Bringing industry, finance & people together.

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“Wealth Management Business

&

Comparative analysis of structured products with other products”.

By: Atul Abhiseck Singh.

Registration No: 08/016.

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Karvy Intro

Objective

Research Methodology and Scope

Wealth Management Outlook and Value chain.

Market Participants

Product Classes

Karvy WM: Client Profiling & Segmentation

Karvy Financial Planning & Business development model

Competitor Analysis

Structured Products, Features ,Types and Comparison with other Products

Future Outlook, Challenges and Opportunities

Experience and Recommendations

Achievements Karvy

10 reasons why Karvy.

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To understand the wealth management business and various financial products available in the financial sector.

Business development for wealth management division Karvy.

Career orientation towards financial services industry.

To interact with Affluent, HNIs and Ultra HNIs clients of Karvy.

Experience of marketing of financial products and personal financial planning services.

To understand various competitors in the wealth management domain.

To have practical exposure to the real market scenario.

To understand structured products concept, features and return with risk profile.

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Primary research

Global wealth models

Savings & Investments

Industry statistics

Secondary research program

Market Context Competitive dynamics Customer preferences Forecasts

Macro Economics.

Retail Invsts.

Wealthy Individuals & their assets.

Trends

Best practices

Structured products

Service offerings

Distribution

Financial planning

Product & Services

Sophistication

Retail savings &

Invsts.

Wealthy Individuals

& their assets

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Originated in 1990s

WM= IC+AP+RM

It includes:

1. Core banking type products like current account, time deposits etc.

2. Brokerage

3. Asset management-Both financial and non financial.

4. Lending products such as credit cards and mortgages.

5. Insurance and protection products

6. Advice in all shapes and forms-asset allocation & wealth structuring.

7. Other concierge type services like art storage, real estate location, hotel, restaurant & theatre booking.

It is nothing but services provided to wealthy individuals & their families.

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Wealth Management Process from a Client Advice Heritage

Wealth Management Process from a Product-Driven Heritage

Client advisory driven

Objective setting

Asset allocation

Product selection

Trading Product driven

Advice oriented Product oriented

Private banks; TrustsAssets

managers Brokers

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Brokerages

AMC.

Insurance agencies

Financial advisors/planners

Private banker’s

Family offices.

Equity- direct equity, futures & options, mutual funds etc.

Debt- bonds, WDM/RDM, fixed deposits etc.

Alternative Investments- gold/silver, real estate, structured products, commodities, art & antiques etc.

Risk Management- life insurance & non life Insurance.

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Affluent category

HNIs

Ultra-HNIs

Based on Life cycle stage :

Young unmarried

Married with children

Married with older children

Based on Source of Income:

Salaried individual ( CEOs)

Professionals & freelancers (Doctors, teachers, designers, architects, etc.)

We also segment on the basis of:

Assets size

Sources of wealth and tax situation

Advice dependency & risk tolerance

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"To cater to the unique needs and requirements of the mass affluent by providing complete financial solutions and thereby enabling them to transform their dreams into reality.”

Our Vision:

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A personalized service - comprehensive & continuous

Comprises of the following services :

InvestmentPlanning

RetirementPlanning

TaxPlanning

InsurancePlanning

LiabilityPlanning

ExpensesPlanning

ContingencyPlanning

Personal FinancialPlanning

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What do I want to achieve and how?

Am I overspending?

Where do I invest?

How much will I need to invest to realize my financial freedom?

Am I taking too much or too little risk?

Am I doing enough with regard to tax planning?

Should I continue or foreclose my loan?

Financial planning answers critical questions like:

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After we acquire a client we follow the 4 stages:

Seamless Execution

Plan Process

Pre-PlanInteraction

Actual Plan Making

Product specificrecommendationthrough research

support

Follow-Up

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Plan Process

Pre-PlanInteraction

Actual Plan Making

Product specificrecommendationthrough research

support

Follow-Up

• Personalized touch for understanding you better

• Assistance in filling Input Sheet

• Define and establish your ‘financial shock absorbers’

• Helping you to identify, quantify and prioritize your financial goals

Stage 1

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Plan Process

Pre-PlanInteraction

Actual Plan Making

Product specificrecommendationthrough research

support

Follow-Up

Stage 2

• Team of experts working towards your financial future

• Giving you valuable insights through different techniques like ratio analysis, net-worth analysis, open risk position, etc.

• Tailor-made recommendations for you

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Stage 3

Plan Process

Pre-PlanInteraction

Actual Plan Making

Product specificrecommendationthrough research

support

Follow-Up

Real Estate

Tax Planning

Mutual Funds Insurance

Commodities

F&O

Equities

Research support

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Plan Process

Pre-PlanInteraction

Actual Plan Making

Product specificrecommendationthrough research

support

Follow-Up

Stage 4

• Periodic litmus test to evaluate how close you are to your financial goals

• Assessing any change in your risk tolerance levels

• Quarterly portfolio review and feedback

• Performance statement of your investments

• Review of insurance needs at important junctures of life

• Continuous research recommendations over all personal finance products

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KARVY FINANCIAL PLANNING

Wealth management services

Portfolio management services

Private banking servicesHave a wholesome

meal!

Here lies the difference

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And the wholesome meal at the best priceAnd the wholesome meal at the best price

Fee structure#

One time membership fee* Rs.5,000

Annual maintenance charge* Rs.5,000

*Taxes extra #Subject to changes

Value additions: Need based review

Investment Calendar

Online portfolio

Access to exclusive research report

2517.75 man hrs. of service

Exclusive login id

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Service Offering Fees Charged

Remarks

HSBC Bank WMS/ Need based Financial planning/ PMS

None Relationship based business. Focus on banking, financial & Insurance products. PFP focus missing.

ICICI Bank Private banking/ WMS None Relationship based business. Focus on pushing banking, financial & insurance products only. PFP focus missing.

ABN Amro Bank WMS/ Preferred banking None Retail customers are not targeted; Clients with investible surplus >30 lakhs only. Focus on baking & financial products. Main focus on MF. PFP focus missing.

HDFC Bank Private banking, Recommendation on Equity, MF & Insurance

None Equity, DP, MF & F&O products pushed & recommended. PFP Focus missing.

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Service Offering

Fees Charged

Remarks

Kotak Securities WMS None Relationship based business. Focus on banking, financial & Insurance products. PFP focus missing.

Citibank WMS None A/c holders targeted, relationship based business, focus on banking, financial & Insurance products. PFP focus missing.

Religare PMS Performance Linked

DP,MF, Equity, Commodities, Derivatives. Portfolio management based on risk profiles. No PFP Focus.

Deutsche Bank Private Banking/ PFP

None Relationship > Rs.5 Lakhs; RM- single touch point; MF & Insurance products & recommendations offered; Consolidated gain/loss statements provided. However part of PFP focus missing due to lack of goal setting.

Allegro PFP Rs. 10,000-20,000

RMs handle clients; analytical & solution driven approach for PFP.

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Structured Products are one of the most practical and recently developed vehicles of wealth management.

Security low return

Risk high return

Optional

Part

Fixed Income

Part

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100%.

80%.

20%.

65%.

Performance Linked

Component.

Performance Linked

Component.

Fixed-Income Component.

Fixed-Income Component.

Fixed-Income Component.

Fixed-Income Component.

Performance Linked

Component.

Performance Linked

Component.

According to the market evolution.

Guranteed.

Returns:

It varies according to the performance of the underlying assets.

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Features:

Capital protection guaranteed.

Less risk then any other product.

Return linked to the value of an asset or level of an index

Fixed term-both capital and return.

Can be sold before maturity but return may be less.

Types:

Structured notes: Equity linked, Multi assets linked, Commodity linked, FX linked, Precious metal linked notes etc.

One touch deposit

Wedding cake deposit

Options & lending

Capital series

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Comparison of Structured Products with other Traditional Products.

Basis of Comparison/Products.

Structured Products.

Equity Shares/Stocks.

Mutual Funds. Debts/FD/NSC/KVP. Bank Deposits.Alternative

Investments.

Investment Objectives.

Capital Protected and better return than other

Investments.

To get maximum /highest return in

quick time.

To get high return in respect to Bank Deposit

and NSC etc.

Capital Security and Good return, whether market is

favorable or not.

Lowest Return But Capital

Safe.

In Future Investment Value will rise or to have

Capital Gain.

Risk Profile.

Capital Protected if held till Maturity, So

No Risk.

Highly Risky due to dependency on

capital and stock market.

Risky, NAV Depends on

Market Fluctuations.

No Risk. No Risk.Somewhat Risk is there, especially in Gold Investment.

Time Horizon.

Lock in period is there. Full Tenure For

Capital Protection and

return.

No Lock in Period in Existing one, but yes in New issued ones.

Lock in Period is there in Close ended funds.

No Lock in Period, But Return Differs.

No Lock in Period.

No Lock in Period.

Profiles of Investors. Mostly HNIs

All Clients, But for those who take high risk and want better and sooner return.

Individuals who want to take less risk and better

return than normal savings.

Who don’t want to take risk and wants good return

than normal savings.

Normal No Risk taker Investors.

HNIs who takes some risk on future

predictions of market.

Future Outlook.

Huge, Research Analysts

Predicting $ 180 Billion market

Pretty well, but investors are more averse to it right

now

Good for individuals,

small Investors, market growing at 26 %annually

Somehow Stagnant Still GrowingHigh Growth

future Prospects

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Future:

Population

Skills

Stock Market

Affluent, HNIs and Ultra HNIs

Market rules regarding structured products

Challenges & opportunities:

Client education

Scaling up

Unorganized sector.

Technology support

Regulatory reforms

Rolodex migration

Certification issues

Commoditization

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Experience:

Attended presentation by SUPERFUND, an MNC based in Singapore on structured products.

Patience.

Tackle questions.

Recommendations:

Karvy should tap both organized and unorganized market on a large scale.

Karvy should improve its after sales service & tap the existing customer base of Karvy.

Karvy should make its website more attractive, user friendly and informative.

Karvy can advertise regarding wealth management, financial planning and structured products as many people don’t have idea about it.

There is need to make the people aware of financial planning and PMS, WM difference.

To consider the service charges as most companies to attract customers give discounts.

Different pricing for different income range can be introduced

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Among the Top 3

Depository

Participants

Amongst the Top 5

Stock Brokers

Largest Network

of Branches &

Business Associates

ISO 9002

certified operations

by DNV

Adjudged as one of

The Top 50 IT Users

in India by MIS Asia

Full fledged

IT driven operations

Largest Independent

Distributor for

Financial Products

Amongst Top 10 Investment Bankers

India’s #1 Registrar

& Securities

Transfer Agent

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Sound research team in equities, F&O, income tax, insurance, mutual funds

An ever expanding network of branches to provide you service at your door step

A wide basket of products which includes:- stock broking, commodity broking, derivatives trading, insurance broking, tax planning, mutual funds advice, property services etc.

Personalized service catering to your unique tastes and requirements

Over a 2 decade of experience in the financial services spectrum

A member of FPSB and an exclusive team of CFPs involved in the preparation of financial plan

An ever expanding product portfolio consisting of future products like Mint Street, co-branded credit cards etc.

An efficient and effective top management

Professional management

PASSION for making you financial successful.

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Looking forward to

making you financially

successful.

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AnyQuestions ?

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Thank YOU