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A Project Report On:

Need of financial advisors to maximize wealth of mutual fund investors as well as other financial investors

NOIDA A Project report submitted in partial fulfillment for the award of Post Graduate Diploma in Management.

ED
Singh

SUBMITT BY:
Sachin PGDM 2011

Roll No: 030511033

DECLARATION
I, Sachin Singh, a student of IIMT GURGAON hereby declare that the project entitled Need of financial advisors to maximize wealth of mutual fund investors as well as other financial investors is submitted in partial fulfillment of PGDM is my original work.

ACKNOWLEDGEMENT
I am very thankful and extremely indebted to Mr. Rahul Kant Chauhan(Sales Manager) NJ INDIA INVEST Pvt. Ltd. For their in valuable cooperation by guiding me throughout the two months helping to complete my project. I am very grateful to NJ INDIA INVEST Pvt. Ltd. for allowing me to do the project under their guidance. Last but not the least, I wish to acknowledge my deep felt gratitude to all my respondents for their cooperation which helped me to form the base for the project work. I also wish to acknowledge my sincere thanks to the entire concern faculty for their helpful guidance and suggestions.

EXECUTIVE SUMMARY:
As we all know that India is developing nation and people have a wealth but they are not much aware about their wealth maximization even they dont know how to secure their future. They especially invest in insurance products for a long period of time but they dont know that how much they can earn. So I am researching on this topic that financial advisor to maximize wealth of mutual fund investors. In this we can say that Today people didnt know that they can maximize wealth by investing in mutual funds. If market is not performing but mutual funds can achieve its best returns because people enters in the market when it is increasing and exits when it goes down.This makes a wrong perception in people mind. This report is all about that mutual fund investors need a advice of financial advisors if they want to maximize their wealth. Table of contents 1) Company profile 2) Objective of project 3) Topic description 4) Research method 5) Findings & Conclusions 6) Recommendations 7) Limitation 8) Referencing 9) Appendix

INTRODUCTION:
It is based on surat based company formatted in 1994.They have more than 125 branches which is spread in our nation. NJ shows the true love between two friends Neeraj Choksi & Jignesh Desai, these two partners are the owner of this organisation. This organisation tries to always leads the advisors & Financial advisors in our nation. NJ has a loaded understanding how and where to invest the investors money to get more and more returns. NJ also has a great experience in PMS (Portfolio management system) it was recognized in 2003 as NJ Fundz network.It works from Wealth advisory , AMC`s, Real estate Insurance broking training for financial advisors etc .More than 18000 advisors in country & 14 Lac customers exist in NJ.NJ more focuses in their training support to the partners because they are the tool by which NJ is doing business through them. NJ has adapted new tools when there is time to change and also diversified its platform to other various business like real estate and investing in Gold. NJ always believes in creation of wealth for the investors it may be for short or long period.It has its own 360 platform to their partners by which they can access all the accounts either of their own or investors or about NJ.NJ has a strong area of information in investment plans and a cut-edge tool by which all the work of office can be done by sitting at your home from your computer.

Vision and Mission Vision:

Creating Wealth Transforming Lives Customer fulfillment Client satisfaction

Mission:
NJ has builded a trustworthy relationship with their stakeholders, through improvement, assurance, innovation quality & service. NJ mission is to take their partners expectations as well as customer satisfaction.

MUTUAL FUNDS:

6 Mutual fund is a bucket in which the money is invested for a common goal of the investors .People invest in mutual fund to get high return by which they can fulfill their dreams or can be secure for their future. Some people may invest it again in some securities or in gold etc. In Todays era the investing in mutual fund is increasing very rapidly because it is not managed by any agent as well as it is managed by finance managers by the asset management companies. Today in the investment area the mutual fund is playing vital role by which money can be easily invested in different pool of different mutual fund companies and it is very easy for advisor to invest investors money in right company which is currently performing in the market because the investor didnt have enough time or knowledge to know that which company or product is performing good in the market or about market misbalance.

Concept of mutual fund

There is a regulatory, which regulates the mutual funds which is known as SEBI (Securities & Exchange Board of India).Anybody or any organization cant proceed Mutual Fund business in the market without authorization from the regulatory. SEBI has some parameters to provide the authorization, if it passes the given criteria then only business can be started. There are 44 Asset Management Companies which is working as a mutual fund companies and thousands of their products are surviving in the market in which you can easily invest your money through the help of the financial guide.

MUTUAL FUNDS IN INDIA:

It has started in 1963 with the arrangements with UTI. It was inventiveness of Indian govt and RBI. It was not much successful in his starting stage and has a low growth but after some time it has been seen unexpected growth in Indian mutual fund companies. It can be put in period of the growth year: Period from 1964-1987: UTI was recognized on 1963 by an act passed from parliament. It was formed by RBI & maintained underneath of the regulatory & also have a full control of RBI. After dismerge of UTI, IDBI(Industrial Bank of India) merged with this regulatory & also have a full control on it except RBI. Period from 1987-1993:During this period a lot of changes has entered in this market public sector banks have totally captured it with Life insurance company along with General insurance corporation ,State bank of India mutual companies, BOB Mutual fund etc.

Period from 1993-2003: During this period pvt. Sector funds have started it with
choices for the investors. During this stage a new regulatory made to regulate all the mutual fund companies known as SEBI. At the end of this session there were only 33 Asset management companies in the market.

OBJECTIVE OF PROJECT
To analyze the opinion of people regarding mutual fund To analyze what people feel about the services of financial advisors. To analyze why people need to invest money in mutual funds

TOPIC: I am choosing this topic because I think that the right investors are not more aware about the product directly through the advertisements and they didnt know about the market whether it is increasing it value in market or going down. I had did my S.I.P from NJ India Invest Pvt. Ltd. NJ is known for its substantial distribution network in Indian Fiscal Services. NJ works in B2B Model. It works from its business partners which are also known as advisors not from the investors. Financial advisers include all the products below one cover; they also have the talent to accomplish the needs of customer to get high return through various investment plans. Today there is lack of awareness about the financial advisers in our country. L.I.C is only a govt, company in India which is providing facilities like life cover, policies etc. But I think that for todays generation this is not enough for the lifestyles as we all know India is developing Nation and is also increasing wealth among the people as their lifestyle is getting changed but they didnt know where to invest their money except L.I.C, etc. Today financial planner is playing very significant role to invest to get high return for their investors. Most of the persons perception is that only insurance is the investment or a life cover to them but rather they dont know about the other investments or savings plans according to their constraints which can be very useful for them from their future prospectus. For eg: If a person wishes a big value of money after certain years, then he should have to invest either in mutual funds or in portfolio management etc. if he is aware of these services. So totally we can say that there is lack of awareness about the financial advisors to the investors. If any partner is associated with NJ, he have all the products related with investment like insurance, fixed deposits, portfolio management, gold business, real estate, all mutual funds etc.

LITERATURE REVIEW:
Only a professional money manager can manage on behalf of investors money through mutual fund .The manager invest in buying stock, bonds and different types of securities according to the market which have been established for funds. By putting money into any of the product(bond, securities, shares) u can get high return of your fund .Mutual fund is open ended asset, where at any time new investors can make a payment or invest at any time in the mutual funds. (Kalamajoo, 2006). In India, due to rapid increase in industrialization and development, there is a big opportunity and potential for financial product marketing. Mostly the people belong to middle or service class who normally spent their maximum time in works or services, a part from this they dont have proper

8 knowledge about mutual fund. Mostly people want to invest their money in safe investment like govt. insurance & fixed deposit which gives low and secured result in future. (Hemanth, 2011). In equity funds the returns are directly related to the performance of the stock markets.If stock market is doing good in such case you will get high return.It may be expected that little bit dividends or capital gains that our fund has earned but people expectations are always different on the profit or loss which would be come to known by funds portfolio. If stock prices are continuously dropping in the market then our shares price and units will definitely decline.If the stock value increases then the fund value of our shares or stock will increases. Mutual funds normally based on Capital Market and the return depends on Market circumstances. Due to some scam, people dont belief in private sector financial products and also due to universal market turn down, mutual funds not set good income: this is the a different reason that community dont believe in mutual fund. (Alberto, 2008) There are also many people that have mentality about investment in present time. It became very difficult to convince the people for investment in mutual funds. People who belong to Service & Business Class were come under Income tax, those people prefer tax saving fund. In Holocene epoch years, more and more Canadians have enthroned in mutual funds. Because mutual funds are widely useable, many people conceive that they are simple and low risk investments. Mutual fund is one of the best options for investment; an investor should know about the thing that all kind of mutual funds are low risk investments and simple. On the other hand the value of shares and funds will decreases depending on the current market value of the funds portfolio. (Stevens, 2012). Investors should empathize how he will be taxed on his mutual fund investment. In general, a mutual fund will disseminate enough income and capital gains each year so that the mutual fund itself will not have to pay any income tax. Because of that an investor is going to pay income tax on his receiving, unless he agree his investment in a Registered Retirement Savings Plan (RRSP) or other registered plan for which the fund is a specifying investment. If he holds his investment in a registered plan, he will mostly not be taxed on dispersions of income or capital gains, up to the date where distribution stays in that plan. Still, when he withdraws money or investments from the registered plan, it is taxed as income at his departing tax rate. When he deliver his mutual fund retentions he should report whatsoever capital gains. He may like to ask his tax adviser about the tax conditional relation of applying a mutual fund investment and he should read cautiously any tax information given by the mutual fund. (Hemanth, 2011).

RESEARCH REPORT Scope of the study:

The research was done in Delhi( Janak Puri, jhandewalan,( Noida)). I have choose randomly nearby cams,karvy,different Amcs ,Insurance office for need of financial advisors for MF investors

Data sources:

It is based on prime data. Secondary data is only used for references. It has been collected from different journals & NJ official websites.

Research Design:
I am using Descriptive design because the collected data are from all advisors from cams & karvy.In this we can use both data`s

Sampling Design:
I am choosing the advisors and the partners of NJ. Graphs and pictures are also used in it.

Elements: Males & Females Sampling Unit: adviser & Investors. Extent: NJ Office , cams and karvy. Time: 1st may to 30th june in 2012. Sampling Frame: I have individually met to the advisors of NJ and the direct advisors not
associated with NJ.

Sample Size: It should be up to 200.135 attempted all question & rest of 65 didnt invested
never in mutual fund

Data analytical:
Have you ever tried to invest in mutual fund market? Agree Disagree 40 10

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Here we can say that out of 50 people 40 are agreed or have tried investing policies in mutual funds. By this data we can analyze that more people have tried in mutual fund bt they are not more aware about this because they didnt seek advice from financial advisors .

What are the following reasons to not invest in this market? Lack of awareness about 20 these funds Have a faith in other funds 5 You are not satisfied with the returns Have no assurance on the advisors 16 9

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This graph shows that the people are aware about the mutual fund products that where to invest and at right time to invest and in which AMC.

In which criteria should u found you as an investor in M.F? Unaware 09 Limited Awareness Just not aware about other products of M.F. Awareness about M.F. 12 17 12

This graph is representing that 17 people are not aware about the mutual fund products by which they are not interested to invest in mutual fund.

12 What are the ways from where you can purchase your M.F?
14 8 23 5

Straight from the AMCs Mediators or Agents Broking Firm Different sources

This data shows that most of the people purchases the product of mutual funds from any broking firm without any advice from financial advisors.This is a key point to broking firm that they can easily invest their money in which broking firms get more revenue.

What attracts you more in Mutual fund? 10 23 07 10

Diversification Qualified managing Low risk & business cost To attain long term goal

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By analyzing this data we can say that qualified managing or advisors can be the best part of our life for maximization our wealth.

Are you consulting with your financial planner?

Yes No

32 18

14 This graph shows that 64% of people are seeking advice from the financial advisors.but also there is the need of financial advisors more in the market to know the invesrors about new investing policies.

Which expertise of the personal financial advisor is demanded most? Portfolio review & investment 22 recommendation Planning to achieve specific financial 15 goals 8 Managing assets in retirement Access to specialists in areas such as tax 5 planning

This data represents that 42% investments are done under the advisors but a big part of Indias people are not seeking advice from financial advisors by which they are not be able to create their wealth with best returns.

Why people are using continuously financial advisors?

A. Want to know better plans

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B. Didnt have enough time for all these 15 updates C. To know more and more on plans D. Have faith to get high returns 2 5

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This data shows that out of 50 person,28 of them are using advisors on regular basis because they want to know better plans in which they can easily invest their money .

Why people is not using financial advisor on regular basis?

Having awareness of products Advisors are too costly Less Trust Responsible advisor Manage on his own

4 23 5 18

16 This graph represents that 23 person out of 50 are not using the service of financial advisors because they are very costly and 18 thinks that they can manage their own funds in other products or in any insurance policies.

Finding & conclusions:

The survey conducted on 50 people in which 46% person is only availing the mutual fund service. There are more opportunities to both advisors as well as investors. Rest of 54% of the people told that the fees are very high of the advisors and some thinks that they are eligible to invest their funds. Most of the people think that they can choose by their own but they are aware of the services like mutual fund where he can get high returns. Most of the people valued that they didnt have enough time to get touch with the advisors. From my point of view people have to be very conscious about their money and have to invest in those plans only in which the percentage is high of getting more revenues except investing in insurance policies. If a person can take risk then definitely he can maximize his wealth easily. Today financial advisors are also charging nominal fees due to heavy competition in the market. So it is easy way to get touch with them and can invest in those plans in which they can maximize their wealth easily.

RECOMMENDATIONS:
After researching on my topic I have some my own opinion to investors as well as advisors. 1) People today need advisors to create their wealth maximization. There are so many agents who only invest your money in that pool where they can maximize their money. 2) People also ignore the financial advisors because the advisors didnt create awareness among them. People dont invest till he his fully influenced. 3) People need to invest in mutual fund, as in todays era mutual fund is the only that type of pool by which a person can maximize his wealth by a high return. 4) Even people dont know that what is mutual fund and how to invest it or what the benefits of it are. 5) The advisors can let to know the investors about more additional benefits as a tax benefit, various planning, balancing the wealth etc. These all benefits are only offered by financial advisors to the investors. 6) People feel about the advisors that they charge more fees except to charge a nominal fee. If the advisors have politeness in his nature and can try to convert more and more customers into mutual fund.

Limitation:
Time restriction Research has only conducted in Delhi & Noida.

17 Respondents were not interested to fill the questionnaire

Questionnaire:

Have you ever tried to invest in mutual fund market? Disagree [ ] (plz. attempt the next question)

Agree [ ]

What are the following reasons to not invest in this market? [ ] [ ] [ ] [ ]

Lack of awareness about these products Have faith in other funds You are not satisfied with the returns Have no assurance on the advisors

In which criteria should you found you as an investor in MF? [ ] [ ] [ ] [ ]

Unaware Limited awareness Just not aware about other products Aware about MF

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From where you purchase mutual funds?

Straight from the AMCs [ ] Broking firm [ ] Agents [ ] different sources [ ] What attracts you morein mutual funds? [ ]

Diversification Qualified managing [ ] Low risk and business cost [ ] To obtain long term goals [ ]

Are you consulting with your financial planner?

YES [ ]

NO [ ]

.which expertise of the personal financial advisor is demanded most?

Portfolio review & investment recommendation [ ] Planning to achieve specific financial goals [ ] Managing assets in retirement [ ] Access to specialist in areas such as tax planning [ ] Why people are using continuously financial advisors? Want to know better plans Didnt have enough time for all these updates To know more and more on plans Have faith to get high returns [ ] [ ] [ ] [ ]

Why people is not using financial advisor on regular basis? [ ]

Having awareness of products [ ] Advisors are too costly Less trust on advisors [ ] Manage on his own [ ]

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REFRENCING
Kalamajoo, (2006). Mutual Funds: A guide for investors, Information is an investors best tool. (online) (cited on 14th August, 2012). Alberto, (2008). Mutual Funds: What you needs to know. (online) (cited on 14th August, 2012), Available from www.albertasecurities.com. Stevens, P.S. , (2012). A Guide to understanding mutual funds: Investment Company Institute. (online) (cited on 14th August, 2012), Available on www.ici.org. Hemanth, (2ND May 2011). Report on need of financial advisors for mutual fund investors. (online) (cited on 14th August, 2012. Avaialble from <http://www.slideshare.net/hemanthcrpatna/a-project-report-on-need-of-financial-advisors-for-mutual-fund-investors-with-specialreference-to-karvy Need of financial advisors for mutual fund investors (online ) (citied on 24th July 2012 ) , Available from URL https://www.google.co.in/#hl=en&output=search&sclient=psyab&q=need+of+financial+advisors+for+mutual+fund+investors&oq=need&gs_l=hp.1.1.35i3 9l2j0l2.1231.1939.0.6560.4.4.0.0.0.0.175.656.0j4.4.0...0.0...1c.a2rkqooGeZc&pbx=1&bav=o n.2,or.r_gc.r_pw.r_qf.&fp=3ae49bcb89093865&biw=1366&bih=667

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www.bseindia.com , Share . Details Citied on July 5 , 2012 www.njindiainvest.com , Vision . Objective , Citied on July 10 , 2012 www.moneycontrol.com , Stock details Citied on July 15 , 2012