DECLARATION

I hereby declare that interim report titled- Portfolio Management and Financial Planning for BS
KAISER PVT Ltd. in Laxmi Nagar, Delhi which I have submitted in partial fulfillment of the
requirement of BCOM (H) program of Fairfield Institute of Management and Institute is an
original piece of work, the data and statistics used have been duly acknowledged. This
submission has never been a basis for any previously awarded degree to any individual or any
institution.

Date: 09 SEPT 2016

Vaani Sachdeva Deepak Singh Sisodiya

(Company Guide)

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 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere thanks
to all of them.

First of all, I would thank Dr. R.K.GARG , Director of Fairfield Institute of Management and
Technology for providing me the opportunity to work at a reputed corporate house.

I am highly indebted to Prof. Manish Jha, Fairfield Institute of Management and Technology for
his guidance and constant supervision as well as for providing necessary information regarding
the project & also for her support in completing the project.

I would like to express my gratitude towards my parents & Mr Deepak Singh Sisodiya, BP- BS
Kaiser Pvt. Ltd. for their kind co-operation and encouragement which helped me in completion
of this project. Mr. Deepak also introduced me to various financial terminologies and all the
concepts which were required for the project and for being patient with me through the endless
Quality checks.

I would like to express my special gratitude and thanks to industry persons for giving me such
attention and time.

My thanks and appreciations also go to my colleagues in developing the project and people who
have willingly helped me out with their abilities.

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 EXECUTIVE SUMMARY

The main objectives of the report are, to gain knowledge about Financial Service Industry &
Investment Advisory. To know about the awareness of importance of financial planning in
society. Determining the awareness of financial planning and focus on aspects of financial
planning. Determining the motives of buying Life Insurance Plans.

Background: India is the one of the fastest growing economy of the world and the financial
sector plays an important part in the development of the economy.

For the purpose of practical training through Summer Internship Program, I worked with BS
Kaiser Pvt. Ltd. In financial sector I had to do the project on financial planning and portfolio
management of various clients. The main purpose of financial planning and portfolio
management is to know the customer where his/her interest is to invest.

Methodology: For completion of the project:

1. Market survey activity

2. Customer interaction
3. Preparation of Financial Planning report for companys customers.

Collection of primary data through:

1. Market survey
2. Questionnaire
3. Personal meetings

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 TABLE OF CONTENT
SNO. PARTICULARS PAGE NO.
1 DECLARTION 1

2 ACKNOWLEDGEMENT 2

3 EXECUTIVE SUMMARY 3

4 TABLE OF CONTENT 4

5 CHAPTER-1 INTRODUCTION TO TOPIC 33

6 CHAPTER-2 INTRODUCTION TO COMPANY 45

7 CHAPTER-3 LITERATURE REVIEW 49

8 CHAPTER-4 RESEARCH METHODOLOGY 55

9 CHAPTER-5 ANALYSIS AND INTERPRETATION 81

10 CHAPTER-6 SUGGESTIONS AND RECOMMENDATIONS 86

11 CHAPTER-7 CONCLUSION 90

12 BIBLOGRAPHY 91

13 ANNUXURE 95

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 CHAPTER 1

INTRODUCTION TO TOPIC

FINANCIAL PLANNING:

Financial planning is the process of accessing the financial goals of clients that arises at different
intervals of his life, taking into account an inventory of the investments and other assets he
already has to help him to achieve those goals and estimating what he will need in the future.
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OBJECTIVES OF FINANCIAL PLANNING

The objective is to ensure that the right amount of money is available to the investor at the right
time to enable him to meet the different goals in various life stages of an investor.

For example:

1) Savings for buying a car or house

2) Child Education

3) Child Marriage

4) Retirement

BENEFITS OF FINANCIAL PLANNING:

Financial Planning gives guidance and intending to your money related choices. Its permit you to
see how each money related choice you make influences different territories of your funds. For
illustrations, purchasing a specific venture item may help you pay off your home loan quicker or
it may postpone your retirement altogether. By survey each money related choice as a feature of
the entire, you can consider its short and long haul impacts on your life objectives. You can
likewise adjust all the more effortlessly to life changes and feel more secure that your objectives
on track.

1. Improves risk management: Taking adequate life cover and health cover is critical.
When you do financial planning, you can determine the amount of cover you need with greater
certainty. Thus you do not overpay for unnecessary insurance and also do not end up with a
lower than necessary cover.

2. Improvement: In portfolio return on investment (ROI): Financial planning takes into

account various aspects like risk management, investment planning, goal planning, liquidity

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management and liability management. You are able to design an integrated investment plan that
takes into account goals, available liquidity and risk appetite, thus helps in improving your
portfolio ROI.

3. Use the metrics approach to manage your money : When you undertake financial
planning, you can measure specific milestones on what you have achieved. There is a science
involved in managing money and financial planning helps you do this with higher efficiency.

4. Identify good and not so good areas: Financial planning helps you bring order to
yours finances by identifying what is right and not right for you. For example, you may be low
on insurance cover or holding investments which are performing poorly. Financial planning
helps you identify this and take corrective measures.

5. Reduce your cost of personal finance: When you undertake financial planning, you
can cut down on many personal finance costs. A good example is by doing away with expensive
ULIP policies or any investment which carries high charges.

6. Discipline in managing money: Financial planning brings in discipline. Also, there are
subtle behavioral changes when you undergo financial planning. For example, when you run a
systematic investment plan (SIP), your expenses are automatically curtailed and this goes
towards investments. Similarly, when you do financial planning, you become aware if your
lifestyle expenses are above or below what you can afford. If it is the former, you can take
necessary steps to cut back on unnecessary expenses.

7. Measure and improve asset allocation: Asset allocation is a critical element of

managing your money. There has to be a fine balance struck between managing risk and returns,
and the right assets need to be chosen for the same. Financial planning helps in selecting the right
asset allocation mix depending on your risk and return preferences.

8. Future visibility: Planning is for the future. While we have often heard quotes saying that
you should live the present and not dwell on the past or worry about the future, when it comes to
money, considering the future becomes very important. Financial planning helps you get
visibility for next 15-20 years. You are able to get comfort on retirement and planning your

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 money during emergency situations. This helps in achieving peace of mind and also helps you
plan in case there is a gap.

9. Estate distribution: Will writing and estate planning is an integral part of financial
planning. When you do financial planning you can plan your estate distribution after your time,
such that disputes are avoided.

10. Professional approach: There is a professional approach in putting together a plan and
tracking it. You can implement best practices with the help of your financial advisor. All this
brings about greater order to your money management practices.

IMPORTANCE OF FINANCIAL PLANNING:

Financial Planning is process of framing objectives, policies, procedures, programs and budgets

regarding the financial activities of a concern. This ensures effective and adequate financial and

investment policies. The importance can be outlined as-

1. Income: It's possible to manage income more effectively through planning. Managing

income helps you understand how much money you'll need for tax payments, other monthly

expenditures and savings.

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2. Cash Flow: Increase cash flows by carefully monitoring your spending patterns and

expenses. Tax planning, prudent spending and careful budgeting will help you keep more of your

hard earned cash.

3. Capital: An increase in cash flow, can lead to an increase in capital. Allowing you to

consider investments to improve your overall financial well-being.

4. Family Security: Providing for your family's financial security is an important part of the
financial planning process. Having the proper insurance coverage and policies in place can

provide peace of mind for you and your loved ones.

5. Investment: A proper financial plan considers your personal circumstances, objectives and

risk tolerance. It acts as a guide in helping choose the right types of investments to fit your needs,

personality, and goals.

6. Standard of Living: The savings created from good planning can prove beneficial in

difficult times. For example, you can make sure there is enough insurance coverage to replace

any lost income should a family bread winner become unable to work.

7. Financial Understanding: Better financial understanding can be achieved when

measurable financial goals are set, the effects of decisions understood, and results reviewed.

Giving you a whole new approach to your budget and improving control over your financial

lifestyle.

8. Assets: A nice 'cushion' in the form of assets is desirable. But many assets come with

liabilities attached. So, it becomes important to determine the real value of an asset. The

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 knowledge of settling or canceling the liabilities, comes with the understanding of your finances.

The overall process helps build assets that don't become a burden in the future.

9. Savings: It used to be called saving for a rainy day. But sudden financial changes can still

throw you off track. It is good to have some investments with high liquidity. These investments

can be utilized in times of emergency or for educational purposes.

10. Ongoing Advice: Establishing a relationship with a financial advisor you can trust is

critical to achieving your goals. Your financial advisor will meet with you to assess your current

financial circumstances and develop a comprehensive plan customized for you.

FINANCIAL PLANNING ADVISOR

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 CASH

PLANNING

TAX INVESTMENT

PLANNING PLANNING

FINANCIAL
PLANNING

ESTATE
INSURANCE
PLANNING
PLANNING

RETIREMENT

PLANNING

FIGURE 1

FIGURE 1

CASH PLANNING:

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Cash flow forecasting or cash flow management is a key aspect of financial management of a
business, planning its future cash requirements to avoid a crisis of liquidity.

Suggested Investment Style:

Income Investment = Expenses

RETIREMENT PLANNING:

Retirement arranging, in a monetary setting, alludes to the distribution of investment funds or

income for retirement. The objective of retirement arranging is to accomplish money related
autonomy.

The procedure of retirement arranging points to:

Survey status to-resign given a sought retirement age and way of life, i.e., whether one
has enough cash to resign
Recognize activities to enhance status to-resign
Get money related arranging learning
Empower sparing practices

ESTATE PLANNING:

Estate Planning is the procedure of suspecting and organizing, amid a man's life, for the transfer
of their home. Bequest arranging can be utilized to wipe out vulnerabilities over the organization
of a probate and to boost the estimation of the home by decreasing duties and different costs. A
definitive objective of estate planning can be controlled by the particular objectives of the
customer, and might be as straightforward or unpredictable as the customer's needs direct.
Watchmen are frequently assigned for minor kids and recipients in insufficiency.

TAX PLANNING:

Tax planning is the analysis of one's financial situation from a tax efficiency point of view so as
to plan one's finances in the most optimized manner. Tax planningallows a taxpayer to make the
best use of the varioustax exemptions, deductions and benefits to minimize their tax liability
over a financial year.

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FINANCIAL PLANNING PROCESS

FIGURE 2

1. Establishing and defining the client-Planner relationship: The Financial Planner

should clearly explain or document the services to be provided to you and define both his and
your responsibilities. The Planner should explain fully how he will be paid and by whom. The
Planner should also disclose any restrictions on his ability to give unbiased advice and disclose

13
any conflicts of interests. You and the Planner should agree on how long the professional
relationship should last and how decisions will be made.

2. Gathering client data, including goals : The Financial Planner should ask for
information about your financial situation. You and the Planner should mutually define your
personal and financial goals, understand your time frame for results and discuss, if relevant, how
you feel about risk. The Financial Planner should gather all the necessary documents before
giving you the advice you need.

3. Analysing and evaluating your financial status : The Financial Planner should
analyse your information to assess your current situation and determine what you must do to
meet your goals. Depending on what services you may have asked for, this could include
analysing your assets, liabilities and cash flow, current insurance coverage, investments or tax
strategies.

4. Developing and presenting Financial Planning recommendations and/or

alternatives: The Financial Planner should offer Financial Planning recommendations that
address your goals, based on the information provided by you. The Planner should go over the
recommendations with you to help you understand them so that you make informed decisions.
The Planner should also listen to your concerns and revise the recommendations as appropriate.

5. Implementing the Financial Planning recommendations: You and the Planner

should agree on how the recommendations will be carried out. The Planner may carry out the
recommendations or serve as your 'coach', coordinating the whole process with you and other
professionals such as solicitors or stockbrokers.

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6. Monitoring the Financial Planning recommendations: You and the Planner
should agree on who will monitor your progress towards your goals. If the Planner is in charge of
the process, she should report to you personally to review your situation and adjust the
recommendations, if needed, as your life changes.

PORTFOLIO MANAGEMENT:

Firstly we need to answer this question that what is portfolio?

A mix of securities with various danger and return characteristics will constitute the arrangement
of the speculator. In this manner, a portfolio is the mix of different resources and/or instruments
of speculations. The mix may have distinctive elements of danger &return, separate from those
of the segments. The portfolio is also built up out of the riches or salary of the financial specialist
over a timeframe, with a perspective to suit his danger and return inclination to that of the
portfolio that he holds. The portfolio examination of the danger and return characteristics of
individual securities in the portfolio and changes that may occur in blend with different securities
due to interaction among themselves and effect of every one of them on others

Portfolio Managementis the process of creation and maintenance of investment portfolio. It is a

complex process which tries to make investment activity more rewarding and less risky.

TYPES OF PORTFOLIO MANAGEMENT

Portfolio Management is further of the following types:

Active Portfolio Management: As the name suggests, in an active portfolio

management service, the portfolio managers are actively involved in buying and selling
of securities to ensure maximum profits to individuals.

Passive Portfolio Management: In a passive portfolio management, the portfolio

manager deals with a fixed portfolio designed to match the current market scenario.

Discretionary Portfolio management services: In Discretionary portfolio

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 management services, an individual authorizes a portfolio manager to take care of his
financial needs on his behalf. The individual issues money to the portfolio manager who
in turn takes care of all his investment needs, paper work, documentation, filing and so
on. In discretionary portfolio management, the portfolio manager has full rights to take
decisions on his clients behalf.

Non-Discretionary Portfolio management services: In non-discretionary

portfolio management services, the portfolio manager can merely advise the client what
is good and bad for him but the client reserves full right to take his own decisions.

PHASES OF PORTFOLIO MANAGEMENT

Portfolio management is a process of many activities that aimed to optimizing the investment.
Five phases can be identified in the process:

1. Security Analysis

2. Portfolio Analysis

3. Portfolio Selection

4. Portfolio revision

5. Portfolio evaluation

Each phase is essential and the success of each phase is depend on the efficiency in carrying out
each phase.

Security Analysis:

Security analysis is the examination of tradable money related instruments called securities.
These can be ordered into obligation securities, values, or some half and half of the two. All the
more comprehensively, prospects contracts and tradable credit subordinates are here and there
included. Security analysis is regularly partitioned into key investigation, which depends upon
the examination of major business variables, for example, money related articulations, and

16
specialized examination, which centers upon value patterns and force.

Portfolio Analysis:

Portfolio analysis is an efficient approach to dissect the items and administrations that make up
an affiliation's business portfolio. All relationship (aside from the least difficult and the littlest)
are included in more than one business.

Portfolio Selection:

Security selection includes a quest for under estimated securities. On the off chance that a
speculator resort to dynamic stock determination, he may utilize key as well as specialized
investigation to distinguish stocks that appears to guarantee unrivaled returns and overweight the
stock segment of his portfolio on them. In like manner, stocks that are seen to be ugly will be
under weighted with respect to their position in the business sector portfolio. To the extent
securities are concerned, security selection calls for picking securities that offer the most
astounding respect development at a given level of danger.

Portfolio revision:

In the whole procedure of portfolio administration, portfolio revision is as vital stage as portfolio
selection. Portfolio revision includes changing the current blend of securities. This might be
affected either by changing the securities as of now incorporated into the portfolio or by
modifying the extent of assets put resources into the securities. New securities might be added to
the portfolio or some current securities might be expelled from the portfolio. In this manner it
prompts buy and offer of securities. The target of portfolio revision is like the goal of
determination i.e. expanding the arrival for a given level of danger or minimizing the danger for
a given level of return.

The requirement for portfolio revision has stirred because of changes in the budgetary markets
since making of portfolio. It has excited as a result of numerous components like accessibility of
extra supports for speculation, change in the danger state of mind, change venture objectives, the

17
need to sell a part of the portfolio to give assets to some option employments. The portfolio
should be amended to suit the adjustments in the financial specialist's position.

Portfolio Revision basically involves two stages:

Portfolio Rebalancing:

Portfolio Rebalancing includes evaluating and re-examining the portfolio arrangement (i.e. the
stock-bond blend). There are three fundamental arrangements as for portfolio

rebalancing: purchase and hold strategy, consistent blend approach, and the portfolio protection
strategy.

Under a purchase and hold arrangement, the underlying portfolio is left undisturbed. It is
basically a 'purchase and hold' approach. Regardless of what happens to the relative values, no
rebalancing is finished. For instance, if the underlying portfolio has a stock-bond blend of 50:50
and following six months it happens to be say 70:50 on the grounds that the stock segment has
acknowledged and the bond segment has stagnated, than in such cases no progressions are made.

The consistent blend arrangement calls for keeping up the extents of stocks and bonds in
accordance with their objective quality. For instance, if the coveted blend of stocks and bonds is
say 50:50, the consistent blend calls for rebalancing the portfolio when relative estimation of its
segments change, so that the objective extents are kept up.

The portfolio insurance policy approach calls for expanding the introduction to stocks when the
portfolio acknowledges in worth and diminishing the presentation to stocks when the portfolio
deteriorates in quality. The fundamental thought is to guarantee that the portfolio esteem does not
fall underneath a story level.

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 Portfolio Upgrading:

While portfolio rebalancing includes moving from stocks to bonds or the other way around,
portfolio-upgrading calls for re-surveying the danger return attributes of different securities
(stocks and in addition bonds), offering over-evaluated securities, and purchasing under-valued
securities. It might likewise involve different changes the financial specialist may consider
important to improve the execution of the portfolio.

Portfolio evaluation:

Portfolio evaluation is the last stride during the time spent portfolio administration. The
procedure is worried with evaluating the execution of the portfolio over a chose timeframe as far
as return and hazard. Through portfolio evaluation the financial specialist tries to discover how
well the portfolio has performed. The portfolio of securities held by a speculator is the
consequence of his venture choices. Portfolio evaluation is truly an investigation of the effect of
such choices. This includes quantitative estimation of genuine return acknowledged and the
danger conceived by the portfolio over the time of speculation. It gives a component to
distinguishing the shortcoming in the speculation procedure and for enhancing these lacking
territories.

The evaluation gives the essential criticism to planning a superior portfolio next time.

ASPECTS OF PORTFOLIO MANAGEMENT

Basically, portfolio management involves:

1. A proper investment decision-making of what to buy and sell

2. Proper money management in terms of investment in a basket of assets to satisfy the asset
preferences of the investors.

3. Reduce the risk and increase the returns.

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 4. Balancing fixed interest securities against equities.

5. Balancing high dividend payment companies against high earning growth companies as
required.

6. Finding the income or growth portfolio as required.

7. Balancing transaction costs against capital gains from rapid switching.

8. Balancing income tax payable against capital gains tax.

9. Retaining some liquidity to seize upon bargains.

TYPES OF RISK IN PORTFOLIO MANAGEMENT

Each and every investor has to face risk while investing. What is Risk? Risk is the uncertainty of
income/capital appreciation or loss of both. Risk is classified into: Systematic risk or Market
related risk and Unsystematic risk or Company related risk.

TYPES OF RISK IN PORTFOLIO MANAGEMENT

SYSTEMATIC RISK UNSYSTEMATIC RISK

1. Market Risk 1. Business Risk

2. Interest Rate Risk 2. Internal Risk
3. Inflation Rate Risk 3. Financial Risk

FIGURE 3

SYSTEMATIC RISK
Systematic risk refers to that portion of variation in return caused by factors that affect
the price of all securities. It cannot be avoided. It relates to economic trends with effect to

20
 the whole market.

This is further divided into the following:

1. Market risks:
A variation in price sparked off due to real, social political and economical events is
referred as market risks.

2. Interest rate risks:

Uncertainties of future market values and the size of future incomes, caused by
fluctuations in the general level of interest is referred to as interest rate risk.
Here price of securities tend to move inversely with the change in rate of interest.

3. Inflation risks:
Uncertainties in purchasing power is said to be inflation risk.

UNSYSTEMATIC RISK
Unsystematic risk refers to that portion of risk that is caused due to factors related to a
firm or industry. This is further divided into:

1. Business risk:
Business risk arises due to changes in operating conditions caused by conditions that
thrust upon the firm which are beyond its control such as business cycles, government
controls etc.

2. Internal risk:
Internal risk is associated with the efficiency with which a firm conducts its operations
within the broader environment imposed upon it.

3. Financial risk:

Financial risk is associated with the capital structure of a firm. A firm with no debt
financing has no financial risk.

SEBI GUIDELINES TO PORTFOLIO MANAGEMENT

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 SEBI has issued detailed guidelines for portfolio management services. The guidelines have
been made to protect the interest of investors.

The salient features of these guidelines are:

The nature of portfolio management service shall be investment consultant.

The portfolio manager shall not guarantee any return to his client.
Clients funds will be kept in a separate bank account.
The portfolio manager shall act as trustee of clients funds.
The portfolio manager can invest in money or capital market.

Purchase and sale of securities will be at a prevailing market price.

PORTFOLIO MANAGEMENT SERVICES

A Portfolio in Securities Market alludes to wicker container of securities that a man has put into.
Here and there this incorporates Debt Instruments, Mutual Funds and even Bank Balance
notwithstanding normal values.

The individual assigned to deal with the portfolio is called Portfolio Manager. The Portfolio
Manager prompts, oversees and regulates the securities and assets for the benefit of the
entrusting customer.

The administration is offered by a Portfolio Manager under a particular permit from Securities
and Exchange Board of India.

According to meaning of SEBI Portfolio signifies "an accumulation of securities claimed by a

financial specialist". It speaks to the aggregate possessions of securities having a place with any
individual". It contains distinctive sorts of benefits and securities. Portfolio administration
alludes to the administration or organization of a portfolio of securities to ensure and improve the
estimation of the basic venture. It is the administration of different securities (offers, bonds and
so on) and different resources (e.g. land), to meet determined venture objectives for the
advantage of the speculators. It lessens hazard without yielding returns. It includes an
appropriate venture choice with respect to what to purchase and offer. It includes appropriate
22
cash administration. It is otherwise called Investment Management.

Portfolio Management Services, called, as PMS are the admonitory administrations gave by
corporate monetary mediators. It empowers speculators to advance and ensure their ventures that
help them to create higher returns. It dedicates adequate time in reshuffling the ventures available
in accordance with the evolving flow. It gives the aptitude and skill to direct through these mind
boggling, unpredictable and dynamic times. It is a decision of selecting and amending range of
securities to it with the attributes of a speculator. It averts holding of loads of devaluing quality.
It goes about as a monetary mediator and is liable to administrative control of SEBI.

Under PMS, the Client and the Portfolio Manager diagram particular needs of the customer and
the Portfolio Manager deals with the Portfolio as per those necessities. Now and again the
Portfolio Manager may likewise have separate prepared plans for the customer to browse. As an
aftereffect of this customization, customer, with his particular needs, advantages. The
administration level through reporting exchanges, property articulations and so on, likewise are
tantamount or shockingly better than that of a shared asset.

Benefits of PMS

1. Personalized Advice: A client gets investment advice and strategies from master
Fund Managers. An Investment Relationship Manager will guarantee that you get all the
administrations identified with your speculation needs. The customized benefits
additionally deciphers into zero printed material and all your money related articulations
will be messaged

2. Professional Management: An experienced team of portfolio managers ensure your

portfolio is tracked, monitored and optimized at all times.

3. Continuous Monitoring: The clients are informed about your investment decisions.
A dedicated website and a customer services desk allow you to keep a tab on portfolios
performance.

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 4. Timing: Portfolio managers save customer's cash on time. Portfolio management
services (PMS) help in allotting appropriate sum cash in right kind of sparing
arrangement at ideal time. This implies portfolio managers investigates the business
sector and gives his master exhortation to the customer with respect to the sum he ought
to take out at the season of huge danger in securities exchange.

5. Professional Management: PMS gives advantages of expert cash administration

with the adaptability, control and potential assessment points of interest of owing
individual stocks or different securities. The portfolio managers deal with all the
authoritative parts of customer's portfolio with a month to month or semiannual providing
details regarding general status of the portfolio and execution.

6. Flexibility: Portfolio manager's arrangement sparing of his customer as indicated by

their need and inclinations. Be that as it may, some of the time, portfolio managers can
contribute customer's cash as indicated by his inclination since they know the business
sector exceptionally well than his customer. It is his customer's obligation to give him a
level of adaptability so he can deal with the venture with full proficiency and adequacy.

SERVICES AND STRATEGIES OFFERED THROUGH PMS

1. Portfolio management services (PMS) handles all types of administrative work like
opening a new bank account or dealing with any financial settlement or depository
transaction.

2. PMS also help in managing the tax of his client based on detailed statement of the
transaction found on the clients portfolio.

3. PMS also provide a Portfolio manager to the client who acts as personal relationship
24
 manager though whom the client can interact with the fund manager at any time
depending on his own preferences such as:

i. To discuss any concern saving or money, the client can interact with portfolio manager on
the monthly basis.
ii. The client can discuss on any major changes he want in his asset allocation and
investment strategies.

PORTFOLIO MANAGER

Portfolio Manager is an expert who deals with the portfolio of a financial specialist with the goal
of gainfulness, development and danger minimization. As indicated by SEBI, Any individual
who in accordance with an agreement or game plan with a customer, prompts or coordinates or
attempts for the customer the administration or organization of a portfolio of securities or the
assets of the customer, as the case might be is a portfolio manager. He is required to deal with the
financial specialist's advantages wisely and pick specific speculation roads proper for specific
times going for expansion of benefit. He tracks and screens every one of your speculations,
income and resources, through live value overhauls. The manager needs to adjust the parameters
which characterizes a decent speculation i.e. security, liquidity and return. The objective is to get
the most noteworthy return for the customer of the over saw portfolio.

There are two sorts of portfolio manager known as Discretionary Portfolio Manager and Non-
Discretionary Portfolio Manager. Discretionary portfolio manager is the person who separately
and freely deals with the assets of every customer as per the necessities of the customer and non-
discretionary portfolio manager is the person who deals with the assets as per the headings of the
customer.

WHO CAN BE A PORTFOLIO MANAGER?

Only those who are registered and pay the required license fee to SEBI are eligible to operate as
Managers. An applicant for this purpose should have necessary infrastructure with professionally
qualified person and with a minimum of two persons with experience in this business and
minimum net worth of Rs.5 lack. The certificate once granted is valid for three years. Fees

25
payable for registration are Rs2.5 lack for two years and Rs.1 lack for the third year. From the
fourth year onwards, renewal fees per annum are Rs.75000. These are subject to change by
SEBI.

The SEBI has imposed number of obligation and code of conduct on portfolio manager. The
portfolio manager should have a high standard of integrity, honesty and should not have been
convicted of any economic offence or moral turpitude. He should not resort of rigging up of
prices, insider trading or creating false market etc. Their books of account are subjected to
inspection and audited by SEBI. The observance of code of conduct and guidelines given by
SEBI are subject to inspection and penalties for violation are imposed. The Manager has to
submit periodical returns and documents as may be required by the SEBI from time-to-time.

GENERAL RESPONSIBILITIES OF PORTFOLIO MANAGER

Following are some of the responsibilities of a Portfolio Manager:

1. The portfolio manager shall act in a fiduciary capacity with regard to the client's funds.

2. The portfolio manager shall transact the securities within the limitations placed by the
client.

3. The portfolio manager shall not derive any direct or indirect benefit out of the client's
funds or securities.

4. The portfolio manager shall not borrow funds or securities on behalf of the client.

5. portfolio manager shall ensure proper and timely handling of complaints from his clients
and
take appropriate action immediately

6. The portfolio manager shall not lend securities held on behalf of clients to a third person
except as provided under these regulations.

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CODE OF CONDUCT OF PORTFOLIO MANAGER

Every portfolio manager in India as per the regulation 13 of SEBI shall follow the following
Code of Conduct:

1. A portfolio manager shall maintain a high standard of integrity fairness.

2. The clients funds should be deployed as soon as he receives.

3. A portfolio manager shall render all times high standards and unbiased service.

4. A portfolio manager shall not make any statement that is likely to be harmful to the
integration of other portfolio manager.

5. A portfolio manager shall not make any exaggerated statement.

6. A portfolio manager shall not disclose to any client or press any confidential information
about his client, which has come to his knowledge.

7. A portfolio manager shall always provide true and adequate information.

8. A portfolio manager should render the best pose advice to the client.

OBJECTIVES OF INVESTORS FOR SELECTING OF PMS

Following are the objectives:

1. Keep the security, safety of principles intact both in terms of money as well as its
purchasing power.

2. Stability of the flow of income so as to facilities planning more accurately and

systematically the reinvestment or consumption of income.

3. To attain capital growth by re-investing in growth securities or through purchase of

27
 growth securities.

4. Marketability of the security which is essential for providing flexibility to the investment
portfolio.

5. Liquidity i.e. nearness to the money which is desirable to the investors so as to take
advantages of attractive opportunities upcoming in the market.

6. Diversification: The basic objective of building a portfolio is to reduce the risk of loss of
capital and income by investing in various types of securities and over a wide range of
industries.

7. Favorable tax status: the effectively yield a investors gets from his investments depends
on tax to which it is subject.

8. Capital growth which can be attained by reinvesting in growth securities or through

purchased of growth securities.

INVESTORS ALERTS

Dos:

Only intermediaries having specific SEBI registration for rendering Portfolio

management services can offer portfolio management services
Investors should make sure that they are dealing with SEBI authorized portfolio manager.
Investors must obtain a disclosure document from the portfolio manager broadly covering
manner and quantum of fee payable by the clients, portfolio risks, performance of the
portfolio manager etc.
Investors must check whether the portfolio manager has a necessary infrastructure to
effectively service their requirements.
Investors must enter into an agreement with the portfolio manager.
Investors should make sure that they receive a periodical report on their portfolio as per
the agreed terms.
Investors must make sure that portfolio manager has got the respective portfolio account
by an independent charted accountant every year and that the certificate given by the

28
 charted accountant is given to an investor by the portfolio manager.
In case of complaints, the investors must approach the authorities for redressal in a timely
manner.

Donts:

Investors should not deal with unregistered portfolio managers.

They should not hesitate to approach the authorities for redressed of the grievances.
They should not invest unless they have understood the details of the scheme including
risks involved.
Should not invest without verifying the background and performance of the portfolio
manager.
The promise of guaranteed returns should not influence the investors.

DIFFERENCE BETWEEN PORTFOLIO MANAGEMENT SERVICES

AND MUTUAL FUNDS

While the concept of Portfolio Management Services and Mutual Funds remains the same of
collecting money from investors, pooling them and investing the funds in various securities.
There are some differences between them described as follows:
1. In the case of portfolio management, the target investors are high net-worth investors, while in
the case of mutual funds the target investors include the retail investors.

2. In case of portfolio management, the investments of each investor are managed separately,
while in the case of MFs the funds collected under a scheme are pooled and the returns are
distributed in the same proportion, in which the investors/ unit holders make the investments.

3.The investments in portfolio management are managed taking the risk profile of individuals
into account. In mutual fund, the risk is pooled depending on the objective of a scheme.

29
4. In case of portfolio management, the investors are offered the advantage of personalized
service to try to meet each individual clients investment objectives separately while in case of
mutual funds investors are not offered any such advantage of personalized services.

BENEFITS OF CHOOSING PORTFOLIO MANAGEMENT

SERVICE INSTEAD OF MUTUAL FUNDS

While selecting a portfolio management service over mutual fund services it is found that the
portfolio manager offer some very service which are better than standardized product
services offered by the mutual fund manager. Such as:

1. Asset Allocation:
Asset allocation plan offered by portfolio management service (PMS) helps in
allocating savings of the client in terms of stock bonds or equity funds. The plan is
tailor made and is designed after a detailed analysis of clients investment goals,
saving pattern and risk taking goal.

2. Timing:
Portfolio manager preserves clients money on time. Portfolio management services
helps in allocating right amount of money in right type of saving plan at right time.
This means the portfolio manager provides their expert advice when his client should
invest his money in equity or bonds or when he should take his money out of
particular saving plan. Portfolio manager analyzes market and provides his expert
advice to the client regarding the amount of cash he should take out at the time of big
risk in stock market.

3. Flexibility:
Portfolio manager plan saving of his client according to their need and preferences.
But sometime portfolio manager can invest the clients money according to his own
preferences because they know the market very well than his client. It is his clients
duty to provide him a level of flexibility so that he can manage the investment with
full efficiency and effectiveness.

30
 4. Rules and Regulation:
In comparison to mutual funds, portfolio managers do not need to follow any rigid
rules of investing a particular amount of money in a particular mode of investment.
Mutual fund managers need to work according to the regulations set up by financial
authorities of their country. Like in India, they have to follow rules set up by SEBI

CASE STUDY

Mr. Arjit Singh is one of our companys client.

Mr. Arjit lives in Gurgaon. In his family, he has three dependents Priya Singh (spouse), Bhavita
Singh (daughter), Kushagra Singh (son).

The family has total monthly expense of Rs 65,000. He had taken Home Loan for which he has
to pay EMI of Rs 22,071. He also had taken Gold Loan as well for which he has to pay EMI of
Rs 5,000 per month.

Therefore, total EMI per month he have to pay is Rs. 27,071.

Monthly living expenses which required for maintaining familys standard of living in current
scenario is Rs 37,929.

Human Lifetime Value = (Monthly Living Expenses*12)/ One Year FD Rate

= 37929*12/0.06

= Rs 75,85,800/-

Therefore, his Human Lifetime Value comes out to be Rs 75,85,800/-

In this, the outstanding Home Loan is of Rs. 1700000 and outstanding Gold Loan is Rs 200000.

Therefore, the total outstanding liability of the family is Rs. 1900000.

31
FUTURE GOALS:

1. Daughters higher education (MBA) which costs him 7 lacs right now. But he requires
this money after 15 years. Keeping in mind the concept of time value of money and
inflation in education field, Future value would be 24 lacks for this future goal at the
inflation rate of 8%.
2. Same for the Kushagras higher education (MBA) which costs 7 lacs right now. Tenure of
the goal is 20 years, so Future value comes out to be 30 lacs.
3. Third goal is Bhavitas marriage which costs him around 20 lacs and he has no savings
for this goal. The tenure of the goal is 20 years.

Current Value for Future Goals= Rs 34,00,000

Final HLV= Gross HLV+ Total Outstanding Loans+ Current Value for

Future Goal

= 75,85,800+ 19,00,000+ 34,00,000

= Rs 1,28,85,800/-

KNOW THE RISK APPETITE:

If you had Rs.1 lacs, how would you like to invest? (Please tick in the circle provided)

Adventurous Risk Adverse

32
 Equity=90% 60% 30% 0%

Debt=10% 40% 70% 100%

He choose Equity=90% and Debt=10%, which shows his risk appetite is more as he is young.

Next, we asked him if he is comfortable in investing in Unit Linked Insurance Plan (ULIP), he
was comfortable with this plan for her daughters education.

Secondly, we asked him if he is comfortable in investing in Mutual Fund Schemes, he was

comfortable with this also.

RECOMMENDATIONS:

1. He should take a TERM PLAN of Rs1.30 Cr. (Reason- Incase of any mis-happening,
this term plan covers Mr. Arpits HLV)
2. He can take a ULIP Plan from IBDI FEDRAL LIFE INSURANCE with a monthly
contribution of Rs 6890 to fulfill the future goal of his childrens education. And he
would get additional benefits of risk cover, double accidental rider, critical illness rider
and family income benefit.
3. He can take a IBDI FEDERAL LIFE INSURANCE (Endowment Plan)of annual
contribution of Rs 50k for his childrens education. And he would get additional benefits
of risk cover, double accidental rider, critical illness rider and family income benefit.

33
 CHAPTER 2
INTRODUCTION TO COMPANY

34
ABOUT THE COMPANY
Established in: 2006

Managing Director: Ms. Priya Singh

AUM: 150 Crores (Approx.)

Customer Base: More Than 2000 Customers

Branch Network: 4 (Delhi, Ghaziabad, Mumbai, Patna)

Associated With: All Mutual Fund Companies, IBDI Federal life insurance,

Area of Operation: Portfolio Management, Financial Planning, HR Placement,

Taxation, Accounting

BS Kaiser Consultancy Pvt. Ltd. is a well diversified group having engaged in the business of
Financial Planning, Portfolio Management, Corporate Training, HR Sourcing and distribution of
various Financial Products. The group has started it journey in the year 2006 and within 9 years
the group has emerged as a one of the fasted growing company in India. BS Kaiser Consultancy
Pvt. Ltd. is a well diversified group having engaged in the business of Financial Planning,
Portfolio Management, Corporate Training, HR Sourcing and distribution of various Financial
Products. The group has started it journey in the year 2006 and within 9 years the group has
emerged as a one of the fasted growing company in India.

35
BS Kaiser Consultancy Pvt. Ltd. is a leading financial services company offering innovative,
customized and integrated financial solutions. BS Kaiser Consultancy Pvt. Ltd. is a one-stop
solution for investment banking, wealth management, portfolio management, stock broking,
foreign exchange, travel , lending, infrastructure and real estate advisory services. Being a full
service financial institution, we offer compelling cross-selling opportunities. Our culture fosters
world-class Investment Advisory and Financial Planning services for clients and maximizes
value for stakeholders.

BS Kaiser Group is having an experience of nearly 9 years of in helping people protect and grow
their wealth. The group has started its journey in 2006 with its first consultancy firm Kaizen
Financial Consultancy Pvt. Ltd. We help our customer to secure their DREAMS. We believe in
long term relationship with the customer and our deep personal relationships with clients that
truly sets us apart.

VISION MISSION AND VALUES OF BS KAISER

VISION:

To be the leading provider of wealth management, protection and retirement solutions that meets

36
the needs of our customers and adds value to their lives.

MISSION:

To continually strive to enhance customer experience through innovative product offerings,

dedicated relationship management and superior service delivery while striving to interact with
our customers in the most convenient and cost effective manner. To be transparent in the way we
deal with our customers and to act with integrity. To invest in and build quality human capital in
order to achieve our mission.

VALUES:

- Transparency: Crystal Clear communication to our partners and stakeholders.

- Value to Customers: A product and service offering in which customers perceive value.

- Rock Solid and Delivery on Promise: This translates into being financially strong, operationally
robust and having clarity in claims.

- Customer-friendly: Advice and support in working with customers and partners.

- Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders

and the community at large.

SERVICES PROVIDED BY BS KAISER

1. Financial Planning

37
Financial Planning is a relevant and customer centric approach for matching cash flows to meet
an individuals life goals. Today in most of the developed countries it is the prevalent approach
of investment advisory. At BS Kaiser, as a financial planner we provides integrated solutions and
value based advice to our customers. Our focus is on need based advice by identifying financial
goals of our clients arising at different stages of clients life.

Financial Planning service is a combination of the following services:

Insurance Planning

Retirement Planning

Investment Planning

Tax Planning & Estate Planning

Comprehensive Financial Planning takes into account the clients current situation, his dreams,
aspirations and life stage objectives, translating these objectives into financial goals, and
chalking out a strategy to help the client meet those goals, by taking advantage of the available
Tax benefits.

This would also involve implementation and monitoring of the strategies chalk out, if the scope
of agreement between the Financial Planner and Client so demands, So that the Clients
DREAMS should be protected.

Always remember, most of the Financial Planners are Investment Advisers but all Investment
Advisers are not Financial Planner.

As a financial planner we value your DREAMS. Thats why WE CARE FOR YOUR
DREAMS

38
 2. Corporate Trainings

BS Kaiser Consultancy Pvt. Ltd. has also expanded their wings in the field of Corporate
Training. The Company is one of the fastest growing corporate training companies in India. We
believe in positively affecting people by inspiring them in their personal, social and professional
environments. In doing so, we renew their respect for themselves and for each other, and give
them a new take on their values,
beliefs and perception. We are committed to help corporate companies, NGOs and education
institutes harness the Human Resource Management function as a strategic partner in business
success and growth with a range of corporate training, learning and development activities and
initiatives in India,
including a host of path-breaking proprietary tools After conducting a thorough need assessment
of a company, we offer customized corporate training solutions that bring about positive and
measurable changes in management behavior, attitudes and skills at all levels of a corporate
company in India.
Going beyond companies, BS Kaiser initiates contact with corporate people when they are at
their crucial stages of life, by running various corporate training programs for professional

39
engineering and management companies in India. All our management training interventions
carry the distinct flavor of experiential training and looking beyond the classroom. We focus on
interactive corporate training and learning experiences and facilitate change within an
organization and individual context. Our aim is to add meaning to companies through people
development initiatives in India. We are constantly evolving in our corporate and management
training methodologies, tools and techniques. For this purpose, our highly qualified team spends
a large part of their time on researching and upgrading their corporate training skill sets and
knowledge.

3. Tax Planning

Tax Planning involves planning in order to avail all exemptions, deductions and rebates provided
in Act. The Income Tax law itself provides for various methods for Tax Planning, Generally it is
provided under exemptions u/s 10, deductions u/s 80C to 80U and rebates and reliefs. Some of
the provisions are enumerated below:

* Investment in securities provided u/s 10(15). Interest on such securities is fully exempt from
tax.

*Exemptions u/s 10A, 10B, and 10BA

*Residential Status of the person

*Choice of accounting system

*Choice of organization.

For availing benefits, one should resort to bonafide means by complying with the provisions of

40
law in letter and in spirit.

Why Every Person Needs Tax Planning?

Tax Planning is resorted to maximize the cash inflow and minimize the cash outflow. Since Tax
is kind of cost, the reduction of cost shall increase the profitability. Every prudence person, to
maximize the Return, shall increase the profits by resorting to a tool known as a Tax Planning.

How is Tool of Tax Planning Exercised ?

Tax Planning should be done by keeping in mine following factors :

1. The Planning should be done before the accrual of income,

2. Tax Planning should be resorted at the source of income,

3. Residential Status of a person,

4. Tax Planning should be started in the beginning of financial year.

4. Mutual Funds

Mutual Funds are among the hottest favorites with all types of investors. Investing in mutual
funds ranks among one of the preferred ways of creating wealth over the long term. In fact,
mutual funds represent the hands-off approach to entering the equity market. There are a wide
variety of mutual funds that are viable investment avenues to meet a wide variety of financial
goals.
Advantages of Mutual Funds:

41
1. Professional Management

2. Diversification

3. Convenient Administration

4. Return potential

5. Low cost

6. Liquidity

7. Transparency

8. Flexibility

9. Choice of schemes

10.Well regulated

11.Tax benefits

5. Life Insurance

42
We always want the best for our family and life is full of uncertainties. There is an IF in LIFE.
Hence planning for the contingencies and taking concrete steps to secure our familys future is of
utmost importance. For there is no way to ascertain as to when one might lose the ability to
provide for them due to disability or the sudden loss of life.
Insurance Planning is one of the most important pillars of Financial Planning. This is because
Life Insurance is the only tool which can fulfill financial commitments in case of untimely death
of the bread earner of the family. Thus having an appropriate life cover is important.

Why Insurance Planning is required?

* Increasing liabilities,

* Nuclear family structure,

* Increasing lifestyle diseases,

* Loans & Liabilities

How much Life Cover should one take?

Calculating how much life insurance you need is one of the most important financial decisions
you will ever make. It should never be an isolated decision depending only on how much of a
premium you can afford.

Life Insurance needs can be calculated in the following methods:

Income Replacement Value (Rule of Thumb)

This is one of the basic methods of insurance calculation and is based on your current annual
income.

Insurance needs = annual income * number of years left for retirement.

Let's say your annual income is Rs 5,00,000. And you are 45 years old with 15 more years for

43
retirement.

In this case your insurance cover equals Rs 5,00,000 * 15 = Rs 75,00,000.

At BS Kaiser we are associated with the IRDA approved Insurance Broker to provide and
unbiased Product selection for our customer.

SWOT ANALYSIS OF BS KAISER

SWOT analysis is a strategic planning method used to evaluate the strengths,

weaknesses/limitations, opportunities and threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or the project and identifying the
internal and external factors that are favorable and unfavorable to achieve that objective

STRENGTHS

Large pool of technically skilled manpower with in depth knowledge and understanding
of the market.
The company also provides innovative products to cater to different needs of different
customers.
Dedicated workforce aiming at making a long-term career in the field.
Strong and well spread network of qualified intermediaries and sales person.
Strong capital and surplus reserve.

44
 Low management expenses and administrative costs.
BS Kaiser leverages on the strong distribution network of its promoters and advisors.
Finance department helps the organization to keep a track on the administration cost and
all the other expenses.

WEAKNESSES

Customer service staff needs training due to changing human behavior.

Product awareness is low in the market.
Management cover insufficient.
Sectored growth is constrained by low unemployment levels and competition for staff.
Low customer confidence on the private players.
Centralization in the organization, management decisions are taken by top authority
which leads to significant delays in decisions.
A centralized administrative system gives way to inequity through the instigation of
excessive regulations or strict conformity to official norms which is redundant or
bureaucratic and that hinders decision-making and delays work.

OPPORTUNITIES

Insurable population: According to IRDA only 10% of the population is insured which
represent around 30% of the insurable population. This suggests more than 300m people,
with the potential to buy insurance, remain uninsured.
International companies will help in building world class expertise in local market by
introducing the best global practice.
Could extend to overseas broadly.
New specialist applications.
Could seek better customer deals.
Fast-track career development opportunities on an industry-wide basis.
An applied research Centre to create opportunities for developing techniques to provide
added-value services.
There will be inflow of managerial and financial expertise from the worlds leading
insurance markets. Further the burden of educating consumers will also be shared among
many players.

THREATS

Big public sector insurance companies like Life Insurance Corporation (LIC) of India,

45
 National Insurance Company Limited, Oriental Insurance Limited, New India Assurance
Company Limited and United India Insurance Company Limited. People trust and go to
them more.
Legislation could impact and Great risk involved.
Very high competition prevailing in the industry.
Vulnerable to reactive attack by major competitors
Lack of infrastructure in rural areas could constrain investment
People prefer short term investments rather than insurance.

CHAPTER- 3

46
 REVIEW OF LITERATURE

FINANCIAL PLANNING:

Zhou (2003) conducted a study on Post-Retirement Financial Planning. The finding were
optimal allocation strategies vary in different situations and are not trivial or intuitive, The
buyannuity-reinvest strategy has potential to accumulate more estate than a pure investment
strategy, catastrophic illness coverage is a necessary piece of any optimal asset allocation
strategy, a life annuity is always an important component in optimal strategies. Berstein (2003)
concluded three essays as many employees are spending far more and saving far less than they
should, while others are under-spending and over-saving. Overton (2007) identified
foundational theories of financial planning and the theories applications and disciplines of
origin. In this sequential exploratory mixed methods were used. Gounaris (2004) concludes with
a model for a financial therapy seminar with couples. Outcomes were Financial Planning
services will be most effective if couples have a thorough understanding of their psychological
relationship with money, the role money plays in their marriage, and the psychological forces
that operate on actual financial decisionmaking.

Tift (2007) conducted a qualitative phenomenological study using focus group interviews to
explore the lived experiences of 61 baby boomers regarding their financial planning for

47
anticipated health needs in retirement. Findings include seven core themes: (a) influence of
family experiences, (b) delayed retirement, (c) influence of physical or cognitive health, (d)
uncertain future of government programs, (e) procrastination of financial planning, (f) uncertain
future of health care, and (g) distrust of government involvement. Jagolinzer (Apr 1995) used a
3-fund approach is used. This approach of income allocation should assist those entering into, or
already committed to, a marriage or partnership-living arrangement, in thinking about, discussing
and planning for their financial priorities. The accountant can help by introducing the system,
assisting the partners in developing the fund categories, providing input to the necessary
allocation of monies to each, and possibly acting as an ongoing facilitator for the whole process.
Cutler (Mar 2003) dealt with the traditional image of retirement financial security as it is a
threelegged stool: Social Security, employer pensions, and personal savings/investments. Some
analysts have identified a fourth leg, that of post-retirement wages. There is also discussion about
a fifth leg: the costs of health care and long-term care. Using reverse mortgages to take
advantage of home equity is discussed.

Potts (2001) took the primary objective of this study as to gain useful insights about
conditions that will lead to successful retirement for family business owner-managers. The blend
of financial and nonfinancial issues suggests that financial planners have a real awareness of the
unique context in which they are operating. The unraveling of the complex issues surrounding
the retirement of family business owner-managers represents a real challenge for the CEOs,
financial planners and academicians. Klapper and Panos (2011), did the examination of the
relationship between financial literacy and retirement planning in Russia. It was found that only
36% of respondents in our sample understand interest compounding and only half can answer a
simple question about inflation. In a country with widespread public pension provisions, findings
were that financial literacy is significantly and positively related to retirement planning involving
private pension funds.

Alcon (1999) states that Adequate income in retirement is especially difficult for women to
achieve because of traditional sex biases in the workplace, the complexity of womens roles,

48
their longer life expectancy, lower pension self-coverage, inadequate survivors benefits and a
long tradition of women not managing the finances. Mid-life and older women are at a special
disadvantage. Kennickell et al (1997) surveyed A Focus Group; the group consisted of eight
ISSN 2348 - 8891 Altius Shodh Journal of Management & Commerce individuals with relatively
high income and wealth. The savings behavior of such people is of interest partly due to their
large contribution to total personal saving. The participants expressed concerns about how their
circumstances will change as they age, and about uncertainties in income and health. While these
concerns are consistent with theories emphasizing life-cycle and precautionary saving, the idea
that saving involves self-control was also mentioned repeatedly.

PORTFOLIO MANAGEMENT

Portfolio Management is the management of selected groupings of investments using integrated

strategic planning, integrated architectures and measure of performance, risk management
techniques, transitions plans, and portfolio investment strategies.

MARKOWITZ introduced the concept of an efficient portfolio. An efficient portfolio is

one which has the smallest attainable portfolio risk for a given level of expected return.

According to MAGINN AND TUTTLE ,Portfolio management is a process, integrating a

set of activities in a logical and orderly manner. It is a continuous, systematic, dynamic and
flexible concept, and it extend s to all portfolio investment including real estate, gold and other
real assets

According to INVESTOPEDIA,

In the case of mutual and exchange- traded funds ( ETFs), there are two forms of portfolio
management; passive and active. Passive management simply tracks a market index, commonly
referred to as indexing or index investing.

49
Active management involves a single manager, co-managers, or a team of managers who attempt
to beat the market return by actively managing a funds portfolio through investment decisions
based on research and decisions on individual holdings. Closed ends funds are generally
actively managed.

CHAPTER-4
RESEARCH METHODOLOGY

50
NEED FOR THE STUDY

BS KAISER Company Limited division was started in December 2000. Hence the company
wanted to know to what extent the people were aware of BS KAISER Company and their
perception towards life, pension & retirement insurance products. Hence this research was
undertaken. The company wanted to assess whether the present level of marketing efforts is
sufficient or not and the medium of communication which was most effective in creating
awareness. Hence its need for this research.

OBJECTIVES

Primary Objective

To assess the level of awareness of the brand BS KAISER Company in Laxmi Nagar.

Secondary Objectives

51
 To assess the level of awareness & customer satisfied about different types of insurance
and the companies operating in the general insurance domain.
To assess the relative importance of life insurance among different insurance products.
To assess the extent of the need for life insurance as perceived by the public and their
reasons.
To estimate the degree of brand recall achieved through logo, slogan and Company name.
To assess the role of different media in generating awareness about the brand BS
KAISER.

SCOPE OF THE STUDY : This study undertaken for BS KAISER aims to study and
understand the level of awareness of the company and the market potential for life insurance
among the individuals residing in Laxmi Nagar

This has been done by preparing the questionnaire which contains questions put forth to the
prospective individuals, which would help in analyzing the profile and individuals perception
towards life insurance, factors influencing the individuals in going for life insurance, and
awareness of various schemes and insurance companies.

This study would help in determining the future market potential for life insurance. The study
would also help BS KAISER to direct their marketing efforts by identifying customer preference
and also the role of different media in creating awareness

A proper research Methodology is imperative to derive meaningful inferences and

conclusions from the study. The Methodology followed for this study is as follows.

RESEARCH DESIGN

In this market survey, the design used is descriptive in nature. The information is collected
from the individuals and analyzed with the help of different statistical tools for describing the
relationship between various types of variables pertaining to market potential for life Insurance.
Moreover Cross table Analysis has been done for multivariate data and information has been
obtained to meet the objectives of the study.

52
DATA

Nature of Data
Both primary and secondary data are used in this study in order to meet the requirements of the
objectives. Under the study primary data was collected by using a Questionnaire.

SOURCE OF DATA

Primary Source: are those, which are collected afresh and for the first time, and thus happen
to be original in character. This method was used by means of Personal Interview, where in
researcher had face-to-face contact with the persons. The reason behind choosing this method
was to have detailed information on the subject. It also provided opportunity for selecting the
sample for interview. The interview conducted were a mixture of structured and unstructured
interviews. Scope was kept open for detailed discussion at the discretion of the interviewee.
Where there was a time crunch a structured procedure was followed wherein predetermined
questions were put forward. The other method was adopted in primary data collection was
Questionnaires. This was used to assist a more structured form of information. The information
thus obtained was standard and in a more unbiased form. It assisted to collect data from a large
sample size. The pattern adopted was a general form of questionnaire. Questions are in
dichotomous s(yes or no answers), multiple choice and open ended question. Open ended
questions are restricted due to the difficulty faced in analysing. The questioner was kept short
and to the point.

Secondary Source: means data that are already available i.e., the data which is already
collected and analysed by other. To get a better understanding and to have a larger exposure on
the subject this method was used. Methods use was data available on worldwide web, articles in
newspapers, financial industry reports, Financial Planning board of India reports and article,

53
reports published by Government of India, etc. Support was also provided by the project guide
by giving inputs from his years of experience.

METHOD OF DATA COLLECTION

Structured Questionnaire method is used as an instrument for collecting information from the
individuals. A Pilot study was conducted based on which a few changes were made in the
Questionnaire.

SAMPLING
Since the population of consumers of general Insurance is large in number, researcher was
unable to collect information from all individuals due to limitation of time. So part of the
population is taken for analyzing and generating the findings.

SAMPLING METHOD

Cluster sampling method is used. The area to be surveyed was divided into blocks. A number of
blocks were chosen at random. Every household in the chosen block was surveyed.

SAMPLE DESIGN

Sample design was based on principles of sample survey. Sample was decided on socio
demographic factors such as income and age group. The number of respondent were restricted to
50 due to lack of time. The various parameters on which the research was to be conducted are:

Awareness of financial Planning

Alignment of life goals and financial goals

Investment distribution in various asset classes

Decision influencing investment

54
TOOLS USED

The data has been analyzed mainly by using the following methods, namely. Cross Tabulation
and Percentage method supplemented by appropriate charts. Preference of the Respondents for
different insurance products has been analyzed using Ranking method.

Percentage Analysis
This is a univariate analysis where the percentage of a particular factor with different categories
is calculated, in order to help one get fair an idea regarding the sample and thereby that of the
population.

Cross Tabulation
While percentage analysis is applicable to single variable, cross tabulations help in identifying
relationship between different variables.

Ranking method

This type of analysis is particularly useful when the purpose of the question is to identify the
preferences of the sample among different choices.

The respondents indicated the importance they assign to different types of policies. The ranking
was in the order of 1 for most important and 5 for the least important. While doing the
analysis the first rank was given a weightage of 5 and the least rank was given the weightage of 1

The rank assigned by all the respondents was cumulated using the weightage. Accordingly the
type of policy with the larger cumulative weightage was ranked number 1 and so on.

Questionnaire
The questionnaire includes both open ended and closed ended questions with multiple choices;
Open-ended questions enable wide range of responses. This enables the respondent to express his
views in his own words. However this is difficult to tabulate and analyze.

55
Close-ended questions offer a limited choice of response .Respondents find these easier to
complete. Close-ended questions can also be tabulated and analyzed more easily.

56
 CHAPTER 5
ANALYSIS AND INTERPRETATION

57
PRIMARY RESEARCH:
QUESTIONNAIRE ANALYSIS

GENDER

o MALE
o FEMALE

Total

Female
40% Male

60%

FIGURE 4

AGE

21 YEARS- 30 YEARS
31 YEARS- 40 YEARS
41 YEARS- 50 YEARS
50 YEARS AND ABOVE

58
 Total

21 Years- 30 Years
7% 2% 31 Years- 40 Years
11% 41 Years- 50 Years
51Years and Above

81%

FIGURE 5

OCCUPATION

o BUSINESS
o SERVICE
o STUDENT
o RETIRED
o OTHER

Total

9% Business
2% intern
Service
44%
Student

46%

FIGURE 6

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INTERPRETATION

From the above diagram, we came to know that most of the investors are service people.

ANNUAL INCOME

o Upto 5 Lakh
o 5 lakh- 10 Lakh
o 10 Lakh- 15 Lakh
o 15 lakh and Above

Total

10 Lakh- 15 Lakh
7%
15 lakh and Above
5%
5 lakh- 10 Lakh
26% Upto 5 Lakh
61%

FIGURE 7

MARITAL STATUS

o MARRIED
o UNMARRIED

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