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SHRI RAMSWAROOP MEMORIAL GROUP OF PROFESSIONAL COLLEGES


LUCKNOW
A RESEARCH REPORT ON
"FINANCIAL PLANNING FOR AN INVESTOR"
IN KOTAK MAHINDRA BANK,
SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE AWARD OF
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
GAUTAM BUDDHA TECHNICAL UNIVERSITY, LUCKNOW
FOR THE SESSION
2011-13
Mrs. Un!r "#! $%&'n(! )*+ S%,,&"! -.-
M&ss./'n'n' 0''1 ,'2', D!!3"& r'&
411122500627
MBA 4II
n
2
ACKNOWLEDGEMENT.
It is common knowledge that a guide plays the role of light in a maze of
darkness.
I would like to thank, Kotak Mahindra Bank for having given me an opportunity
to undergo summer training in their company.
My deep-rooted respect and sincere gratitude to Mr. Amul harma !"egional
Manager# ,Mr.achin $aze !Branch Manager #, Mr.%inesh hendkar
!"elationship Manager-Business Banking# and Ms vandana yadav !facility
&uide# who in spite of their 'usy schedule listened to my pro'lems and
suggested prompt solutions.
(nce again, I would like to thank all the staff mem'ers and my friends
who during the course of my training helped me with my learning o')ectives.
I hope that I have 'een successful in my endeavour. %iscrepancies,
mistakes, if any, are solely mine.
DEEPTI RAI
MBA 4FINANCE7
PREFACE
Training constitutes an important part of a good practice Oriented
management course. According to the syllabus of MBA each student of
department has to go 6 week practical training in a commercial organiation
or industry. !o on partial ful"llment of this re#uirement$ % underwent this
training at 8)"!8 M'#&nr' -'n8. &ractical training is necessary to learn as to
how theoretical can be put to the practical uses. % went to the training
knowing fairly well some basic principal of management and it's allied out in
the books are meant for ideal situation of a concern. !o$ much of that$ at
time$ it seems as if they ha(e lost their identity during my short stay at the
organization, I had a proper visit in bank. The way in which I collected information regarding
our project
In"!r'("&)n 9&"# (%s"),!r
As I was working on customer welfare activities so I focused on that and gone through site visit
specially -'n8 s&"!: I "';8! ") (%s"),!r< HR 3!rs)n< 'n ();;!("! ,. &n*)r,'"&)n *r),
"#!r!.

)
Abstract:
.
*
This MBA +%,A,-. pro/ect report on +%,A,-%A0 &0A,%,1 +O2 A, %,3.!TO2 .%t takes
an overview of inancial !lanning helps you to give direction and meaning to your client"s financial
decisions. It allows him to understand how each financial decision affects other areas of finance #otak
$ahindra is one of India%s leading financial organizations, offering a wide range of financial services that
encompass every sphere of life. rom commercial banking, to stock broking, to mutual funds, to life
insurance, to investment banking, the group caters to the diverse financial needs of individuals and
corporates strengths and weaknesses and implications of financial plan and gives a detailed summation of
all recommendations the client"s in short and long term goals. This pro/ect describes about
the client"s current financial
4
TABLE OF CONTENTS
6
S.NO.
1.
2.
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3.
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6.
>.
5.
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).(
).*
?
@
10.
11
12.
13.
CONTENT
In"r)%("&)n )* ")3&(.
O-A!("&1! )* "#! S"%..
Title of the !roject.
+bjective of the ,tudy.
,cope of the ,tudy.

R!1&!9 )* ;&"!r'"%r!
C),3'n. 3r)*&;!
R!s!'r(# M!"#));)$..
Us! 'n -!n!*&" )* *&n'n(! 3;'nn&n$ 3r)(!ss
T#!)r!"&('; B'(8$r)%n.
Introductory -hapter.
!lanning !rocess.
ormation of .oals.
D'"' An';.s&s 'n Pr'("&('; R!3r!s!n"'"&)n )* "#! P;'n.
F&n&n$
C)n(;%s&)n.
S%$$!s"&)n 'n R!(),,!n'"&)n.
A33!n&B
B&-;&)$r'3#..
PAGE NO.
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INTRODUCTION
OF TOPIC
5
1.
The rapid growth of capital markets in India has opened up new investment avenues for
investors. #eeping this in mind the inancial Institutions provide number of services to its customer
with a wide spectrum of investment opportunities. In order to retain their customers they provide
them with special services besides traditional services.
The invention of new technology and services by financial institutions has given the
consumers a wide range of investment avenues to invest in. +ne of the special services brought out
by them is 4I5A5-IA6 !6A55I5. ,789I-7, which aims at identifying a persons financial
goals, evaluating e:isting resource and designing the financial strategies that help the person to
achieve those goals and enables him to earn ma:imum returns at minimum level of risk.
The stock markets have become attractive investment options for the common man. ;ut the
need is to be able to effectively and efficiently manage investments in order to keep ma:imum
returns with minimum risk.
inancial !lanning helps you to give direction and meaning to your clients financial decisions. It
allows him to understand how each financial decision affects other areas of finance. or e:ample,
buying a particular investment product may help your client to pay of his mortgage faster or may
delay his retirement significantly. ;y viewing each financial decision as a part of a whole, you may
help your client consider the long term and the short term effects on his life goals. <ou will help
them feel more secure and more adaptable to life changes, once they can measure that they are
moving closer to the realization of their goals.
In near future a proper financial planning is re=uired to invest money in all type of financial
product because there is good potential in market to invest.
The main objective of this project on FINANCIAL PLANNING is to review the real meaning of
inancial !lanning, its objectives, role, framework, responsibilities of inancial planner and the
study of various other issues related to Investment planning, Ta: planning, Asset allocation and
8etirement planning.
I am inclined to this topic, as it has given me actual knowledge of this service along with its
working and how the financial planner plans and manages the portfolio. $oreover, it has guided me
understand this so called comple: world of investment and financial planning and also increase my
knowledge to such e:tent. I hope it will prove beneficial to me in developing my further career.




OBCECTI/E OF THE
STUD0
6
7
2.
OBJECTIVE OF THE
STUDY
A. TITLE OF THE PROJECT
*+I,A,-IA. /.A,,I,& +(" A, I,$01("*
I, K(1AK MA2I,%"A BA,K,
B. OBJECTIVE OF THE STUDY
To take an overview of the client"s in short and long term goals.
To have the clients current financial strengths and weaknesses and implications of financial
plan.
To study the clients financial objectives anchored to current resources.
To give a detailed summation of all recommendations.
To suggest appropriate financial plan for mutually selected recommendations.
To also give comprehensive economic overview of the clients financial plan, supported by
financial statements.
To follow step>by>step implementation and monitoring plan.
18
C. SCOPE OF THE STUDY
!ersonal inancial !lanners are not just for wealthy people. 7very individual can benefit
from objective help to create, grow, accumulate and utilize wealth to fulfil ones personal goals,
family goals and other lifestyle objectives systematically without any an:iety. inancial planners
can guide individuals to achieve their ultimate aim of spending retired life peacefully without
compromising living standards. A ?ualified financial planner will provide advice on.
,ystematic ,avings
-ash low $anagement
@ebt $anagement
Assets Allocation for Investment
$anaging 8isk through Insurance !lanning
Ta: ,trategies to increase investible surplus
@istribute residual wealth through estate planning
inancial !lanning is a profession for people with good communication skills combined
with knowledge of how financial service industry works. As a inancial !lanner one could work for
a bank, insurance company, a brokerage house or have own practice. $ost important is to
understand that the suitability of products you are guiding people to purchase is based on their 8isk
Appetite, Age and Time rame of .oals and +bjectives. inancial !lanners need to update
themselves constantly on new products, services and ta: laws that might be good for their clients.
This is a field that re=uires a life time of continuing education. A Trusted inancial !lanner can play
an important role in peoples lives helping them to achieve dreams such as owning a home, seeing
their childrens education and enjoy an active retirement.

RE/IEW OF
LITERATURE
11
This project was undertaken to know what e:actly is the inancial !lanning, Aow it is carried out ,Bho
carries it out, Bhy it is carried out, Bhen it is carried out ,and the most important Bhat is the benefit of
carrying it out. ;elow my =uestion were answered.
;asically inancial !lanning is the process of meeting life goals through the proper management of your
finances. There is a need for financial planning because the financial situation in the country has changed in
the last few years, this has changed in such a manner that it will be difficult for one to maintain a decent
standard of living with the current means this re=uires financial planning and in addition there are also several
individual specific factor that has to be fulfilled. inancial planning provides direction and meaning to ones
financial decisions. The process involves gathering relevant financial information, setting life goals, e:amining
customer current financial status and then coming up with a plan for customer on how he can meet with his
goals.
The process that is followed by the #otak bank is the planner first discuss the general 8ecommendations with
the client informally, this allows the clients to indicate their preferences and opinions on the options that have
been designed. +nce the planner and the client agree on the recommendations, a concise written proposal is
prepared along these linesC
An overview of the clients short and long term goals.
The clients current financial strengths and weaknesses and implications of financial plan.
The clients financial objectives anchored to current resources.
A detailed summation of all recommendations.
The financial plan for mutually selected recommendations.
A comprehensive economic overview of the client s financial plan, supported by financial
statements.
A step>by>step implementation and monitoring plan.
12
1)
1*
PROFILE OF
THE
COMPANY
3.
O1!r1&!9
T#! K)"'8 M'#&nr' Gr)%3+-
#otak $ahindra is one of India%s leading financial organizations, offering a wide range of financial
services that encompass every sphere of life. rom commercial banking, to stock broking, to mutual
funds, to life insurance, to investment banking, the group caters to the diverse financial needs of
individuals and corporates.
The group has a net worth of over 8s. /,3&( crore and has a distribution network of branches,
franchisees, representative offices and satellite offices across cities and towns in India and offices in
5ew <ork, 6ondon, ,an rancisco, @ubai, $auritius and ,ingapore. The .roup services around /.&
million customer accounts.
14
H&s")r.+-
The #otak $ahindra .roup was born in '103 as #otak -apital $anagement inance 6imited. This
company was promoted by Dday #otak, ,idney A. A. !into and #otak E -ompany. Industrialists
Aarish $ahindra and Anand $ahindra took a stake in '10/, and that%s when the company changed
its name to #otak $ahindra inance 6imited.
,ince then it%s been a steady and confident journey to growth and success.
'10/
'10)
'112
'11'
'11&
'113
'11/
'110
#otak $ahindra inance 6imited starts the activity of ;ill @iscounting
#otak $ahindra inance 6imited enters the 6ease and Aire !urchase market
The Auto inance division is started
The Investment ;anking @ivision is started. Takes over I-+$, one of India%s largest
financial retail marketing networks
7nters the unds ,yndication sector
;rokerage and @istribution businesses incorporated into a separate company > #otak
,ecurities. Investment ;anking division incorporated into a separate company > #otak
$ahindra -apital -ompany
The Auto inance ;usiness is hived off into a separate company > #otak $ahindra !rime
6imited Fformerly known as #otak $ahindra !rimus 6imitedG. #otak $ahindra takes a
significant stake in ord -redit #otak $ahindra 6imited, for financing ord vehicles.
The launch of $atri: Information ,ervices 6imited marks the .roup%s entry into
information distribution.
7nters the mutual fund market with the launch of #otak $ahindra Asset $anagement
-ompany.
16
&222
&22'
&22(
&22*
&223
&22/
#otak $ahindra ties up with +ld $utual plc. for the 6ife Insurance business.
#otak ,ecurities launches its on>line broking site Fnow www.kotaksecurities.comG.
-ommencement of private e=uity activity through setting up of #otak $ahindra 9enture
-apital und.
$atri: sold to riday -orporation
6aunches Insurance ,ervices
#otak $ahindra inance 6td. converts to a commercial bank > the first Indian company
to do so.
6aunches India .rowth und, a private e=uity fund.
#otak .roup realigns joint venture in ord -reditH ;uys #otak $ahindra !rime
Fformerly known as #otak $ahindra !rimus 6imitedG and sells ord credit #otak
$ahindra.
6aunches a real estate fund
;ought the &3I stake held by .oldman ,achs in #otak $ahindra -apital -ompany and
#otak ,ecurities
O%r C)r3)r'"! I!n"&".
15
The Journey So Far:-
16
17
D In(;%!s &r!(" 'n &n&r!(" #);&n$s
st
Board of Directors: Susidiaries as on !" #arch $%%&
Sr' (o' (a)e of the Co)*any
Directors
Uday Kotak +C,
Falguni Nayar +#D,
Shanti Ekambaram
Dipak Gupta
Jaimin Bhatt
Uday Kotak +C,
. Jayaram
Narayan S.!. +#D,
Falguni Nayar
"ikram Sud
D.Kannan # E$%&uti'% Dir%&tor (
hi%)
*p%rating *))i&%r +
Uday Kotak +C,
Dipak Gupta
. Jayaram
handra,h%khar Sath%
1
-ota. #ahindra Ca*ita/
Co)*any
0i)ited
2 -ota. Securities
0i)ited
3
-ota. #ahindra 1ri)e 0i)ited
+for)er/y .no2n as -ota.
#ahindra
1ri)us 0i)ited,
28
Shanti Ekambaram
Jaimin Bhatt
-ohan Sh%noi
Uday Kotak
+C,
Gaurang Shah
+#D,
Shi'a.i Dam
Dipak
Gupta
/a,an !,kari
0
-ota. #ahindra O/d #utua/
0ife
Insurance 0i)ited
1aul
/anratty
"in%%t Nayyar
1alla'iShro))
S.S.
2hakur
1anka. D%,ai #3hol%4tim%
Dir%&tor+
!ndr%5 art5right 4 !lt. to 1aul
/anratty
Uday Kotak
+C,
6
-ota. #ahindra 3sset
#ana4e)ent
Co' 0i)ited
7..
Khanna
Sukant
K%lkar
21
. Jayaram
Narayan
S.!.
Bipin 7.
Shah
!mit D%,ai
+C,
handra,h%khar
Sath%
8 -ota. #ahindra Trustee Co)*any
0i)ited
Giri,h Shar%dalal
2u,har -a'ani
!nirudha Bar5%
Shail%,h /aribhakti +C,
K.-.Gh%rd
a
9
-ota. #ahindra Trusteeshi*
Ser5ices
0i)ited
handra,h%khar
Sath%
B%r.i, D%,ai
Shi'a.i Dam
"ikram Sud
Uday
Kotak
: -ota. Fore6 Bro.era4e
0i)ited
Dipak
Gupta
handra,h%khar
Sath%
22
Dipak Gupta
Jaimin Bhatt
Shanti Ekambaram
; -ota. #ahindra In5est)ents
0i)ited
7.
Sundarraman
.
Jayaram
Jaid%%p /an,ra.
!,hra) 7amtoola
7a'i <o&han
1ola
So5 -an !h =uk
Shing
<oui, Didi%r -%rl%
1> -ota. #ahindra +Internationa/,
0td'
!,hi,h Nanda
Som%r -a,,%y
Shyam Kumar Syama,undaran
"i,5anathan
"aradara.an
Bilal Sa,,a
!bhi,h%k Bhalotia
11 -ota. #ahindra +U-,
0i)ited
Shyam Kumar Syama,undaran
2)
"i,5anathan "aradara.an
1aul 1arambi
. Jayaram
/a,an !,kari
7u&hit 1uri
7a'i <o&han
1ola
"i,5anathan
"aradara.an
12 -ota. #ahindra
Inc'
Shyam Kumar
1aul 1arambi
.
Jayaram
!bdool !?i?%
*5a,il
So5 -an !h =uk
Shing
13
7/oa/ In5est)ent
O**ortunities
Fund 0td'
Shyam Kumar Syama,undaran
Didi%r -%rl%
7a'i <o&han
1ola
7iad !ubdool
2*
. Jayaram
Shanti Ekambaram
Jaimin Bhatt
10 -ota. In5est)ent 3d5isors
0i)ited
Falguni Nayar
S.
Srini5a,an
Nitin D%,hmukh
24
&b
bn
n
m
b0
.
RESEARCH
METHODOLOG0
6.
26
DEFINITION+
R!s!'r(# refers to 4a search for knowledge. It can be defined as a scientific and systematic
search for pertinent information on a specific topic.
8esearch comprises defining and redefining problems, formulating hypothesis or suggested
solutionsH collecting, organizing and evaluating dataH making deduction and reaching conclusionsH
and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis
> C;&**)r W)).
RESEARCH METHODOLOG0
It is a way to systematically solve the research problem. It may be understood as science of
studying how research is done scientifically. In it we study the various steps that are generally
adopted by the researcher in studying his research problem along with the logic behind them. In
general methodology is an optional framework within which the facts are placed so that the
meaning may be seen more clearly. The sources of data shown that designing of a research plan
calls for decision on the data sources are research approaches Fprimary and secondary dataG research
instruments Fobservation survey e:perimentG sampling plan and contact methods Fpersonal
interviewsG.
RESEARCH DESIGN
A research design is the determination and statement of the general research approach or strategy
adopted for the particular project. It is the heart of the planning. If the design adheres to the research
objectives, it will ensure that the client need will be served.
25
8esearch design is a plan structured and strategies of investigation. It is the arrangement of
condition and analysis of data in a manner to combine relevance to the research purpose with
economy in procedure.
In order to achieve the objective it was necessary to talk to the customers and public to
draws the conclusions regarding the objective.
or visiting the customers and publics to collect the relevant informationH a =uestionnaire
has to be designed. The =uestionnaire was designed in such a manner to achieve the
objective of the research.
The sample size taken is '22 customers and publics.
T0PE OF RESEARCH
In this project @escriptive 8esearch has been used.
D!s(r&3"&1! R!s!'r(#+
This is kind of research structure which is concerned with describing the characteristics of
the problem. In this way the main purpose of such a research design is to present a
descriptive picture about the marketing problem on the basis of actual facts. or this it is
important to obtain the complete and actual information about the subjects.
R!s!'r(# O-A!("&1!+
The inancial !lanning is vast in nature. It is intended to provide a birds>eye view of the clients
assets. The inancial planner has to have bottomless knowledge of markets, funds etc. -onsidering
this fact, the scope of the study is defined to satisfy following objectivesC
Dnderstand the necessity of financial planning,
,tudy and apply the financial planning process,
Identify various investment alternatives that can fit in client s profile, and
!rovide the client in an appropriate asset allocation mi: based on certain factors like time
horizon, risk tolerance etc.
26
This project consist of ?uantitative as well as ?ualitative data as data collect for preparing plan is
both the types
G'"#!r&n$ D'"'
There are two types of data to gather from the client
> ?uantitative
> ?ualitative.
Q%'n"&"'"&1! D'"'
?uantitative data provides specific information concerning a client along with numerical details
-oncerning hisJher financial status. It also provides the basis for the many financial analyses that the
financial !lanner needs to perform.
7:amples of =uantitative data include the followingC
.eneral family profile
5ames, addresses, and phone numbers of family members
Assets and liabilities
-ash inflows and outflows
Insurance policy information
7mployee benefit and pension plan information
Ta: returns for the last three years
@etails on current investments
8etirement benefits available
-lient>owned business information
-opies of wills and trusts
Q%';&"'"&1! D'"'
?ualitative information provides general information concerning a client%s goals, lifestyle, health
status, risk tolerance level, employment status, ho''ies, attitudes, and fears. Knowing a client3s specific
goals, such as planning to move when retiring at age fifty>five, funding a child%s college education and
e:penses, starting an e:pensive hobby just before retirement, or traveling e:tensively during retirement,
27
is important to the success of any financial plan.
7:amples of =ualitative data include the followingC
.oals and objectives
Aealth status of client and family members
Interests and hobbies
7:pectations about employment
8isk tolerance level
Anticipated changes in currentJfuture lifestyle
+ther planning assumptions.
D'"' S)%r(!s+
SECONDAR0 DATA+
The secondary data includes information obtained from various sources which includes
#otak $ahindra ;ank, ;ooks, ;usiness 5ewspapers, Bebsites, etc
Use and -!n!*&"s )* F&n'n(&'; P;'nn&n$
inancial !lanning helps you give direction and meaning to your client"s financial decisions. It
allows him to understand how each financial decision affects other areas of finance. or e:ample,
buying a particular investment product may help your client to pay off his mortgage faster or may
delay his retirement significantly
;y viewing each financial decision as a part of a whole, you may help your client consider the long term
and the short term effects on his life goals. <ou will help them feel more secure.
inancial !lanning is the process of identifying a person"s financial goals, evaluating e:isting resources
and
designing the financial strategies that help the person to achieve those goals.
!ersonal inancial !lanners are not just for wealthy people. 7very individual can benefit from
objective help to create, grow, accumulate and utilize wealth to fulfil one"s personal goals
)8
It give comprehensive economic overview of the client"s financial plan, supported by
inancial statements.
The main objective of this project on FINANCIAL PLANNING is to review the real meaning of
inancial !lanning, its objectives, role, framework, responsibilities of inancial planner and the
study of various other issues related to Investment planning, Ta: planning, Asset allocation and
8etirement planning
)1
)2
THEORITICAL
BACKGROUND
8.
In"r)%(")r. C#'3"!r+-
D!*&n&"&)n+
inancial !lanning is the process of identifying a persons financial goals, evaluating
e:isting resources and designing the financial strategies that help the person to achieve those goals.
Pr)(!ss )* F&n'n(&'; P;'nn&n$+ >
inancial planning is a highly personalized service. It is not a product. It is a cyclical
service that constantly repeats as client needs change over time. !reparation and implementation
of the financial plan is a long>term relationship and not a one>off e:ercise.
or the success of the financial planning e:ercise, it is essential that the prospective client
should have complete confidence in the financial planners capabilities. -onfidence is built when
the planner can demonstrate ade=uate knowledge, technical depth and complete dependability.
Also remember that financial planning is a two>way interaction between the client and the
planner. It is not and should not be treated as a one>way prescription which is to be given by the
planner to the client. ;oth the planner and the client have certain responsibilities to make the
e:ercise a success.
T#! P;'nn&n$ Pr)(!ss+-
The preparation of the financial plan is a multi>dimensional process. It re=uires the
planner to collect as much information as possible about the current resources, assets and
liabilities of the client. The planner needs to analyze the collected information from a number of
different aspects to develop an optimal financial plan. To prepare and implement a comprehensive
and effective financial plan, the inancial !lanning ,tandards
;oard recommends the following />step processC>
6et us look at the above steps in more detail.
))
1. Es"'-;&s# "#! C;&!n"-P;'nn!r R!;'"&)ns#&3
;efore approaching a client, it is important for the financial planner to clearly understand his own
role. The role of the financial planner is not to suggest get>rich>=uick schemes. 8ather, it is to
evaluate and study the clients% needs, gather and analyze data and prepare a financial plan for now
and for the future. !reparation and implementation of the financial plan is a long>term relationship
and not a one>off e:ercise.
A financial planner has to prepare a plan that helps his clientsC>
+rganize their finances
Improve their cash flows
6ower their personal income ta:es
!lan for their retirement
Improve their investment performance
6ower their investment risk
Insure themselves appropriately and reduce insurance costs
$inimize their estate settlement costs
To achieve this, the planner needs to answer the following =uestionsC
Bhat is the most immediate concern of the clientK
Bhat is the client s current financial situationK
Bhat are the client s immediate and long>term needsK
Bhat is the gap between the client s needs and the current financial situationK
Bhat services can you apply to the client s needsK
Aow would the client benefit from your service portfolioK
Bhat is the estimated time frame to complete the plan and accomplish goalsK
Is your role likely to be of an adviser, motivator, teacher, or directorK
C;&!n" '$r!!,!n"s 'n ()n*&!n"&';&". (;'%s!s
Bhen a client utilizes the services of a financial planner, heJshe shares financial and other
personal information with the planner that is normally not shared with anyone else. The client>planner
relationship presupposes a very high level of trust between the two parties. -onse=uently, the planner is
under obligation to maintain utmost confidentiality of this information. To prevent unnecessary litigation
and disputes in the future, it is recommended that the financial planner should enter into a client
)*
agreement which formalizes the relationship with the client and establishes the basis on which the service
would be provided. ,uch an agreement is also referred to as the %6etter of 7ngagement.%
2. G'"#!r (;&!n"Es '"' 'n !"!r,&n! $)';s 'n !B3!("'"&)ns
The ne:t step involves researching and collecting information that will help the financial planner
design and implement a successful financial plan. There are two aspects to this e:erciseC>
FaG Dnderstanding the client%s current financial position.
FbG .etting to know the client%s financial goals, objectives and re=uirements.
The first helps the financial planner understand where the client is at the moment and the second helps,
the financial planner understands where the client wishes to go.
F)r,%;'"&)n )* G)';s
inancial goals are the milestones that the client hopes to reach with the help of his financial
resources.
These milestones could be concerning different aspects of life likeC>
,aving for marriage J childbirth
;uying a new car J house J electronic e=uipment
-reating a corpus for retirement
-reating a corpus for children%s education
Ade=uately insuring self and family
-reating cash reserves for emergency usage etc.
The financial planner should ensure that the goals areC
,pecificH
8ealisticH
$easurable J ?uantifiable in money termsH and
To be achieved within a specific time period
+nce the client has stated clear, =uantifiable goals for financial planning, the ne:t step is to
rank those goals in order of importance. This is necessary because most clients do not have the
resources to fulfil all their goals. The financial planner must make it clear to the client that less
important goals must be sacrificed or postponed to achieve the more important ones.This done, the
)4
financial planner needs to work out the amount of money available for achieving these goals. To
achieve most financial goals, the client would need to start saving and investing appropriately.
Therefore it is important for the financial planner to know where the money to invest will be
coming from.
3. Analyze clients objectives, needs and current financial situation !reparation of the -lient%s !ersonal
inancial ,tatements !reparation of the -ash flow ,tatement and the ;udget !rioritizing .oals
The ne:t step is to prioritize the financial goals of the client and work out the amounts that are re=uired
to be invested towards achieving these goals.
E1';%'"! Q%';&"'"&1! F'(")rs
?ualitative factors have a significant bearing on the financial plan for a client. The client%s tolerance
towards risk, investment preferences, current health status etc. need to be kept in mind while evaluating
alternative ,trategies.
4. Devel! "!!#!#$"%e &%#"%e'$e& "() !#e&e(% %*e +$("(,$"l !l"(
A financial planner needs to develop appropriate strategies for the client in the following areasC
-ash flow management
Insurance planning
Investment planning
8etirement planning
Income ta: planning
7state planning
C's# *;)9 ,'n'$!,!n"
-ash flow management is the means for funding clients goals in other planning areas, thereforeH
generally it is the starting point of the planning process. +nce the cash flow management plan is in place,
the inflows have to be channeled in one of the three areas > e:penses, reserves for emergencies and
capital accumulation.
)6
D'&;.
EB3!ns!s
In(),!
Cash F/o2
#ana4e)ent
E,!r$!n(.
F%ns
C'3&"';
A((%,%;'"!
+nce your clients have planned to ma:imize income and minimize spending, they need the
planner%s help to plan for their insurance, investment, education, income ta:, retirement, and their
estate.
)5
Ass!ss&n$ .)%r (%rr!n" 9!';"#
5et worthC > <our assets are the things that you own. <ou probably own assets that have many
different forms, including cash, investments, personal property, real estate etc.
D!*&n&"&)n+-
<our net worth is the difference between the totals of your assets and liabilities. In other
words, if you sold all your assets for the values stated and paid off all your debts, the amount left
over would be your net worth. The net worth of a person is a measure of a persons financial
position as of the date of the personal balance sheet.
This relationship is shown belowC
I"!,s )* /';%! - A,)%n"s O9! F N!" W)r"#
)6
)7
@ATA A56A<,I, E
!8A-TI-A6
87!87,75TATI+5 +
TA7 !6A5
*8
9.
F&n'n(&'; 3;'nn&n$+-
F&n'n(&'; 3;'nn&n$ *)r T'r%n S#'r,'+-
A personal financial assessment is designed to help you evaluate your current financial position and
your ability to achieve your objectives for the future.
<our ability to maintain your lifestyle objectives for the future is determined by your investment capital and
ongoing income. In analyzing your situation we need to consider what is achievable given your current
position, and how we can take best advantage of the assets you have accumulated.
This report has been prepared to assist in the analysis of your current financial position and to help you
identify steps that you can take to achieve your personal financial goals and objectives. Although great care
has been taken to ensure the accuracy of this report, it should be kept in mind that projections, by
their very nature, are based on a variety of assumptions and as such it is likely that the actual results achieved
will be somewhat different than illustrated. or this reason it is very important that you review your strategy
on a regular basis to ensure its relevance to your changing financial position.
Mr. T'r%n S#'r,'
P!rs)n'; D!"'&;s
S!;*
5ameC $r. Tarun ,harma
@+;C &*>Lun>'1))H AgeC ('
7mployerC A;- ,olutions
AddressC *rth loor, @6 !hase &,
,ector &3, .urgaon
F',&;. M!,-!rs
N',!
,eema
#hushi
,imran
,anjay ,harma
R!;'"&)ns#&3
Bife
@aughter
@aughter
ather
D'"! 3r!3'r!+ MMLuly &221
S3)%s!
5ameC $rs. ,eema ,harma
@+;C &(rd Apr '1)0
AgeC (2
-ontact @etails
8esidential AddressC
'&(*, ,ushant 6ok '
!hone numberC
1111&&&'''J2'&*>*33'''
D'"! )* B&r"#
&(>Apr>'1)0
&(>+ct>&223
&*>Apr>&220
>
A$! 4.!'rs7
(2
(
' month
/0
D!3!n'n"
<
es
<
es
<
es
<
es
*1
F&n'n(&'; G)';s
The following table lists your individual goals in today%s value, when you e:pect to meet them
and the e:pected rate of inflation.
S"'r" En
0!'r 0!'r
D!s(r&3"&)n Fr!G%!n(.
8etirement goal > 6iving $onthly
7:penses
#hushi%s school
education goal
,imran%s school
education goal
#hushi%s college
education
,imran%s college
education
#hushi%s
professional
education
,imran%s
professional
education
#hushi%s marriage goal
,imran%s marriage goal
!rimary home
Annual
Annual
Annual
Annual
,ingle
,ingle
,ingle
,ingle
,ingle
G)';
4")'.Es 1';%!7
Rs.
(2,222
In*;'"&)n
r'"!
R!,'r8s
3I &2&) &23/
(2,222
(2,222
*0,222
*0,222
'2,22,222
'2,22,222
*,22,222
*,22,222
(2,22,222
'2I
'2I
'2I
'2I
'2I
'2I
3I
3I
3I
&221 &2&&
&2'( &2&/
&2&& &2&3
&2&/ &2&1
&2&/ &2&/
&2(2 &2(2
&2&0 &2&0
&2(& &2(&
&220 &220
9acation 7very &
years
&2,222 3I &221 &2*)
'3I will be
paid towards
down
payment of
the house
and
7very & years
03I will be
till your age
funded by
bank loan
)
2
*2
Ass%,3"&)nsC
'. 6ife e:pectancy for $r ,harma and $rs.
,harma is age 02.
&. 8etirement age of $r ,harma is 32 years.
(. An average annual inflation rate of 3I used
in the analysis.
*. ,avings account is e:pected to earn a (.3I
annual rate of return.
3. 6i=uid funds e:pected to earn an /I annual
rate of return.
/. @ebt funds are e:pected to earn an 0I
annual rate of return.
). 6arge cap e=uity funds are e:pected to earn
a '&I annual rate of return.
0. $id cap e=uity funds are e:pected to earn a
'* I annual rate of return.
1. 7ducation e:penses are e:pected to increase
at '2I per annum.
'2. ,alary income is e:pected to increase at
'2I per annum.
''. -urrent living e:penses are e:pected to
increase at '2I per annum.
0)%r R&s8 L!1!;
ollowing our discussions regarding
your investment objectives and the
completion of the risk profile
=uestionnaire, you are estimated to
have a
M)!r'"! Pr)*&;!.
*)
NET WORTH
A,)%n" Rs. - + T%"l
'&',222
2
121<000
2
&2/,201
/2,&/2
2
2
2>><3=@
Ass!"s
L&G%& Ass!"s
,avings account
6i=uid funds
T)"';
F&n'n(&'; Ass!"s
i:ed interest investments
$utual funds
@irect e=uity
-ash value of life insurance
policies
7mployee stock option plan F7,+!G
T)"';
T'n$&-;! Ass!"s
8eal estate
+ther assets Fe.g. Art, -oin and ,tamp
-ollectionsG
T)"';
P!rs)n'; Ass!"s
!rimary house
9acation home
-arJ9ehicle
Lewellery
+ther personal assets
T)"';
R!"&r!,!n" Ass!"s
!rovident fund
,uperannuation
.ratuity
!ublic provident fund
-ash value of pension plan
T)"';
T)"'; Ass!"s
L&'-&;&"&!s 'n N!" W)r"#
O%"s"'n&n$ L)'n
Aome loan
9ehicle loan
!ersonalJ-redit card loan
7ducation loan
T)"'; L&'-&;&"&!s
N!" W)r"#
4")"'; 'ss!"s-")"'; ;&'-&;&"&!s7
1?H
3@H
2
2
0
2
2
0H
2
0
0H
&22,222
2
2
'22,222
2
300<000
>?5<3=@
==H
100H
2
'10,)'&
'/(,)21
2
0H
2@H
2=H
0H
3>2<=21 63H
32=<@2? =5H
**
Pr)A!("! ('s# *;)9-
C's# F;)9
C%rr!n" A,)%n" 4Rs7
H )* ")"';
&n(),! Ann%'; M)n"#;.
R!(),,!n! A,)%n" 4Rs7
H )* ")"';
&n(),! Ann%'; M)n"#;. D!s(r&3"&)n
In(),!
S';'r.-F&B!4CTC7
,alary>9ariable
Income from
businessJprofession
!ension
8ental income
Investment income
+ther income
T)"'; In(),!
EB3!ns!s
L&1&n$ EB3!ns!s
Aousehold e:penses
Aouse rent
7ducation e:penses
T)"'; In(),!
100H
'2,22,220
2
2
2
2
2
2
10<00<00?
0(,((*
2
2
2
2
2
2
?3<33=
100H
'2,22,220
2
2
2
2
2
2
10<00<00?
0(,((*
2
2
2
2
2
2
?3<33=
=0H
*,2(,&22
2
2
=<03<200
((,/22
2
2
33<>00
=0H
*,2(,&22
2
2
=<03<200
((,/22
2
2
33<>00
6oan 7$I%s
Aome 6oan
9ehicle loan
!ersonal loanJ-redit card
T)"';
Ins%r'n(! Pr!,&%,s
6ife insurance
Aealth insurance
$otor insurance
AomeFcontentG insurance
AomeFbuildingG insurance
+ther insurance
T)"';
O"#!r EB3!ns!s
Travel and vacation
1@H
2
)/,'3&
','0,/3/
1<@=<?0?
2
/,(*/
1,000
1><23=
1@H
2
)/,'3&
','0,/3/
1<@=<?0?
2
/,(*/
1,000
1><23=
3H
&/,/*)
(,3)3
2
2
2
2
30<222
&,&&'
&10
2
2
2
2
2<61@
*1,0(1
(,3)3
2
2
2
2
63<=1=
*,'3(
&10
2
2
2
2
=<=61
2 2 2 2
*4
-harity
+thers
T)"';
C)n"r&-%"&)n ") E,!r$!n(.
F%n
T'B!s
,alary>i:ed
0H
2
2
0
2
2
0
0H
2
2
0
2
2
0
)3,0&& /,('1 )3,0&& /,('1
,alary>9ariable
Income from
businessJprofession
!ension
8ental income
+ther income
T)"';
EB(!ss4s#)r"'$!7-!*)r! s'1&n$s
S'1&n$s
-ontribution to 8etirement
assets
!Femployer%s contributionG
!Femployee%s contributionG
,uperannuation
.ratuity
!!
?H
2
2
2
2
2
56<?22
2
2
2
2
2
><31@
?H
2
2
2
2
2
56<?22
2
2
2
2
2
><31@
*I
*I
2I
&I
2I
*&,22'
*&,22'
2
'/,02'
2
(,322
(,322
2
',*22
2
*I
*I
2I
&I
2I
*&,22'
*&,22'
2
'/,02'
2
(,322
(,322
2
',*22
2
O"#!r C),,&""! S'1&n$s
7:cess FshortageGafter ,avings
&2I ',13,'3( '/,&/( ')I ',)',1/' '*,((2
Cr!'"! 'n ,'&n"'&n 'n '!G%'"! !,!r$!n(. *%n
<ou must ensure that you are ade=uately prepared for une:pected events in the short>term by creating an
emergency fund e=ual to three to si: months of living e:penses. This will enable you to pay for costs that
are not covered by insurance, as well as any kind of urgent e:penses.
<ou have 8s. '.&' lakh in your savings account. <ou are advised to maintain 8s. 32,222 Fappro:imately one
month of your e:pensesG as an emergency fund. Though one must keep at least (>/ months of living and
committed e:penses in emergency fund. Aowever, you have an immediate goal of house purchase in the
year &220.
<ou are advised to build and maintain an emergency fund gradually Fafter you have ac=uired the
immediate goal > home purchaseG to an e=uivalent amount of 8s. '.32 6akh over time.
*6
0)%r !,!r$!n(. *%n
C'"!$)r.
T)"';
Amount transferred from savings account to investment
portfolio
,avings account amount allocated to emergency fund
In1!s",!n" P;'nn&n$
C%rr!n" Ass!" A;;)('"&)n
A,)%n" &n
1<21<00
Rs.
)',22
0
32,22
2
2
Asset allocation is the cornerstone of good investing. 7ach investment included in your portfolio must be of an
overall asset allocation strategy and this plan must be genetic Fone>size>fits>allG,but rather must tailored to your
specific needs. ;ased on the information that have provided, the current asset allocation if your portfolio isC
Ass!" C;'ss
-ash
6i=uid funds
i:ed interest
instruments
7=uity
T)"';
A,)%n"
4Rs7
)',222
2
',22,222
&,//,(*1
=<35<3=@
H )* ")"';
'ss!"
'/.&(I
2.22I
&&.0)I
/2.12I
100.00H
3sset 3//ocation
Cash
0i8uid funds
Fi6ed interest
instru)ents
E8uity
EB3!("! P)r"*);&) R!"%rn + @.51H
Pr)3)s! Ass!" A;;)('"&)n
Asset allocation is the cornerstone of good investing. 7ach investment included in your portfolio must be part of
an overall asset allocation strategy and this plan must be genetic Fone>size>fits>allG,but rather must tailored to
your specific needs. ;ased on the information that have provided, the current asset allocation if your portfolio
isC
Ass!" C;'ss
6i=uid unds
i:ed interest
Instruments
6arge -ap 7=uity
$id -ap 7=uity
T)"';
H
3I
&3I
/3I
3I
100.00H
<i@uid Fund,
Fi$%d int%r%,t
An,trum%nt,
<arg% ap
E@uity
-id ap E@uity
EB3!("! P)r"*);&) R!"%rn + 10.?0H
*5
Pr)"!("&)n P;'nn&n$
The purpose of the protection planning section is to e:amine e:isting insurance coverage and make
recommendations. The goal is to determine whether there is ade=uate coverage andJor if any additional
coverage that may be needed.
L&*! Ins%r'n(!
O-s!r1'"&)n
-urrently you are covered by different life insurance policies worth sum assured of 8s. 0 laky by 6I-,
$a: 6ife and I5. 9yasa. <ou pay an annual premium of 8s. &/,/*) per annum. F,ee life insurance
details, Anne:ure 'G.
6ife insurance need analysis re=uires that we look at what would happen in the event of your death. This
analysis is done using information you provided to us about your income, e:penditure, assets and
insurance coverage.
Be have computed the insurance coverage re=uirement for you based on a scenario that all household
e:penses that will need to be incurred by your family and all other financial goals and liabilities are fully
met in the event of your death.
As per our analysis you are under>insured by 8s. ' crore. F,ee life insurance need analysis, Anne:ure &G
Ins%r'n(! N!!s /s C%rr!n" C)1!r'$!
"$%%%%%%
"%%%%%%%
9%%%%%%
:%%%%%%
;%%%%%%
$%%%%%%
%
*6
R!(),,!n'"&)n
<ou are advised to buy an additional term life policy worth 8s. ' crore. The annual estimated premium is
e:pected to be 8s.&/, '1& for a term of &2 years. F,ourceC A@- Term 6ife Insurance !olicyG.
H!';"# Ins%r'n(!
O-s!r1'"&)n
-urrently, you are not covered for health by any private health plan.
<ou must have ade=uate health insurance coverage especially because of rapidly rising health care costs. In
addition to the employer provided plan, it is strongly advisable to keep a private health plan. This is
especially useful if you change jobs. Also, health insurers do not accept pre>e:isting diseases.
R!(),,!n'"&)n
<ou must consider buying a family floater scheme worth sum assured 8s. ( 6akh. This will cover you, your
spouse and your child. The estimated annual premium is 8s. (,3)3. F,ourceC 8eliance Aealth ,ilver !lanG
P;'nn&n$ *)r G)';
O-s!r1'"&)n
<ou are planning to buy a new house of appro:imately 8s. (2 6akh in the year &220.
An';.s&s
;ased on your current situation, you can meet the above mentioned goal to the e:tent as mentioned belowC
A,)%n" &n Rs. 4&n ")'.Es 1';%!7
0!'r
!urchase of new house
R!(),,!n'"&)n+
7nd of &220
G)';
A,)%n"
4D!s&r!7
(2 6akh
G)'; A,)%n"
4A(#&!1'-;!7
(2 6akh
unding available towards your home purchase goal
'. @own payment of '3I of the value of home through the Investment !ortfolio
&. ;ank loan for funding the balance of 8s. &3.32 6akh.
'. @own payment of 8s. *.32 6akh through the Investment !ortfolio as followsC
,avings account > 8s. )',222 must be utilized
$utual funds > 8s. &.2) 6akh
,urplus of year &220 > 8s. '.)' 6akh
&. ;ank loan for funding the balance 8s. &3.32 6akh.
D!s(r&3"&)n
Annual Income
0!'r
&221>&2&(
Ann%'; Es"&,'"! EMI &n Rs.
(.2* 6akh
N)"!C !lease note that our analysis shows that in the year &221, the annual income surplus is not e:pected
to support the 7$I in the year &221 by 8s. 1/,222. Aowever, as you will get ta: benefits under section
&*FbG for the interest portion paid towards home loan, you will be able to meet the 7$I e:pense by the
$oney saved on ta:es.
*7
G)';+ K#%s#&Es E%('"&)n
O-s!r1'"&)n
<ou need to plan for the following education e:penses of #hushi%s in today%s value.
'. ,chool education of 8s. (2,222 per annum starting in the year &221 till the year &2&'. This is
e:pected to
.row at '2I per annum.
&. -ollege education e:penses of 8s. *2,222 per annum Fin today%s valueG between &2&& and &2&3.
(. !rofessional education e:pense of 8s. '2 6akh in today%s value in the year &2&/.
An';.s&s
;ased on your current situation, you can meet the above mentioned goal to the e:tent as mentioned belowC
A,)%n" &n Rs. 4&n *%"%r! 1';%!7
0!'r
,chool education
e:penses
-ollege education
e:penses
!rofessional education
e:pense
&221>&2&'
&2&&>&2&3
&2&/
G)'; A,)%n"
4D!s&r!7
8s. (2,222Jyear
8s. '.' croreJyear
8s. 33.31 lakh
G)'; A,)%n"
4A(#&!1'-;!7
8s. (2,222Jyear Fgrows at inflation
rate of
8s. '.' croreJyear Fgrows at
inflation rate
'2IG
8s. 33.31 lakh
of '2IG
R!(),,!n'"&)n
<ou should consider utilizing the following sources of cash to help you fund your goal as per our analysis.
'. 8egular annual income surplus to fund the school education > Be have treated the school and college
e:pense as a regular e:pense and deducted this from your cash flow every year. <our annual income
surplus during the years
&221>&2&3 is e:pected to support the education e:penses as mentioned above.
&. Investment from the Annual surplus in the recommended portfolio to fund college and
professional education e:penses
D!s(r&3"&)n
Investment from
annual surplus
0!'r A,)%n" ") -! &n1!s"! 4Rs.7
&2''>&2&3 '.*0 6akh
N)"!C The Investment is e:pected to be made in the recommended asset allocation which is e:pected to
generate
'2.02I per annum
48
O-s!r1'"&)n
<ou need to plan for the following education e:penses of #hushi%s in today%s value.
'. ,chool education of 8s. (2,222 per annum starting in the year &2'( till the year &2&3. This is
e:pected to grow at '2I per annum.
&. -ollege education e:penses of 8s. *2,222 per annum Fin today%s valueG between &2&/ and &2&1.
(. !rofessional education e:pense of 8s. '2 lakh in today%s value in the year &2(2.
An';.s&s
;ased on your current situation, you can meet the the above mentioned goal to the e:tent as mentioned
belowC
A,)%n" &n Rs. 4&n *%"%r! 1';%!7
0!'r
,chool education e:penses &2'(>&2&3
-ollege education e:penses &2&/>&2&1
!rofessional education
e:pense
R!(),,!n'"&)n
&2(2
G)'; A,)%n"
4D!s&r!7
8s. (2,222Jyear
8s. &.// 6akhJyear
8s. 0' 6akh
G)'; A,)%n"
4A(#&!1'-;!7
8s. (2,222Jyear Fgrows at inflation
rate of '2IG
8s. &.// 6akhJyear Fgrows at
inflation rate of '2IG
8s. 0' 6akh
<ou should consider utilizing the following sources of cash to help you fund your goal as per our analysis.
'. 8egular annual income surplus to fund the school education > Be have treated the school and college
e:pense as a regular e:pense and deducted this from your cash flow every year. <our annual income
surplus during the years
&2'(>&2&3 is e:pected to support the education e:penses as mentioned above.
&. Investment from the Annual surplus in the recommended portfolio to fund college and
professional
education e:penses
D!s(r&3"&)n
Investment from
surplus
0!'r
&2'2
&2''
&2'&
&2'(
&2'*>&2&)
A,)%n" ") -! &n1!s"! 4Rs.7
00,)0& annual
*(,1(1
'.&* lakh
'.2/ lakh
'.30 lakh
N)"!C The Investment is e:pected to be made in the recommended asset allocation which is e:pected
to generate
'2.02I per annum
41
O-s!r1'"&)n
#hushi%s is e:pected to get married in &2&0. <ou need to plan for the following e:penses in today%s value.
'. $arriage e:penses of 8s. * lakh Ftoday%s valueG in the year &2&0.
An';.s&s
;ased on your current situation, you can meet the above mentioned goal to the e:tent as mentioned belowC
A,)%n" &n Rs. 4&n *%"%r! 1';%!7
0!'r
$arriage e:penses &2&0
G)'; A,)%n"
4D!s&r!7
8s. '2./' lakh
G)'; A,)%n"
4A(#&!1'-;!7
8s. '2./' lakh
R!(),,!n'"&)n
<ou should consider utilizing the following sources of cash to help you fund your goal as per our analysis.
1. R!$%;'r 'nn%'; s%r3;%s
D!s(r&3"&)n
Annual Income ,urplus
0!'r
&2'3>&2&)
A,)%n" ") -! &n1!s"!
4Rs.7
(),2(3
N)"!C The Investment is e:pected to be made in the recommended asset allocation which is e:pected
to generate
'2.02I per annum
O-s!r1'"&)n
<ou need to plan for following e:penses in today%s valueC
'. @omestic > <ou wish to spend 8s. &2,222 on vacation every & year.
An';.s&s
A,)%n" &n Rs. 4&n ")'.Es 1';%!7
D!s(r&3"&)n 0!'r
@omestic &221>&2*)
Es"&,'"! A,)%n"
4D!s&r!7
&2,222
In*;'"&)n r'"!
4Ass%,!7
3I
G)'; A,)%n"
4A(#&!1'-;!7
&2,222
42
R!(),,!n'"&)n
In our analysis, we have taken the above e:pense as an annual regular e:pense and your cash flow is
supporting this
e:pense from your annual income surpluses from &221>&2*).
O-s!r1'"&)n
The probable year for your e:pected 2n
e:penses in today%s value.
child to get married is &2(&. <ou need to plan for the following
'. $arriage e:penses of 8s. * 6akh Ftoday%s valueG in the year &2(&.
An';.s&s
;ased on your current situation, you can meet the above mentioned goal to the e:tent as mentioned belowC
A,)%n" &n Rs. 4&n *%"%r! 1';%!7
0!'r
$arriage e:penses on &2(&
G)'; A,)%n"
4D!s&r!7
8s. '&.12 6akh
G)'; A,)%n"
4A(#&!1'-;!7
8s. '&.12 6akh
<ou should consider utilizing the following sources of cash to help you fund your goal as per our analysis.
1 R!$%;'r 'nn%'; s%r3;%s
D!s(r&3"&)n
Annual Income ,urplus
0!'r
&2'*>&2('
A,)%n" ") -! &n1!s"!
4Rs.7
&/,/(2
5oteC The Investment is e:pected to be made in the recommended asset allocation which is e:pected to
generate '2.02I per annum
O-s!r1'"&)n
<ou intend to retire at age 32. After retirement you need to plan for the following e:penses in today%s value.
'. Annual household e:penses of 8s. (./2 6akh in today%s value between &2&)Fyour retirement yearG
and &23/ Flife e:pectancyG.
4)
An';.s&s
;ased on your current and projected financial situation you cannot meet the above mentioned goals due to
retirement at age 32.
A,)%n" &n Rs. 4&n ")'.Es 1';%!7
0!'r
Annual household
e:penses
&2&)>&23/
G)'; A,)%n"
4D!s&r!7
8s. (./2 6akhJyear
G)'; A,)%n"
4A(#&!1'-;!7
8s. (./2 lakhJyear
A,)%n" &n Rs. 4&n *%"%r! 1';%!7
0!'r
Annual household
e:penses
&2&)>&23/
G)'; A,)%n"
4D!s&r!7
8s. 1.33 lakh per annum
G)'; A,)%n"
4A(#&!1'-;!7
8s. 1.33 lakh per annum
5oteC <ou are contributing every month 8s. (,322 towards to !rovident und and 8s. ',*22 per month
towards .ratuity. In our analysis, e:pected growth rate of ! and .ratuity is 0I per annum. Also there is a
contribution from your employer of 8s. (,322 per month towards your !rovident und account.
R!(),,!n'"&)n
<ou should consider utilizing the following sources of cash to fund your retirement goal as per
our analysisC
'. 8etiral assets
&. Insurance maturity proceeds
(. Annual income surplus to be invested in recommended asset allocation
'. 8etiral assets
D!s(r&3"&)n
!rovident fund and
.ratuity fund
0!'r
&2&)
Es"&,'"! '((%,%;'"! ',)%n"
3&.*& lakh
4*
&. Insurance maturity proceeds
D!s(r&3"&)n
6I- Leevan Anand
M'"%r&". 0!'r
&2&1
Es"&,'"! ,'"%r&".
3r)(!!s
3 lakh
5oteC Be have not taken the non>guaranteed portion i.e. bonus, we have only taken the
guaranteed part.
(. Annual income surplus to be invested in recommended asset allocation to fund the balance of
retirement goalC
D!s(r&3"&)n
Annual income surplus
0!'r
&2'*
&2'3
&2'/
&2')
&2'0
&2'1
&2&2
&2&'
&2&&
&2&(
&2&*
&2&3
&2&/
&2&)
A,)%n" ") -! &n1!s"!
'2,1)2
4Rs.7
'&,1)&
''),)&3
'/),/')
&12,/*)
(3(,1*)
*10,)'2
3)0,3(*
/)2,*/(
)/&,)*2
',&13,/&/
',*'',&20
',1)2,)20
'),/0,11'
N)"!C All the above surpluses have been allocated towards your retirement goal, this is done after
funding the other
goals such as #hushi%s marriage, education, etc.
44
NEIT STEPS
G)';JN!!s
L&*! Ins%r'n(!
H!';"# Ins%r'n(!
R!(),,!n'"&)n *)r
!B&s"&n$ &n1!s",!n"
R!(),,!n'"&)n *)r
(%rr!n" 'nn%'; s%r3;%s -
0!'r 200?
Es"'"! P;'nn&n$
C'r $)';
N!B"S"!3
<ou are advised to buy an additional term life insurance policy worth 8s.
' crore. The annual estimated premium is e:pected to be 8s. &(,'1& for a
term of &2 years. F,ourceC A@- Term 6ife Insurance !olicyG.
<ou must consider buying a family floater scheme worth sum assured 8s.
( 6akh. This will cover you, your spouse and your child. The estimated
annual premium is 8s. (,3)3. F,ourceC 8eliance Aealth ,ilver !lanG
S'1&n$s '(()%n" ") -! %s! *)r ,'&n"'&n&n$ 'n !,!r$!n(. *%n
-urrent savings account balance is 8s. '.&' lakh. <ou need to maintain
an emergency fund of 8s. 32,222 where the money is easily accessible
and li=uid to meet any unforeseen contingencies. ;alance must be
utilized towards the home goal.
F&B! &n"!r!s" &n1!s",!n"s+
8etain the !! till its maturity date. Then, invest the maturity proceeds in
the recommended portfolio. Be have allocated this investment towards
your retirement goal.
M%"%'; *%ns+
<ou may li=uidate this and fund the down payment of the home goal in the
year &220. If you are not li=uidating this then you have to arrange
additional source of fund for the down payment of the house goal.
-urrent annual surplus for year &220 is e:pected to be appro:. 8s. '.)'
6akh. This amount is e:pected to be directed towards the down payment of
the home goal. <ou must invest the monthly surplus for the ne:t / months in
capital preservation funds as this is needed for down payment within /
months.
Be recommend that you must consider writing a Bill within the ne:t ' year.
<ou are advised to avail the car lease option provided by your company
for a new car. <ou are having a car loan liability as of now. <our
8elationship $anager will discuss about the car lease facility in detail
vis>a>vis your e:isting car loan liability.
46
3nne6ure "
L&*! Ass%r!
@ate of ;irth
T'r%n
S#'r,'
&*th Lune ))
S%, Ass%r!
4G%'r'n"!!7
1,32,222
Ann%';
Pr!,&%,
&/,/*)
C),3'n.
N',!
Ins%r!r
T.3!
6I->Leevan
Anand
!lan '*1
$AN
P);&(. N)
Tarun
,harma
&*'&/02&)
Tarun
,harma
T!r,
Pr!,&%
,
P'.&n$
T!r,
0!'r )*
C),,!n(!
,!n"
S%,
Ass%r!
Ann%';
Pr!,&%,
0!'r )*
M'"%r&".
4G%'r'n"
!!7
M)! )*
P'.,!n"
R!,'r8s
&
&3
/3
&22*
&2&1
&22(
3,22,222
Bhole 6ife
I5. 9yasa
&(*&3/1)&
Tarun
,harma
/3
'2
&2/0
&223
(,22,22
&2,3')
Annual
!remium
/,'(2
8s. (,2/3 paid
semi
annually
*,(22
D6I! ''&3/103 '2 &2'3 ',32,222 Annually
<ou have
discontinued
this policy,
still sum
assured
continues
45
3nne6ure $B
A
Aouse 8ent
7ducation
B
9acation
-harityJ.ift
+thers
C
Aome 6oans
9ehicle 6oan
Your Insurance (eed 3na/ysis
S%r1&1)rEs L&1&n$ EB3!ns!s
13,'1,0)3
2
2
O"#!r EB3!ns!s
2
2
2
O%"s"'n&n$ D!-" ") -! P'& )**
!ersonal 6oansJ-redit -ards
2
',10,)21
',/(,)21
D Pr)"!("&)n *)r G)';s
AouseJ6and !urchase
Lewellery and Arts
!urchase of -ar
7ducation
$arriage
+ther goals
T)"'; F%ns N!!! ") ()1!r EB3!ns!s< L&'-&;&"&!s 'n G)';s 4AKBKCKD7
Ass!"s C%rr!n";. A1'&;'-;! ") S%33)r" F',&;.
,avings account
6i=uid Assets
inancial Assets
i:ed interest investments
$utual funds
@irect 7=uity
7mployee stock option planF7,+!G
Tangible Assets
8eal estate
+ther assets Fe.g. Art, -oin and ,tamp -ollectionG
8etirement Assets
!rovident und
,uperannuation
.ratuity
!ublic !rovident und
E
F
2
2
2
&2,22,222
2
2
','0,0&,&1/
',&',222
2
2
&,2/,201
/2,&/2
2
2
&,22,222
2
/,0),(*1
FINDING
46
ollowing are the findings that have emerged out of the feed back collected
through ?uestionnaireC
Most customers want to take ad(ice from "nancial ad(isor
-ustomer ha(ing knowledge about capital market
Most customers interested in go(ernment securities and want to en/oy
with di(idend
-ostumers not want in(est money for long term
,ormal customer in(est little amount of their salary in market but any
institution in(ested more money in market
-ustomer more prefer to in(est in market from own deposit not from
barrowing
-ustomers make their port folio with high return and high in(estments

47
68
CONCLUSION
61
:.
CO(C0USIO(
The overall study about each and every aspect of this topic shows that inancial !lanning is a
dynamic and fle:ible concept which involves regular and systematic analysis, proper management,
judgment, and actions.
It can also be concluded that client or Investors should start planning soon, set measurable
goals, 6ook at the bigger picture and should not e:pect unrealistic returns on the investments and value
of the plan lies in its implementation and it accurately reflects what you are personally trying to
accomplish.
It can also be concluded that with the combination of different stocks we can reduce the risk
and increase the returns of a portfolio. . ;y constructing portfolio we can only minimize the un>
systematic risk we cannot reduce systematic risk.
A proper undamental E Technical Analysis should be done before selecting any particular
stock for the portfolio. It minimizes the risk involved .
inancial !lanning ,ervice which was not so popular earlier as other services has gained lot of
importance and popularity E will gain more importance in future as people are now understanding the
importance of it.
inancial planning service is very important and effective investment tool for meeting your life
goals through the proper management of your finances.
LIMITATIONS+
'. The project work is mainly based on the above mentioned sources of information.
&. 6imitation of client in investing in particular kind of asset based on his age.
(. It is lot time to identify assets of customer
*. !lanner must have deep knowledge about market trends
3. it is broad process to identify customer financial status and their recommendation
62
6)
6*
SUGGESTIONS
L
RECOMMENDATIONS
;.
SUGGESTIONS L
RECOMMENDATIONS
T) "#! C;&!n"+
The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.
Investors should be made to realize that ignorance is no longer a bliss and what they are losing by
delay in planning.


,et measurable goalsC
,et measurable goals that you want to achieve with a specific time. or e:ample
Bhat should be your lifestyle after retirement, or that to send children to good
,chools
,tart planning soonC
@elay in financial planning affects the whole big picture that he has in mind for
himself and his family. @eveloping good habits like saving, budgeting, investing and regularly
reviewing finances early in life, makes one better prepared to meet changes and handle
emergencies.
;e realistic in terms of e:pectationsC
inancial planning is a commonsensical approach to managing finances to reach life goals. It is
a lifelong process. There are certain e:traneous factors like inflation, changes in
macroeconomic policies or interest rates that may affect financial results.
Dnderstand the effect of each financial decisionC
To realize that each financial decision that is taken affect several areas of his life.
T) T#! P;'nn!r+


The planner should target for more and more young investors. <oung investors as well as
persons at the height of their career would like to go for advisors due to lack of e:pertise and
time.
The planner should try to highlight some of the value added benefits, such as ta: benefits,
systematic transfer plan, etc. Investors could also try to increase the spectrum of services
+ffered.
The most important reason for not availing the serves of planner was spotted to be e:pensive.
The planner should try to charge a nominal fee at the beginning. ;ut if no then they could go
for offering more services and benefits at the e:isting rate.
64
BIBLIOGRAPH0
I. BOOKS REFERED+
BOOK NAME
1. ;odie, #ane E $arcus F&22*3G ,ecurity Analysis E !ortfolio $anagement, 5ew
Delhi; Prentice Hall of India Limited.
2. &. I.$ !andey F&22/G inancial $anagement New Delhi: Tata MacDraw Hill
Publishin !om"an#.
2. NEWSPAPER REFERED+
1. 7conomic Times and
&. inancial 7:press.
66
.. III. WEBSITES USED+
www.e=uitymaster.com
www.cmlinks.com
www.nse.com
www.nyme:.com
www.netashare.com
www.kotak.com
www.investopedia.com
www.esnips.com
. NEWSPAPER REFERED+
'. 7conomic Times and
&. inancial 7:press.
65
66
A33!n&B
1>.
311E(DI<'
?uestionnaire followed by the #otak bank to identify investors investment objectives and risk profile.
-ustomer 5ameC OOOOOOOOOOOOOOOOOOOOOOOOOOO
Investment AdvisorC OOOOOOOOOOOOOOOOOOOOOOOOOOO
An important aspect of investment planning and analysis is to ensure that our clients
money is invested in a manner that reflects the individual attitudes and personal circumstances.
In order to achieve this we need a clear understanding of what your Prisk profileP is. Bhen
we refer to risk, we mean how much an investment is likely to go up or down in the short>term. To
achieve higher long>term returns, you have to be prepared to accept that the value of your
investment may fall significantly in the short>term. This is because investments that provide higher
returns are usually more volatile than those producing low returns. There is a trade>off between risk
and return.
<our risk profile will be affected by a number of factors includingC
Investment e:perience
Time>frame
!rofessional management
Ta: effectiveness
Income re=uirements
-ompleting the following =uestions will help us understand the individual attitude to investing.
This will enable us to recommend investments appropriate to your specific needs.
1. W#&(# -!s" !s(r&-!s #)9 .)% 8!!3 %3 9&"# *&n'n(&'; 'n &n1!s",!n" ,'""!rsM
a. I dont.
b. I take notice of the financial report in the news or on television shows.
c. I read the investment section in the newspaper.
67
d. I read the B,L more than three days a week.
e. I subscribe to several financial journalsJinvestment magazines and read the
financial press each day.
2. H)9 *',&;&'r 'r! .)% 9&"# "#! ('3&"'; 'n &n1!s",!n" ,'r8!"sM
a. 9ery little understanding or interest.
b. 5ot very familiar.
c. Aave enough e:perience to understanding the importance of diversification.
d. Dnderstand that markets may fluctuate and that different market sectors offer
different income, value and ta:ation characteristics.
e. Dnderstand all investment sectors, the risks, and understand the various factors
which may influence performance.
3. W#&(# )n! )* "#! *);;)9&n$ -!s" !s(r&-!s #)9 9!;; .)% *!!; .)% 'r! '-;! ") ,'n'$!
.)%r 9'. "#r)%$# "#! (),3;!B&"&!s )* &n1!s",!n"sM
a. I definitely need the help of a professional investment adviser.
b. I need a professional investment adviser to help me make decisions on investments.
c. I know what I want to do, but would prefer to have a professional investment adviser
to work with me in tailoring my investment plan and making the right decisions.
d. I prefer to make all investment decisions on my own.
=.F)r #)9 ;)n$ 9)%; .)% !B3!(" ,)s" )* .)%r ,)n!. ") -! &n1!s"! -!*)r! .)% 9)%; n!! ")
'((!ss &"M
a. 6ess than & years.
b. ;etween & > ( years.
c. ;etween ( > 3 years.
d. ;etween 3 > ) years.
e. 6onger than ) years.
6 W#'" &s .)%r (%rr!n" &n(),! r!G%&r!,!n" 4&1&!ns 3;%s &n"!r!s"7 *r), .)%r &n1!s",!n"sM
a. 6ess than or e=ual to &I.
b. .reater than &I, but less than or e=ual to *I.
c. .reater than *I, but less than or e=ual to /I.
58
d. .reater than /I.
>. W#&(# &n1!s",!n" -';'n(! ) .)% *!!; ,)s" (),*)r"'-;! 9&"#M
a. 6ess than or e=ual to &I.
b. .reater than &I, but less than or e=ual to *I.
c. .reater than *I, but less than or e=ual to /I.
d. .reater than /I.
5. O"#!r "#'n .)%r )9n #),!< #)9 ) .)% *!!; '-)%" -)rr)9&n$ ") &n1!s"M
a. Bould not do.
b. 9ery uncomfortable.
c. -omfortable.
d. 9ery comfortable.
?. C)ns&!r&n$ "#! 'nn%'; r!"%rns )* "#! s&B #.3)"#!"&('; &n1!s",!n" 3;'ns -!;)9 )1!r "#!
;'s" "!n .!'rs. B's! )n "#! r'n$! )* 3)ss&-;! )%"(),!s s#)9n< 9#&(# 3;'n 9)%; -! ,)s"
'((!3"'-;! ") .)% )r -!s" s%&" .)%r &n1!s",!n" 3#&;)s)3#.M
a. Average annualized returnC *I, ;est caseC 3I, Borst caseC &I.
b. Average annualized returnC /I, ;est caseC 1I, Borst caseC >&I.
c. Average annualized returnC 0I, ;est caseC '&I, Borst caseC >3I.
d. Average annualized returnC '2I, ;est caseC '3I, Borst caseC >0I.
e. Average annualized returnC '&I, ;est caseC '0I, Borst caseC >'2I.
f. Average annualized returnC '*I, ;est caseC &*I, Borst caseC >'&I.
1. A ".3&('; &n1!s",!n" 3)r"*);&) ()ns&s"s )* -)"# &n1!s",!n"s 9&"# #&$# !B3!("! r!"%rns 'n
#&$# r&s8 4&.!.< s")(8< )3"&)ns< !r&1'"&1!s< 3r)3!r".7 'n "#)s! 9&"# ;)9 !B3!("! r!"%rns
'n ;)9 r&s8 4&.!.< ('s#< ,)n!. ,'r8!"< *&B! &n(),!7. W#&(# )* "#! *);;)9&n$ s3r!' )*
&n1!s",!n"s 9)%; .)% *!!; (),*)r"'-;! &n1!s"&n$ &"M
a. 2I Aigh 8iskJAigh 8eturn, '22I 6ow 8iskJ6ow 8eturn.
b. (2I Aigh 8iskJAigh 8eturn, )2I 6ow 8iskJ6ow 8eturn.
c. 32I Aigh 8iskJAigh 8eturn, 32I 6ow 8iskJ6ow 8eturn.
d. /3I Aigh 8iskJAigh 8eturn, (3I 6ow 8iskJ6ow 8eturn.
e. 02I Aigh 8iskJAigh 8eturn, &2I 6ow 8iskJ6ow 8eturn.
f. '22I Aigh 8iskJAigh 8eturn, 2I 6ow 8iskJ6ow 8eturn.
51
10. I* .)% &nE" n!! .)%r ('3&"'; *)r ,)r! "#'n 10 .!'rs< *)r #)9 ;)n$ 9)%; .)% -!
3r!3'r! ") s!! .)%r &n1!s",!n" 3!r*)r,&n$ 3))r;. -!*)r! .)% ('s#! &" M
a. <ou would cash it in immediately if there was any loss in value.
b. Dp to ( months.
c. Dp to / months.
d. Dp to ' year.
e. Dp to & years.
f. $ore than & years.
0)%r r&s8 3r)*&;!+-
EB"r!,!;. C)ns!r1'"&1! - C's# 40H H&$# R&s8< 100H L)9 R&s87
<our main concern is preservation of capital. <ou would prefer to take no investment risk and invest
in cash. The e:pected average return is *.3I and the likelihood of a negative return is never.
C)ns!r1'"&1! - A 1!r. ;)9 r&s8 "'8!r 430H H&$# R&s8< 50H L)9 R&s87
<ou are a conservative investor. 8isk must be very low and you are prepared to accept lower returns to
protect capital. The negative effects of ta: and inflation w ill not concern you, provided your initial
investment is protected. The e:pected average return is /.3I and the likelihood of a negative return is
once every 1 years.
M)!r'"!;. C)ns!r1'"&1! - A ;)9 r&s8 "'8!r 460H H&$# R&s8< 60H L)9 R&s87
<ou are a moderately conservative investor seeking better than basic returns, but risk must be low.
Typically an older investor seeking to protect the wealth which you have accumulated, you may be
prepared to consider less aggressive growth investments. The e:pected average return is 0I and the
likelihood of a negative return is once every / years.
B';'n(! - An '1!r'$! r&s8 "'8!r 4>6 H H&$# R&s8< 36 H L)9 R&s87
<ou are a balanced investor who wants a diversified portfolio to work towards medium to long>term
financial goals. <ou re=uire an investment strategy, which will cope with the effects of ta: and
inflation. -alculated risks will be acceptable to you to achieve good returns. The e:pected average
return is 1I and the likelihood of a negative return is once every 3 years.
M)!r'"!;. A$$r!ss&1! - A #&$# r&s8 "'8!r 4?0H H&$# R&s8< 20H L)9 R&s87
<ou are a moderately aggressive investor, probably earning sufficient income to invest most funds for
capital growth. $oderately aggressive investors are aiming to receive a significantly higher return than
cash over time and are therefore prepared to accept a reasonably high level of volatility. The e:pected
52
average return is ''.3I and the likelihood of a negative return is once every * years. A minimum
investment period of 3 years is advisable.
A$$r!ss&1! - A 1!r. #&$# r&s8 "'8!r 4100H H&$# R&s8< 0H L)9 R&s87
<ou are an aggressive investor prepared to compromise portfolio balance to pursue potentially greater
long>term returns. <our investment choices are diverse, but carry with them a higher level of risk.
,ecurity of capital is secondary to the potential for wealth accumulation. The e:pected average return
is '*I and the likelihood of a negative return is once every * years.
IJ9! '(8n)9;!$! "#'" '*"!r (),3;!"&n$ "#! '""'(#! Nr&s8 3r)*&;!N "#'" ,.J)%r r&s8 3r)*&;!
&s+43;!'s! (#!(87
7:tremely -onservative
-onservative
$oderately -onservative
;alanced
$oderately Aggressive
Aggressive
In1!s",!n" O-A!("&1!s
<our ,tatement of Advice should take into consideration factors that are considered important
to you. In designing your ,tatement of Advice could you please rate the following objectives in their
order of importance to you. !lease add any other financial objectives not in this list. !lease rate each
item in order of their importance to you by placing a circle around the relevant number.
The numbers representC
'. 5ot important
&. ,lightly important /
Us! "#! ;'s" ();%,n ") ;&s" "#! )-A!("&1!s &n )r!r )* "#!&r 3r&)r&"&!s 9&"# NAN -!&n$ "#! (;&!n"Es
,'&n 3r&)r&"..
O-A!("&1!
.enerate more income
I,3)r"'n(!+ Pr&)r&".
Invest for capital growthJwealth creation
Invest in ta: advantaged investments
Invest to minimize the impact of inflation
'
'
'
'
&
&
&
&
(
(
(
(
*
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Invest in a regular savings andJor retirement plan
le:ibility
,ecurity of capital
8etirement planning
7ducation planning
InvestmentJportfolio management
Asset Allocation
@iversification
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54
11.
Bi/io4ra*hy'
I. BOOKS REFERED+
BOOK NAME
2. ;odie, #ane E $arcus F&22*3G ,ecurity Analysis E !ortfolio $anagement, 5ew Delhi;
Prentice Hall of India Limited.
$. &. I.$ !andey F&22/G inancial $anagement New Delhi: Tata MacDraw Hill
Publishin !om"an#.
II. NEWSPAPER REFERED+
'. 7conomic Times and
&. inancial 7:press.
III. WEBSITES USED+
'. www.e=uitymaster.com
&. www.cmlinks.com
3.
0.
6.
8.
9.
:.
www.nse.com
www.nyme:.com
www.netashare.com
www.kotak.com
www.investopedia.com
www.esnips.com

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