 1. monthly returns Monthly Income Scheme 8.00d 1.00b 500 70.Single Window Services V. 5 years 5-year tenure 5 year tenure.500 lakhs Joint A/c: 9 lakhs Time Deposits Recurring Deposits Senior Citizens Saving Scheme 6. 70. 3.) National Savings Certificate Public Provident Fund 8.25-7.000 15-year term.41b 100 No limit Single A/c: 4. Postal Schemes for Investment – Following chart will explain some of the popular schemes of Postal Department for Investment – Minimum Interest Scheme (%) (Rs.50 200 7. also available with public sector banks No tax benefit No tax benefit 9. 7 months No tax benefit No tax benefit 6-year tenure. minimum age 55.00a 100 (Rs) No limit 6-year tenure Section 80C benefit Section 80C benefit Investment Investment Features Tax Breaks Maximum 8.50c 10 No limit No limit Available for 1. No tax benefit Sec 80C benefit: Investments up to Rs 1 lakh in specified securities (maximum of Rs.000 15 lakhs Single A/c: 1 No tax benefit Savings Bank Account 3. 2.

leading to future real estate development in India. Factors Favoring India’s Real Estate Investment • Increasing growth in residential properties due to lower interest rates. Real Estate Investment India Real Estate Investment is a significant feature of the Indian realty market under the initiation of the investors and developers. India Real Estate Investment involves minimum risk for getting maximum return. • • • • Burgeoning IT and ITES industry Growing commercial property market Emerging hospitality or hotel industry due to the exceptional boom in inbound tourism and the IT sector. • Growth of retail market in India due to increasing demand from retailers. 35 . The India Real Estate Investment is facilitated by the liberal economic policies of the government. India Real Estate Investment has rising demand in every sector like commercial. better job prospects and increase of nuclear families. retail. industrial and hospitality. easy availability of housing finance. residential.Single Window Services VI. The development of private ownership of property real estate in India has become a major area of business with India Real Estate Investment playing the vital role. But maximum demand is observed in the booming IT sector. Development of the special economic zones (SEZ). higher disposable incomes. rising income.

Aggressive portfolios generally have a higher investment in equities. So Portfolio planner must have to find out the risk appetite of the client with the help of RISK ANALYSIS tool. To demonstrate the types of allocations that are suitable for these strategies. which pays a bit higher interest. which put safety at a high priority. Conservative portfolios will generally consist mainly of cash and cash equivalents. MODERATE.2 Presentation of the information either in Tabular form and / Graphical What are Risk Analysis and Portfolio Planning? Risk Analysis Risk analysis is very important tool for portfolio planning. age. Basic Types of Portfolios In general. because each persons risk appetite is different due to reasons like income level. are examples. The conservative investment strategies.Single Window Services 3. By analyzing the risk of client the portfolio planner came to know whether the client is AGGRESSIVE. are most appropriate for investors who are risk averse and have a shorter time horizon. for the sake of this potential high return. mentality. Note that the terms cash and the money market refer to any short-term. we'll look at samples of both a conservative and a moderately aggressive portfolio.are most appropriate for investors who. and CONSERVATIVE. or high quality fixed income instruments. financial goals and objectives.those that shoot for the highest possible return . have a high-risk tolerance (can stomach wide fluctuations in value) and a longer time horizon.) 36 . (You can read more about the money market in the. Money in a savings account and a certificate of deposit (CD). fixed-income investment. aggressive investment strategies .

Single Window Services 1. As such. Even if you are very conservative and prefer to avoid the stock market entirely. since the goal is not to beat the market. some exposure can help offset inflation. You could invest the equity portion in highquality blue chip companies. or an index fund. these models are often referred to as "capital preservation portfolios". Conservative portfolio: Conservative model portfolios generally allocate a large percent of the total portfolio to lower-risk securities such as fixed-income and money market securities. Your main goal with a conservative portfolio is to protect the principal value of your portfolio. 37 .

you chose securities that pay a high level of dividends or coupon payments.Single Window Services 2. With this strategy. but is willing to take on a higher amount of risk to get some inflation protection. 38 . A common strategy within this risk level is called "current income". Moderately Conservative Portfolio: A moderately conservative portfolio is ideal for those who wish to preserve a large portion of the portfolio’s total value.

and have a medium level of risk tolerance. 39 . select this strategy only if you have a longer time horizon (generally more than five years).Single Window Services 3. Since these moderately aggressive portfolios have a higher level of risk than those conservative portfolios mentioned above. Moderately Aggressive Portfolio: Moderately aggressive model portfolios are often referred to as "balanced portfolios" since the asset composition is divided almost equally between fixed-income securities and equities in order to provide a balance of growth and income.

40 . As such the strategy of an aggressive portfolio is often called a "capital growth" strategy. your main goal is to obtain longterm growth of capital. investors which aggressive portfolios usually add some fixed income securities. To provide some diversification. If you have an aggressive portfolio.Single Window Services 4. Aggressive Portfolio: Aggressive portfolios mainly consist of equities. so these portfolios' value tends to fluctuate widely.

41 . the value of the portfolio will vary widely in the short term. your main goal is aggressive capital growth over a long time horizon. Since these portfolios carry a considerable amount of risk. As such.Single Window Services 5. Very Aggressive Portfolio: - Very aggressive portfolios consist almost entirely of equities. with a very aggressive portfolio.

42 . FD’s. portfolio planner discussed his proposed investment pattern with his client and after getting approval from him he actually invest his money. for making diversified portfolio. • After making investment. Portfolio Planner has the duty to keep regular watch on client’s portfolio. Then he designs the investment of his client in stock market.Single Window Services Portfolio Planning • • • • After analyzing client’s risk appetite portfolio planner starts his actual work of Portfolio Planning. mutual fund. insurance. Firstly portfolio planner finds out the goals and objectives of his clients for investing in the right direction. realty investment and bonds etc. After designing the client’s portfolio.

Procedure for making Portfolio of the client – • • • • • • • • Fill up the Risk analysis and portfolio analysis of the client to know his/her personal and financial details. financial conditions. After this study the existing Investments of the client. Then prepare the Model investment Portfolio for client. After this keep regular watch on clients Portfolio and make necessary changes wherever required. portfolio analysis and planning we need to study live cases to understand how it works and beneficial in practical life. 43 . objectives and goals. financial conditions. invest his/her money according to that. objectives and financial goals – To study the risk analysis. For this I decided to take live examples of different persons with different objectives.2Data Interpretation and Analysis Sample Portfolio of different backgrounds. Then study the cash inflow and outflow pattern of the client. Then understand his/her financial goals.Single Window Services 3. After clients free consent for the proposed plan. Then analyze the Risk Appetite of the client.

Satish Deshpande & Family ________________________________ 44 .Single Window Services Case. ________________________________ Personal Financial Plan For Mr.

Single Window Services Introduction Goals and Objectives Current Financial Situation Assumptions Cash-Flow Management Risk management / Insurance planning Education Planning Retirement Planning Investment Planning Estate Planning Tax Planning Implementation / Action Plan Appendix 1: Personal Data Appendix 2: Personal Financial Fact-Finder 45 .

a. You are very keen on insurance part. 8182000/.Single Window Services Introduction Satish. Total 14 policies with sum assured Rs. You are currently earning Rs. Majority of the policies are Endowment and few Term Insurances. married to Pushpa age 39 recently. 3815000. 1352000/. and main support for the family. you are 42 years old. Your Net worth analysis shows a net worth of Rs. 4590000/.p. 3592000/- 46 . Within next 2-3 yrs she will stop her consultancy and focus on your children’s education and home.Total Assets now in July 2008 are Rs.and liabilities of Rs.premium p. Pushpa’s income in mainly for her own savings and personal use. And paying almost 200000/.a.

Risk planning & Management You want to have a complete family’s personal insurance program. Cash Flow & Net worth Management To have a significant cash flow surplus annually of around 15-18% of household gross income in order to provide a funding source for all future wealth accumulation targets. You have 2 sons. This includes covering all debts and having lump sums for generating income for the surviving family members. Investment Planning Asset portfolio should grow at a rate. 4. you expect both of them to be independent and do not need financial support. 3. Lowering the standard is unacceptable. 2. 5. Education of both the children. which supports the realization of the wealth accumulation goals for financial freedom (retirement) and education for children. retirement. Your goal is to give them the Best quality of Education in best colleges in India.Single Window Services Your Objectives & Concerns 1. By. At that time you want maintain the standard of living same as before retirement for yourself and spouse. 47 . Retirement Planning You have some personal savings. Any cash flow review should not significantly change your lifestyle. Your goal is to retire at age 60. You are however not aware whether the current recourses are adequate to provide retirement needs.

Estate Planning To have wills written for both husband and wife and to have a trust set up for the child.Single Window Services 6. 7. Sub-Objectives 1. Good long term capital appreciation 2. Returns from investment should be tax free or with minimum tax 48 . Tax Planning To optimize tax savings under the Indian tax system. You are keen on using up all personal tax relieves and rebates and to have good income reallocation planning.

Single Window Services
Current Financial Situation Cash Flow Analysis In-Flow Satish Income (after tax) Pushpa's Income (after tax) LIC Maturity Dividend Received Bank Interest Rs
1,352,040 165,000 134,000 20,000 2,100

Out-Flow Tax Payment Satish Tax Pushpa's Tax Subtotal Standard of Living Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments Personal Loan Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities Miscellaneous Subtotal Insurance Premium Satish life insurance Pushpa's life insurance Vehicle Insurance Other Insurance Subtotal Total Difference

Rs.
225,000 0 225,000 212,400 79,764 225,144 235,392 19,000 12,000 6,122 48,000 12,000 50,000 60,000 69,500 1,029,322 108,264 57,901 12,686 21,000 199,851 1,454,173 218,967

Total

1,673,140

49

Single Window Services
Cash out Flow is

1% 1% 4% 7% 5% 4% 3% 1% 3% 0% 1% 1% 16% 15% 15% 15%

5%

Satish's Tax Car loan installments (Honda City) Car loan installments (Wagon R) House loan instalments Personal Loan Car maintenance House maintenance Credit Card payments Eating out Grocerie s Travel Utilitie s Miscellaneo us Satish’s life insurance Pushpa’s life insurance Vehicle Insurance Other Insurance

50

Single Window Services
Net worth Statement – Current

Assets Liquid assets: Cash in hand Saving account Fixed Deposits Mutual Funds Sub Total Non-liquid assets: Properties Equities PPF Cars Life insurance cash value Other Assets Sub Total TOTAL

Rs. 20000 116950 0 776000 912950 3500000 200000 1005789 800000 764053 1000000 7269842 8182792

Liabilities Home Loan Car loans Personal Loan

Rs. 1780000 456000 1356000

TOTAL NETWORTH

3592000 4590792

51

Single Window Services Net worth Statement – Current Assets 0% 1% 12% 9% Saving account Mutual Funds 9% Properties Equities 10% PPF 44% 13% 2% Life insurance cash value Other Assets Cars Cash in hand 52 .

92533/56550/6395/6351/Insurance Cover 3815001/1142653/75000/100000/- The current property insurance summary is as follows: Property Current House Cars Other Household Assets Sum Assured Not Insured Adequately Covered Not Insured 53 . Pushpa Master Umesh Master Amey Plan type Endowment + Term Insurance Endowment Unit Linked Unit Linked Premium p.Single Window Services Risk Management/Insurance Planning The current personal insurance summary is as follows: Person Mr. Satish Mrs.a.

00 0 1.26% 3.81% 15.00 0 764.50% 1.862.00% 4.14% Return Rate Weighted Return Rate Investments 4% 7% 35% 27% Saving Account Equities Life insurance Mutual funds PPF 27% 54 .Single Window Services Investment Planning The following table lists out the portfolio of investment-grade assets currently owned and the portfolio return rate: Asset Saving Account Equities Life insurance Value Mutual funds PPF Rs 116.48% 8.00% 2.00% 1.07% 4.50% 0.78 9 2.20% 18.79 Total: 2 Portfolio Return: 9.05 3 776.005.95 0 200.

Education Planning It seems that you have not specifically allocated funds for education funding of your two sons. You have not really focused on this aspect. It seems that your major focus is on your current profession and you have not given a thought on Retirement Planning. The other facts and data are collected in the “Personal Financial Fact-Finder” form as attached in the Appendices. other than the nominations done for Mutual funds and Insurance policies. 55 .Single Window Services Retirement Planning There is currently no clear plan on retirement. Estate Planning There is no arrangement of any nature including will and trust done.

Single Window Services Assumptions Following are the assumptions based on the facts and discussions with you.5 % p.a.a.a. Pre-retirement investment portfolio rate of return should be 12% Post-retirement investment portfolio rate of return = 10% 56 . Rate of inflation at 7 % per annum based on government official rate on Consumer Price Index. Investment-linked bond funds at rate of return of 7. covering capital gain. Spouse’s income will stop within next 3 years. Equities investment rate of return at 18% p. Property investment rate of return at 10 % p. Investment-linked equities funds at rate of return of 15% p. on long-term basis.a. Your income will increase at the rate of 10 % per annum until age 60.

we have studied and done an analysis. House Loan: . This is the area where we can think of repaying it earlier. In recommending changes. We will see any alternative available to reduce the EMI contribution.This is taken from 3 banks at different time and at different rate. which is slightly on higher side. It comes out to be 6. So its better we should keep it as it is. 1356000/- 57 . Our analysis and recommendations: As you are living with your parents the household expenses are very much in control. As it is higher end car the loan rate is vary low. Car Loan (Honda City): . We should really appreciate that you don’t have any balance on credit card. Personal Loan: . we have kept in mind some basic principles: Your lifestyle needs to be maintained as original as possible. Interest rate comes out to be 8%. Based on no change or very minimal change in lifestyle.In this case the interest rate is almost same with other banks so there is hardly any scope for debt arbitrage. Any reshuffling of assets including paying off debts or loans must leave behind enough liquid assets that cater to the 3-6 months’ of emergency buffer fund. In your routine outflow the major contribution is of EMI of different loans.This loan is also at lower side.7% only. The loan will end in Aug 08 Car Loan (Wagon R): .Single Window Services Recommendations Cash Flow Management The current cash flow surplus is very low at around 2 Lacs per annum. Better to continue this loan without any change. Total outstanding amount is Rs. The average interest rate of all 3 loans comes out to be 16%.In this case the loan was taken in 2003.

976000/. 587000/-. Surplus of Rs. Total Loan available is around Rs.from that.Single Window Services We have various options available to repay this loan. 319000. Loan interest rate is 9% Current value of your investment in Mutual Fund & Shares is Rs. (LAS) current interest rate for that is 13%. 450000/.e. Considering that we will repay the principle also then equivalent EMI will be 11338/- 58 . Another important point is in LIC loan interest payment is mandatory (4. i.5 % of loan amount half yearly) LAS is CC loan.will be available at 13% we will utilize Rs. Your Insurance portfolio shows that majority of the policies are of Endowment type and few are Term insurances. so it will act as buffer to adjust the market condition. We will withdraw Rs. Currently PPF has much more amount getting 8%.we have a product called Loan against Securities. 488000/. Adding above 3 (587000+450000+319000) we will get Rs 1356000/We can close the personal loan from above amount. Hence we can adjust the principle repayment in both the loans as per our wish. We can pledge all the investment in those against which 50% loan will be available. Rs. 38000/. We have taken out the Loan quotation for all those endowment policies.will be available which we will not utilize as LAS is fluctuating on market.

000 2.000 134. 225.192 66.837 318.144 69.500 929.352.264 57.14 0 Total Difference 1.000 199.673.851 Total 1.354.000 69. 1.000 50.901 12.122 48.000 6. the new cash flow statement will look like the followings: Cash Flow Statement .000 60.000 212.303 59 .100 Out-Flow Tax Payment Satish Tax Pushpa's Tax Others Subtotal Standard of Living Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments LIC Policy Loan Loan Against Securities Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities Miscellaneous Subtotal Insurance Premium Satish’s life insurance Pushpa's life insurance Vehicle Insurance Other Insurance Subtotal Rs.Single Window Services If the above reductions are implemented.686 21.Revised In-Flow Satish’s Income (after tax) Pushpa's Income (after tax) LIC Maturity Dividend Received Bank Interest Rs.000 20.000 0 225.04 0 165.000 12.400 79.864 19.000 12.986 108.764 225.

Single Window Services Revised Cash Out Flow Satish’s Tax 2% 1% 4% 8% 5% 4% 4% 1% 4% 0% 1% 1% 5% 5% 17% 6% 16% 17% Car loan installments (Honda City) Car loan installments (Wagon R) House loan installments LIC Policy Loan Loan Against Securities Car maintenance House maintenance Credit Card payments Eating out Groceries Travel Utilities M iscellaneous Satish’s life insurance Pushpa’s life insurance Vehicle Insurance Other Insurance 60 .

2. we can see a dramatic change in the cash flow surplus. 1.000 TOTAL NETWORTH 3.273.000 587.Single Window Services The new net worth statement after debt arbitrage will be as follows: Net worth Statement – Revised Assets Liquid assets : Cash in hand Saving account Fixed Deposits Mutual Funds Sub Total Non-liquid assets : Properties Equities PPF Cars Life insurance cash value Other Assets Sub Total TOTAL Rs.780.000 456. we now have a surplus of Rs. This surplus is necessary to do the funding.18 Lacs.590. 61 . 20000 116950 0 776000 912950 3500000 200000 686789 800000 764053 1000000 6950842 7863792 Liabilities Home Loan Car loans LIC Policy Loan Loan Against Securities Rs.000 450.000 4. which can be used to fund your goals and objectives in life. 3. as current assets may not be sufficient to do the task. From Rs.792 Here.18 Lacs surplus.

Single Window Services Revised Asset 0% 1% 13 % 10 % 10 % 9% 3% 44 % 10 % Cash in hand Saving account Mutual Funds Properties Equities PPF Cars Life insurance Value cash Other Assets 62 .

1.Single Window Services Risk Management/Insurance Personal Insurance You are keen to upgrade your family’s insurance program so as to meet the goal and objectives. There are 2 types of liabilities. there are certain responsibilities that you have to complete. 2. 1. Legal Liability Moral Liability Legal Liability Amount 1780000 456000 1356000 3592000 Head House Loan Car Loan Other Loans Total 63 . which we should consider while deciding the Sum Assured. Calculations for Sanjay’s sum assured : • Death & Total and Permanent Disability As you are the breadwinner of the Family.

Rate of Return: 8% (Risk Free) Inflation: 5% Inflation Adjusted Rate of Return: 2. S/A. 20000/. 854200 Mr. today = Rs. Equities.Monthly.Single Window Services 2. a.e. Moral Liability Maintaining same life style of the family Based on principal liquidated basis: Family should get at least Rs. Education of your children Present value of Future requirement of Education of both the children is calculated which comes out to be: Rs. 3592000 7498200 3815001 2543792 4731407 64 . 6644000/b. Sanjay Legal Liability Moral Liability Less: Current insurance Less: Net worth of family on investment assets only i. PPF. which will cover the pension of spouse also.86% Principle amount req. Mutual Funds. Cash Value of Insurance Additional insurance required Rs.

death cover will not be an important need as the financial loss to the parents will be minimal.Single Window Services For wife.per month per child be given. sum assured of half of husband’s amount (Moral Liability) i. 4000/.is recommended for both the children Education Planning Table of cost for the degree program for Children. Rs. husband will continue working and supporting the remaining family.e. 65 . Wife Total basic sum assured needed Less: Current insurance Additional insurance required Rs. a basic sum assured of = Rs. 3700000 should suffice. To generate this income perpetually with 8% (risk free rate). disability cover is needed and it is recommended that disability income of Rs. However. the need of wife will be arbitrary as if something were to happen to her. 3700000 1100000 2600000 For the children. Therefore. 600000/.

44 104863.3 300146.2 150073 160578.no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 HE 80000 85600 91592 98003.2 280510.5 171818.2 367691.100000/.7 140255.4 128462.4 210485.1 168388.8 393430.3 481969 98003.3 120058.6 367691.7 112204.2 180175.2 450438.1 321156.1 210485.6 140255.269/- 8399/25608/- Retirement Planning Financial Independence by age 60 Retirement income projection by Expense Method: 66 .6 183845.4 128462.6 183845.Single Window Services Cost required for tuition fees and living expenses for degree course today’s is Rs.3 192787.3 343637.1 171818.2 150073 160578.3 131079.per year & for Post Graduation is Rs.2 450438.7 157372.4 450438.44 104863.6 262159.1 171818.3 420970.2 240984.7 140255.2 551537.9 196715.7 343637.44 104863.1 120058.8 393430. 200000/Considering 7% inflation in education amount required will be Sr.3 481969 Umesh Amey Net req For Umesh For Amey EMI for Umesh EMI for Amey HE 202866 248520 4855 2533 GR PG Total of EMI 622724 355663 8041 2433 761121 932307 4372 3372 17.6 GR 100000 107000 114490 122504.3 481969 98003.5 PG 200000 214000 228980 245008.9 196715.8 590145.9 147076.2 270131.2 225219.5 289040.1 210485.5 137454.

we list out all the expenses that they projected they will incur when they retire. The amount of each expense is benchmarked at today’s price. The future pricing is found by taking inflation into consideration at 7 % per annum. All the figures are tabulated in the following table: Retirement Income .Projection by Expense Method Items needed when retired Food Clothing Cars maintenance Personal maintenance Medical Groceries Travel Utilities Life insurance Entertainment Medical Insurance House maintenance Total Today's annual cost 48000 20000 19000 24000 10000 12000 50000 60000 200000 30000 20000 12000 505000 Inflation rate 6% 7% 6% 7% 9% 7% 6% 5% 0% 7% 6% 5% Cost at age 60 137008 67598 54232 81118 47171 40559 142716 144397 200000 101397 57086 28879 2902161 The Expense Method is the more accurate method but relies quite heavily on the rate of inflation. 67 .Single Window Services From fact-finding discussion held with James.

100000 150000 200000 250000 50000 Retirement 0 Retirement 68 Fo C od ar C Pe s m lo rs on ain thin al te g n m ai anc nt en e an M ce ed G ic a ro ce l r ie s Tr av U el Li f e til i i n t ie En sur s an t M ed erta ce H ica inm ou l se Ins ent m ura ai nt nce en an ce Single Window Services .

Scenario 1: The principal intact scheme. we first select the annual retirement income calculated from the Expense Method at Rs 2902161/Then we work into two scenarios on the length of time this income is needed.e. The second scenario will be the “economy scheme”. this is the “deluxe scheme”. The Rs. we calculate the lump sum needed for such inflation-adjusted income generation. 69 . The amount looks very high.Single Window Services Finding the lump sum for retirement: To find the lump sum to generate this projected retirement income is sufficient. Here.to have this retirement income perpetually without liquidating any of the principal amounts. based on the inflation-adjusted discount rate I.annual retirement income is to be needed perpetually i. In layman terms. You need Rs 29021610/. 2902161/. indefinitely.

The annual retirement income is to be needed for a certain number of years only – normally to the end of the life span projected.8037 % PMT = 2902161 FV = 0 Mode = BGN (as retirement income is needed at the beginning of each year) PV = 59990371/Lump sum needed is about Rs.Single Window Services Scenario 2: Principal liquidation scheme. we calculate the lump sum needed for such inflation-adjusted income generation. 59990371/- 70 . we are taking a period of 30 years in which the lump sum accumulated at retirement will be used up together with the interest income generated to provide the per annum amount. I = 7 % Post-retirement rate of return in fixed income instruments.07 / 1 + 0. where n = 30 i = 2.8037 % Using financial calculator or table of values. r = 10 % We calculate the inflation-adjusted discount rate i = r – I / 1 + I = 0.07 = 2. based on the inflation adjusted rate of return i. Assumptions: Rate of inflation. Taking a life span of up to 80 years old + a safety margin of 10 years until age 90.10 – 0. Again here.

Funding the amount can come from 2 sources Current net assets Future cash flow surpluses All the sources fund the accumulation phase as tabulated below: Source Method Value 18 years From now.Single Window Services Funding the entire lump sum We now see if you can fund this amount within 18 years from now.(After New Insurance Coverage) Using calculator. at 11 % growth rate NOW – Current net assets From revised net worth statement Amount is Rs. N = 18 I = 11 % PV = Find FV M FUTURE a) Cash flow statement – revised with annual surplus of Rs. 2543792 16645437/(See Note 1 below) Using calculator. 275000/. 71 . as cars are not investment grade asset unless they are liquidated. N = 18 I = 11 % PMT = 275000/Mode = End Find FV TOTAL: (M + N) 13858882/- N 30504319/- Note: (1) The net value of cars is not taken into this figure.

so the options are: A higher post-retirement rate of return of higher than 10%. 72 .Single Window Services Our findings: Satish will have 16645437 + 13858882 = Rs. Satish requires Rs. 30504319/. this is not recommended. So. this does not meet Satish original objective and will be pursued only as a last resort. 66553950/. However. Actual amount is short to meet the requirement. Delay the retirement age from 60 to probably 63.to fund by the “economy scheme” method based on current situation. Satish has that much risk appetite hence we recommend the option (d) to adapt. Reducing the retirement income will meet the lower retirement lump sum. assets should be invested in very low risk or zero-risk assets.by the time he retire. Based on the risk profile questionnaire. During retirement years.

0 316.789.792/1.0 764.0 2. We will reallocate the mutual Fund amount to Direct Equity 73 .00% 8.950.Single Window Services Investment Planning To meet the desired retirement lump sum at age 60. Satish has a moderate risk appetite.0 1. the portfolio return rate is only 9.00% 4. based on the current portfolio.35% 0. As you have completed almost first 15 yrs in PPF and extended that account for next 5 yrs. in which you will have direct participation in equity market with professional advice.053.16% 9.543. 500000/-. Hence the Asset Allocation kept is: Asset Class Debt Equity Amount 1.03% As Equity portion has higher risk we suggest you to go for PMS activity.346.52% 1.50% 18. which will invest in equity. the portfolio investment rate of return used above is 12% for pre-retirement.346.000.000/% 47% 53% Rs 116.50% 15.00% 1.00% Portfolio return: Weighted Return Rate 0. However. You will be able to withdraw Rs.197. The portfolio needs to be restructured to the followings: Asset Saving Account Equities Life insurance Mutual funds PPF Total: The recommendations are: Based on the age and risk profile questionnaire.00% 12.48%.792 Return Rate 3.

However.0 73.00% 15.0 90.0 72. They are almost liquid as saving account.000.50% 8.00% 7.will be as below. such restructuring must meet the risk profile of you in which we have matched. 74 . But the yield is almost double than the saving.25% 0.00% 18.00% This will keep the asset allocation same as required We have added Debt Funds in your portfolio.00% Portfolio return: Weighted Return Rate 0.000.50% 9. 275000/. Asset Saving Account Time Deposits Equities Mutual funds Debt Funds PPF Total: Rs.000 Return Rate 3.000.Single Window Services The recommendations for Future Investment Every year the surplus investment of Rs.00% 4. If it does not.78% 3. the financial planner will need to discuss again with you again if they can arrive to some acceptable conclusions which include but not limited to. making some changes to your goals and objectives.000.45% 0.0 275.000.93% 2.58% 12. This restructured portfolio will give 12 % return in order to meet your accumulation goals.0 20. 20.

Single Window Services Restructured Existing Investment Portfolio 12% 0% Saving Account Equities 30% 53% Life insurance Mutual funds PPF 5% Future Investment Portfolio 7% 7% Saving Account 27% 33% Equities Mutual funds Debt Funds PPF 26% Asset Allocation Debt 47% 53% Equity 75 .

76 . it is recommended that all nominations must be properly done for all insurance policies and mutual funds. A will is recommended to be written to instruct the trustees to distribute all wealth to the beneficiaries as per the wishes of you should he be demised.Single Window Services Estate Planning The need for estate planning centers more on will writing. To ensure assets go to the right person(s). trust creation and estate distribution.

they will take good stocks and hold them for at least more than a year. 77 . Life Insurance policies itself takes care of tax rebate u/s 80 C As we have increased the Health Insurance premium you will be able to get full benefit u/s 80 D Frequent Churning of shares used to generate Short Term Capital Tax.Single Window Services Tax Planning Tax relief & rebates You are keen to maximize whatever relief and rebates you can get so that he can pay minimum taxes. You already have a taken a good care of Taxes You have full advantage of Home loan interest repayment. Now as per new recommendation your equity portfolio will be handled by professionals. Hence Short Term Capital Tax will be minimized.

48% to 12. Review the portfolio Who to do it Client Client Client Financial Planner Financial Planner Financial Planner Client Financial Planner Financial Planner + Client Financial Planner Financial Planner Financial Planner + Client Deadline 1 July 08 1 July 08 1 July 08 15 July 08 1 July 08 15 Sep 08 20 July 08 1 July 08 10 July 08 15 July 08 10 July 08 15 Dec 08 78 .Single Window Services Implementation/ Action Plan What Apply for loan from LIC Withdraw amount from PPF Withdraw the amount from Mutual Funds Invest the amount in Equity Apply for Loan against Securities Complete the LAS Repay the Personal Loan To prepare and complete a comprehensive insurance program for the entire family To review retirement planning goals and objectives To restructure the current asset portfolio from 9.0% To get a will written and nominations for others.

Single Window Services Appendix 1 Personal Data Area Birth date Sex Marital status Address Occupation Employer Income from employment Consultant Self Employed Rs. 165000/. 1352000/.per annum Umesh 19 Jan 1995 Male Single Same Nil Nil NA Amey 15 May 1998 Male Single Same Nil Nil NA 79 .per annum Satish 1 Sep 1965 Male Married Pushpa 27 Mar 1967 Female Married Same Consultant Self Employed Rs.

FD. Mutual fund advertisement not succeeds in creating awareness in the people.Single Window Services Chapter 4. Most of investor does not know that how Portfolio Generate profit. Mainly businessman & salaried person are more interested to do Financial Planning. Conclusion of the study • • • • • Most of people unaware about Financial Planning. People are more interested in investing in traditional Investment options like insurance. post. 80 .

81 .5 Recommendations and suggestions • • • • Co. should have to increase awareness in the customers. Create a new tools and techniques which will easy to understand for clients. which can educate customers about financial planning. Co. Make those ads. has to use effective Medias that can appeal to the masses.Single Window Services Chapter.

Deepak Kulkarni 1352000/- Last 3 Years Annual Income Year 2007-2008 1352000/Year 2006-2007 1217000/Year 2005-2006 1095000/What is the average annual increment rate? 10% Average annual taxes paid in the last 3 years? 180000/Are income tax withheld appropriately from your employment income? 82 Q Q Q . Personal legal Advisor Personal Accountant Personal Tax Advisor Insurance Agent Current Annual Income Mrs.Single Window Services QUESTIONNAIRE PERSONAL FACT FINDER Date: 28-june-08 Name: Address Satish Deshpande Phone No. Date of Birth Relation Spouse Child 1 Child 2 Education Background Occupation Employer Q. Sandip Deshmukh Mr. Godha Mr. Marital Status Occupation Self Employed Education Education Marrie d Consultant Consultant Brief summary of your working experience? Working as a Consultant from last 12 Yrs. Sandip Deshmukh Mr.E. MBA HusbandWifeSelf Employed Age 39 12 9 Fax No. Q Q Q Q Q Q 1-Sep-65 Name Pushpa Umesh Amey B.

Single Window Services N/A Q Q Q Q Q Q Q Are your income tax returns prepared by you or a professional accountant? Professional Accountant Do you file income tax jointly or separately with your spouse? Separately DO you have a personal retirement plan? No At what age do you want to retire? 60 What concerns you most about retirement? Monthly Income What does retirement mean to you? Involving in Social Work. upgrade or reduce your pre-retirement standard of living during retirement? Maintain pre-retirement standard after retirement Do you think your current retirement program provide adequately for your Retirement income needs? Don’t know Are you willing to lower your standard of living during retirement? No Do you have dependants you need to care for during retirement? No How much do you need now to maintain your current standard of living? Minimum Rs 350000/.without considering loan repayment What assets do you currently owned? Two Cars House Are any property individually owned by you or your spouse? Yes What other investments have you invest in? PPF. Shares. Mutual Funds What is your opinion on the following investment? 83 Q Q Q Q Q Q Q Q . Develop my personal hobbies Do you expect to maintain. Traveling.

Planning to expand the consultancy What percentage of retirement fund contributions is your company contributing? N/A What is your current retirement fund balance? N/A Have you made any withdrawals from retirement fund? No Do you plan to make any withdrawals in the future? No Q Q Q Q 84 .Single Window Services Stocks Properties Mutual Funds Fixed Income Others Q Q Q Q Q Q Q I like to take risk and the trading activity One is sufficient which I am not going to sell ant time They are good as an investment option Not really interested/Don’t want taxable income PPF is good Government scheme Company What existing benefits does your company provide as retirement benefits? N/A How do you foresee your future with this company? N/A Does the company have any retirement gratuity or death gratuity for employees? N/A Do you own any shares in the company? N/A What will happen to the shareholding upon death. disability or retirement? N/A What is your plan 5 years from now? My wife will stop working within next 3 yrs.

Single Window Services BIBLIOGRAPHY • • • • CFP Book’s (Certified Financial Planning) www.singlewindowservices.com www.com AMFI Course Book 85 .mutualfund.