A REPORT ON WEALTH MANAGEMAENT APPROACH OF STANDARD CHARTERED BANK IN INDIA

SUBMITTED BY: (VIDUSHI DORA) (PGB1042)

STANDARD CHARTERED BANK DEHRADUN

A REPORT ON
WEALTH MANAGEMENT APPROACH OF SCB IN INDIA
SUBMITTED BY: (VIDUSHI DORA) (PGFB1042) A report submitted in the partial fulfillment of the requirement of MBA program of Jaipuria Institute of Management)

COMPANY GUIDE: GUIDE:

Mr. NITIN AVASTHI Branch Manager DEHRADUN

FACULTY
Dr. SWATI AGARWAL Faculty Member JIM, Noida.

AC KNOWL E DG E MENT
The summer project at Standard Chartered Bank offered both a learning experience, as well as, a glimpse into the daily management functions of an organization. During the tenure of this project, I was fortunate to have interacted with people, who in their own capacities have encouraged and guided me. For their unstinted and invaluable guidance, I wish to express my heartfelt gratitude to my guides Mr. Nitin Avasthi, StanC Bank without whom this project could not have been completed successfully. For sharing his insights and knowledge, derived from the years of experience in particular areas of expertise, I would like to express my deepest gratitude towards Mr. Vikas Mohan (Branch Manager, Dehradun) who has shared his experience to increase my knowledge and encouraged me at every stage. I am also highly grateful to my faculty guide Dr. Swati Agarwal, for her valuable inputs kind support and encouragement throughout this time. Besides I am grateful to my seniors and all members of the HRD, sales and office team for their co-operation and good wishes.

Executive Summary Standard Chartered Bank was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered bank of India, Australia and China, founded in 1853. This project deals with the analyzing the wealth management business for Standard Chartered Bank, Dehradun. I have started off with brief introduction of StanC, its history, & its operation in India. This constitutes as major part of literature survey of this project. Thereafter, I have discussed an overview of wealth management process and strategic asset allocation. I classified different types of investor, as per their risk-return profile & prepared ideal investment mix. (Psychological analysis of investors mind) in this I have classified the decision making into six sequential points. After study on investor decision making, I have done analysis of consumer banking & finding potential in Dehradun and nearby region In this I have surveyed through in various elite clubs, hospital etc. along with their contact and details. In the end I have made some conclusions & recommendations. Sample design: Stratified random sampling. Data collection: Survey Method Questionnaire

Table of content 1. 2. 3. 4. 5. Certificate from the Mentor Summer Internship Completion Certificate from the Organization Acknowledgement Executive summary Contents: these are as follows:

Chapter-1 Bank 1.1. History. 1.2. Definition. 1.3. Banking. 1.4. Risk and Capital 1.5. Banks in the Economy. 1.6. Regulation 1.7. Types of banks Chapter-2 About of SCB: 2.1. About the bank 2.2. History of the bank 2.3. Values of the bank 2.4. Key milestones in development 2.5. Board of SCB Chapter-3 SCB in INDIA: 3.1. Investment Advisory Services Chapter-4 Research Design: 4.1. Research Topic. 4.2. Sampling Used. 4.3. Data Used In Study. 4.4. Tools And Techniques Used In Study Chapter-5 Literature Review: 5.1. Wealth Management. 5.2. Strategic asset allocation. 5.3. Types of investor.
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5.4. 5.5. 5.6. 5.7.

Ideal investment mix. Fund selection process. Investor decision making process. Criterion for evaluation of SCB.

Chapter-6 Data Analysis and Interpretation: 6.1. Diagrammatical Representation of Data.

Chapter-7 Research Findings and Recommendations.

References: Bibliography Appendices: Questionnaire

Chapter 1: About banks

History
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities: A central bank circulates money on behalf of a government and acts as its monetary authority by implementing monetary policy, which regulates the money supply.

A commercial bank accepts deposits and pools those funds to provide credit, either

directly by lending, or indirectly by investing through the capital markets. Within the global financial markets, these institutions connect market participants with capital deficits (borrowers) to market participants with capital surpluses (investors and lenders) by transferring funds from those parties who have surplus funds to invest (financial assets) to those parties who borrow funds to invest in real assets. A savings bank (known as a "building society" in the United Kingdom) is similar to a savings and loan association (S&L). They can either be stockholder owned or mutually owned, in which case they are permitted to only borrow from members of the financial cooperative. The asset structure of savings banks and savings and loan associations is similar, with residential mortgage loans providing the principal assets of the institution's portfolio.

Because of the important role depository institutions play in the financial system, the banking industry is highly regulated, and government restrictions on financial activities by banks have varied over time and by location. Current global bank capital requirements are referred to as Basel II. In some countries, such as Germany, banks have historically owned major stakes in industrial companies, while in other countries, such as the United States, banks have traditionally been prohibited from owning non-financial companies. In Japan, banks are usually the nexus of a cross-share holding entity known as the "keiretsu". In Iceland, banks followed international standards of regulation prior to the recent global financial crisis that began in 2007. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472.

Definition
Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as: conducting current accounts for his customers paying cheques drawn on him, and collecting cheques for his customers

"Banking business" means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).

"Banking business" means the business of either or both of the following: 1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheques drawn by or paid in by customers

Banking
Standard activities
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and automated teller machine (ATM). Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too

Channels
Banks offer many different channels to access their banking and other services: ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. Some ATMs provide additional services.

A branch is a retail location

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Call center

Mail: most banks accept check deposits via mail and use mail to communicate to their customers, e.g. by sending out statements Mobile banking is a method of using one's mobile phone to conduct banking transactions

Online banking is a term used for performing transactions, payments etc. over the Internet

Relationship Managers, mostly for private banking or business banking, often visiting customers at their homes or businesses

Telephone banking is a service which allows its customers to perform transactions over the telephone without speaking to a human

Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a videoconference enabled bank branch.

Products
Retail

Business loan Cheque account Credit card Home loan Insurance advisor Mutual fund Personal loan Savings account

Wholesale

Capital raising (Equity / Debt / Hybrids) Mezzanine finance 11

Project finance Revolving credit Risk management (FX, interest rates, commodities, derivatives) Term loan

Risk and capital

Banks face a number of risks in order to conduct their business, and how well these risks are managed and understood is a key driver behind profitability, and how much capital a bank is required to hold. Some of the main risks faced by banks include: Credit risk: risk of loss arising from a borrower who does not make payments as promised.

Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).

Market risk: risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors.

Operational risk: risk arising from execution of a company's business functions.

The capital requirement is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted.

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Banks in the economy

Economic functions

The economic functions of banks include: 1. Issue of money, in the form of banknotes and current accounts subject to Cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the payee may bank or cash. 2. Netting and settlement of payments banks act as both collection and paying agents for customers, participating in inter bank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economize on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them. 3. Credit intermediation banks borrow and lend back-to-back on their own account as middle men. 4. Credit quality improvement banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position. 5. Maturity transformation banks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit quality than most other borrowers, banks can do

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this by aggregating issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes), maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets).

Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.

Types of retail banks

Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses. Community banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners. Community development banks: regulated banks that provide financial services and credit to under-served markets or populations. Credit unions: not-for-profit cooperatives owned by the depositors and often offering rates more favorable than for-profit banks. Typically, membership is restricted to employees of a particular company, residents of a defined neighborhood, members of a certain labor union or religious organizations, and their immediate families. Postal savings banks: savings banks associated with national postal systems.

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Private banks: banks that manage the assets of high net worth individuals. Historically a minimum of USD 1 million was required to open an account; however, over the last years many private banks have lowered their entry hurdles to USD 250,000 for private investors. Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreachand by their socially responsible approach to business and society. Building societies and Landesbanks: institutions that conduct retail banking. Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments. A Direct or Internet-Only bank is a banking operation without any physical bank branches, conceived and implemented wholly with networked computers.

Types of investment banks

Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions. Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.

Both combined

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Universal banks, more commonly known as financial services companies, engage in several of these activities. These big banks are very diversified groups that, among other services, also distribute insurance hence the term bancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying that both banking and insurance are provided by the same corporate entity.

Other types of banks

Central banks are normally government-owned and charged with quasi-regulatory responsibilities, such as supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis. Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several well-established principles based on Islamic canons. All banking activities must avoid interest, a concept that is forbidden in Islam. Instead, the bank earns profit (markup) and fees on the financing facilities that it extends to customers.

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Chapter 2: About standard chartered bank

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About the bank

Standard Chartereds principal activity is providing banking and other financial services. The Groups operation are carried out through two divisions, Consumer banking provides credit cards, personal loans, mortgages, deposit taking and wealth management services to individuals and small and medium-sized enterprises. Wholesale Banking provides corporate and institutional clients with services in trade finance, cash management, lending, custody, foreign exchange, debt capital markets and corporate finance. Standard faces different changes in the political, economic, social and technological spheres that affect its businesses. In the political arena, Standard Chartered face changes in government regulations and policies in countries where it operates. The economic downturn that was experienced worldwide also affects the company. Changing consumer demands because of changes in demography and lifestyle affect the organization. Technological developments make business operations more efficient. Standard Chartered PLC, listed in both the London and Hong Kong stock exchanges, ranks among the top 25 companies in the FTSE 100 by market capitalization. The Bank has grown substantially in recent years, primarily as a result of organic growth, supplemented by acquisitions. Standard Chartered aspires to be the best international bank for its customers. The Bank derives more than 90 percent of its operating income and profits from Asia, Africa and the Middle East, generated from its Wholesale and Consumer Banking Business. The Group has over 1,600 branches and outlets located in over 70 countries.

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History
Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods between Europe, Asia and Africa. The Chartered Bank Founded by James Wilson following the grant of a Royal Charter by Queen Victoria in 1853.

Chartered opened its first branches in Mumbai (Bombay), Kolkata and Shanghai in 1858, followed by Hong Kong and Singapore in 1859.

Traditional trade was in cotton from Mumbai (Bombay), indigo and tea from Kolkata, rice from Burma, sugar from Java, tobacco from Sumatra, hemp from Manila and silk from Yokohama.

Played a major role in the development of trade with the East which followed the opening of the Suez Canal in 1869 and the extension of the telegraph to China in 1871.

In 1957 Chartered Bank bought the Eastern Bank together with the Ionian Bank's Cyprus Branches. This established a presence in the Gulf.

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The Standard Bank Founded in the Cape Province of South Africa in 1862 by John Paterson. Commenced business in Port Elizabeth, in January 1863.

Was prominent in financing the development of the diamond fields of Kimberley from 1867 and later extended its network further north to the new town of Johannesburg when gold was discovered there in 1885.

Expanded in Southern, Central and Eastern Africa and, by 1953, had 600 offices.

In 1965, it merged with the Bank of West Africa, expanding its operations into Cameroon, Gambia, Ghana, Nigeria and Sierra Leone. From the early 1990s, Standard Chartered has focused on developing its strong franchises in Asia, Africa and the Middle East. It has concentrated on consumer, corporate and institutional banking and on the provision of treasury services - areas in which the Group had particular strength and expertise. Since 2000 the Bank has achieved several milestones with a number of strategic alliances and acquisitions, which have extended the customer and geographic reach and broadened the product range that Standard Chartered offers.

Principles and values

Leading by example to be the right partner for its stakeholders, the Group is committed to building a sustainable business over the long term that is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. It employs over 75,000 people, nearly half of whom are women, The Group's employees are of 125 nationalities, of which about 70 are represented among senior management.

Standard chartered stands for

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Strategic intent To be the world's best international bank

Leading the way in Asia, Africa and the Middle East

Brand promise Here for good Values

Courageous Responsive International Creative Trustworthy

Approach Participation Focusing on attractive, growing markets where we can leverage our relationships and expertise

Competitive positioning

Combining global capability, deep local knowledge and creativity to outperform our competitors

Management Discipline

Continuously improving the way we work, balancing the pursuit of growth with firm control of costs and risks Commitment to stakeholders Customers Passionate about our customers' success, delighting them with the quality of our service

Our People Communities Investors Regulators

Helping our people to grow, enabling individuals to make a difference and teams to win

Trusted and caring, dedicated to making a difference

A distinctive investment delivering outstanding performance and superior returns

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Exemplary governance and ethics wherever we are

Key milestones in development

Date Jun 2010 May 2010 Jul 2009 Feb 2009 Dec 2008 Dec 2008 Nov 2008 May 2008 Feb 2008 Feb 2008 Location China India Africa Asia India Taiwan Brazil Vietnam South Korea Global The Bank becomes an investor in Agricultural Bank of China, one of the top commercial banks in China We launched our first ever Indian Depository, allowing investors in India to participate in our growth Standard Chartered completes acquisition of First Africa Holdings Limited Standard Chartered completes acquisition of Casenove Asia Standard Chartered increases its investment in UTI Securities to 74.9% Standard Chartered acquires the 'good bank' portion of Asia Trust and Investment Corporation Standard Chartered announces plans to acquire Lehman Brothers team in Brazil Standard Chartered announces raising strategic stake in Vietnam's Asia Commercial Bank to 15% Standard Chartered to acquires South Korea's Yeahreum Mutual Savings Bank Standard Chartered completes acquisition of American Express Bank, a wholly owned subsidiary of American

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Express Company, with operations in 47 countries Jan 2008 South Korea India Global Standard Chartered First Bank Korea Ltd acquires an 80% stake in South Korea's A Brain, a funds administration company Standard Chartered acquires a 49% strategic stake in India's UTI Securities, a leading local broking firm. Standard Chartered completes acquisition of Harrison Lovegrove, a leading global oil and gas M&A advisory boutique Standard Chartered acquires Pembroke, an aircraft leasing, financing and management firm Launched tender offer for 100% in Hsinchu International Bank (USD1.2bn) Acquisition of 95.37% Union Bank (USD487m) Acquisition of 26% stake in PermataBank by the consortium of Standard Chartered Bank & PT Astra International Tbk (USD193m). Total stake held in PermataBank by consortium today is 89%. Acquisition of 25% in First Africa Group Holdings Ltd

Jan 2008 Dec 2007

Oct 2007 End 2006 Sep 2006 Sep 2006

Global Taiwan Pakistan Indonesia

Jun 2006

Africa

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Board of SCB
Chairman

John Peace
Chairman

In 2002 John was appointed Chairman of Burberry in advance of its successful flotation. GUS demerged its remaining businesses in 2006 and he became Chairman of Experian.

Executive Directors

Peter Sands
Group Chief Executive Officer (CEO)

Peter Sands was appointed Group Chief Executive of Standard Chartered PLC in November 2006. Immediately prior to this Peter had been Group Finance Director of Standard Chartered PLC since his appointment as a Group Executive Director in May 2002.

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Richard Meddings
Group Finance Director

Richard Meddings was appointed as Group Finance Director of Standard Chartered PLC in November 2006, having joined the Board as a Group Executive Director in November 2002. He is based in London and is responsible for Finance, Group Corporate Treasury, Risk and Group Corporate Development.

Steve Bertamini
Group Executive Director and CEO, Consumer Banking

Steve Bertamini joined Standard Chartered as Group Executive Director & Chief Executive Officer, Consumer Banking on 19 May 2008 and was appointed to the Board of Standard Chartered PLC on 1 June 2008.

Mike Rees
Group Executive Director and CEO, Wholesale Banking

Mike Rees was appointed to the Board of Standard Chartered PLC on 4 August 2009. He is based in London and is Chief Executive Officer, Wholesale Banking.

Jaspal Singh Bindra

Group Executive Director and CEO, Asia

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Jaspal Singh Bindra, Group Executive Director and a member of the Board of Standard Chartered PLC, is based in Hong Kong as Chief Executive Officer, Asia. He was appointed to the Board of Standard Chartered PLC on 1 January 2010.

Independent Non-Executive Directors

Richard Delbridge
Independent Non-Executive Director

Richard Delbridge joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 1 January 2010.

Jamie Dundas
Independent Non-Executive Director

Jamie Dundas joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 15 March 2004.

Val Gooding
Independent Non-Executive Director

Val Gooding was appointed as an Independent Non-Executive Director of Standard Chartered PLC on 1 January 2005.

Rudy Markham
Independent Non-Executive Director

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Rudy Markham joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 19 February 2001. He is also Senior Independent Director.

Ruth Markland
Independent Non-Executive Director

Ruth Markland joined the Board of Standard Chartered PLC as a Non-Executive Director on 3 November 2003.

John Paynter
Independent Non-Executive Director

John Paynter joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 1 October 2008.

Dr Han Seung-soo
Independent Non-Executive Director

Dr Han Seung-soo, KBE, former Prime Minister of the Republic of Korea joined the Board of Standard Chartered PLC as an Independent Non-Executive Director on 1 January 2010.

Paul Skinner
Independent Non-Executive Director

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Paul Skinner joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 3 November 2003.

Oliver Stocken
Independent Non-Executive Director

Oliver Stocken joined the Board of Standard Chartered PLC as a Non-Executive Director on 1 June 2004.

Simon Lowth
Independent Non-Executive Director

Simon Lowth joined the Board of Standard Chartered PLC as an Independent NonExecutive Director on 1 May 2010.

Group Company Secretary

Annemarie Durbin
Group Company Secretary

Annemarie was appointed Group Company Secretary in September 2007 and is a nonexecutive director of Fleming Family and Partners Ltd.

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Chapter 3: Investment advisory services by scb

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Investment advisory services

Investment Advisory Services are offered by many institutions which include banks as well. These services are provided to their respective clients after analysing the client's financial health, which includes various kinds of analysis of the person. Basically the client's actual net worth is calculated by deducting al\ his liabilities and major expenses. Then the person's till date investments are looked into plus the yield they'll be giving. After all these calculations, and looking at the amount of investment, the motive of the investment, what kind of returns the person wants and the age of the person, the client is accordingly advised where to invest how much amount of money.

Different Types of Investments

DEBENTURES
A debenture is a document that either creates a debt or acknowledges it. The term is used in corporate finance for a medium to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan, stock or note.

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Debentures are generally freely transferable by the debenture holder. Debenture holders have no voting rights and the interest paid to them is a charge against profit in the company's financial statements. Different types of debentures are as follows: Convertible debentures can be converted into equity shares of the issuing company after a predetermined period of time. "Convertibility" is a feature that corporations may add to the bonds they issue to make them more attractive to buyers. In other words, it is a special feature that a corporate bond may carry. As a result of the advantage a buyer gets from the ability to convert; convertible bonds typically have lower interest rates than non-convertible corporate bonds. Non-convertible debentures, which are simply regular debentures, cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them. As a result, they usually carry higher interest rates than their convertible counterparts. BONDS A bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Certificates of deposit (CDs) or commercial paper are considered to be money market instruments and not bonds. Bonds must be repaid at fixed intervals over a period of time. Different types of bonds are as follows:

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Government Bonds Municipal Bonds Corporate bonds Zero Coupon Bonds

EQUITY
Equity investments generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going concern situations.

DEBT
Debt is that which is owed; usually referencing assets owed, but the term can also cover moral obligations and other interactions not requiring money. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned. Some companies and corporations use debt as a part of their overall corporate finance strategy. Equity v/s Debt Debt Must be repaid or refinanced Equity Can usually be kept permanently

Requires regular interest payments. No payment requirements. May receive Company must generate cash flow to pay. dividends, but only out of retained earnings. Collateral assets must usually be available. No collateral required. Debt providers are conservative. They Equity providers are aggressive. They can cannot share any upside or profits. accept downside risks because they fully Therefore, they want to eliminate all share the upside as well. possible loss or downside risks. Interest payments are tax deductible. Dividend payments are not tax deductible.

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Debt has little or no impact on control of Equity requires shared control of the the company. company and may impose restrictions. Debt allows leverage of company profits. Shareholders share the company profits.

Right Mix of debt and equity

The optimal mix of debt and equity has to be tailored for each situation. This requires some sophistication in financial modeling. The trick is to prepare financial projections under different scenarios and with different assumptions. The goal is to find the debt/equity mix that provides the highest expected long-term shareholder value. Investments into companies usually require both debt and equity. The optimal ratio needs to be carefully determined for each individual situation. It is unlikely that this ratio will consist of 100% equity. If the long-term prospects are so poor that a company can never make sufficient profits to benefit from leverage then the opportunity is probably not worth pursuing. Conversely, relying on 100% debt financing often places a heavy cash drain on companies and leads to sub-optimal growth. Debt and equity financing should not be seen as substitutes for each other. Instead, they are very different in nature and complement each other. Debt needs to be repaid in cash. Equity needs to be rewarded with long-term profits. Depending on individual circumstances and opportunities the trick for each investment is to find the-best mix of both. When a banker, venture capitalist, or angel investor is considering giving you money, they will look at your debt to equity ratio. This is the amount of debt you have compared to the amount of equity you have. To lenders, this ratio is important because it tells the amount of money available for repayment in the case of default. It also shows if your business is being run in a sensible way, without too much dependence on anyone source.

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MUTUAL FUNDS
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals). The mutual fund will have a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective.

Types of mutual funds

Open-ended fund
The term mutual fund is the common name for what is classified as an open-end investment. Being open-ended means that, at the end of every day, the fund continually issues new shares to investors buying into the fund and must stand ready to buy back shares from investors redeeming their shares at the then current net asset value per share . Closed-end funds are like open end except they are more like a company which sells its shares a single time to the public under an initial public offering or "IPO.

Exchange-traded funds
A relatively recent innovation, the exchange-traded fund or ETF, is often structured as an open-end investment company. ETFs combine characteristics of both mutual funds and closed-end funds. ETFs are traded throughout the day on a stock exchange, just like closed end funds, but at prices generally approximating the ETF's net asset value. Exchangetraded funds are also valuable for foreign investors who are often able to buy and sell securities traded on a stock market, but who, for regulatory reasons, are limited in their ability to participate in traditional U.S. mutual funds.

Equity funds
Equity funds, which consist mainly of stock investments, are the most common type of mutual fund. Equity funds hold 50 percent of all amounts invested in mutual funds in the

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United States. Often equity funds focus investments on particular strategies and certain types of issuers.

Growth vs. value Funds

Another distinction is made between growth funds, which invest in stocks of companies that have the potential for large capital gains, and value funds, which concentrate on stocks that are undervalued. Value stocks have historically produced higher returns; however, financial theory states this is compensation for their greater risk. Growth funds tend not to pay regular dividends. Index funds versus Actively managed funds An index fund maintains investments in companies that are part of major stock (or bond) indexes, such as the S&P 500, while an actively managed fund attempts to outperform a relevant index through superior stock-picking techniques. The assets of an index fund are managed to closely approximate the performance of a particular published index.

Bond funds
Bond funds account for 18% of mutual fund assets. Types of bond funds include term funds, which have a fixed set of time (short-, medium-, or long-term) before they mature. Municipal bond funds generally have lower returns, but have tax advantages and lower risk. High-yield bond funds invest in corporate bonds, including high-yield or junk bonds. With the potential for high yield, these bonds also come with greater risk.

Money market funds

Money market funds hold 26% of mutual fund assets in the United States. Money market funds entail the least risk, as well as lower rates of return. Unlike certificates of deposit (CDs), money market shares are liquid and redeemable at any time.

Savings
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in a bank or pension plan. Saving also includes reducing expenditures, such as 35

recurring costs. In terms of personal finance, saving specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is higher.

Chapter 4: Research design

36

Research design
What is research design? The description of research procedure is called research design. It is simply a framework for a study that is used as a guide in collecting and analyzing the data. It consists of three parts: 1. Exploratory Research 2. Descriptive Research 3. Casual Research EXPLORATORY RESEARCH: An exploratory research focuses on the discovery of idea and is generally based on secondary data. It is preliminary investigation that does not have a

37

rigid design. This is because a researcher engaged in an exploratory study that may have to change his focus as a result of new ideas and relationship among the variables. DESCRIPTIVE RESEARCH A descriptive study is undertaken when the researcher wants to know the characteristics of certain group such as age, sex, educational level, income, and occupation etc. CAUSAL RESEARCH: A casual research is undertaken when the researcher is interested in knowing the cause and effect relationship between two or more variables. Such studies are based on reasoning along well-tested lines. This project is based on descriptive research because questionnaire is filled by the respondent of different education and age group people.

Research topic
As a part of the project a comparative analysis as well as a survey on the customers investing behavior has been conducted. For Customers Investing Behavior a survey was conducted for the same. Questions have been asked from the target respondents. DATA COLLECTION What is data collection? The task of data collection begins after a research problem has been defined and research design/plan chalked out. Data is generally of two types: 1. Primary data 2. Secondary data
38

Primary Data: Primary data are those data specially collection for problem in hand. In this study data were collection from primary source in personal interview of employee and interaction with employee by survey method. These methods of data collection are quite popular. These are the major methods data collection in the research study. I have used the questionnaire to find out the customers investing behavior.

Secondary Data: Secondary data are those data, which are collected for some purpose other than helping and solving the problem in hand. Source of secondary data are: Old reports Company records Company web site Sampling used: Convenience sampling has been used for this project. Sample size: 50 Data used in study In this study data has been collected from primary source from personal interview of customers and interaction with customers by survey method.

39

These methods of data collection are quite popular. These are the major methods of data collection in the research study. The questionnaire was used to find out the customers investing behavior. Also the secondary data is used from company website, books and from other secondary sources. TOOLS AND TECHNIQUES USED IN RESEARCH SURVEY METHOD: The term survey is used for the technique of investigation by direct observation of phenomena or systematic gathering of data from population by applying personal contact and interviews when adequate information about a certain problem is not available in records files and other sources. It is currently being used in those investigations also where published data is used. A survey is conducted for collecting general information of any population institution or phenomena without any hypothesis while specific surveys are conducted for specific problem or testing the validity of some theory or hypothesis. Survey deals with the investigation of entire population. Under this the information is collected from each and every unit of the universe. Money material time and labor required for carrying out a census survey are bounded to be extremely large but its results are more accurate and reliable. The researcher has to come in close and direct contact of the people whom he wants to study. A survey brings the researcher in a position to come with

40

the realities of life and see things personally. Thus the inferences drawn under this are not based upon any theory or principle but upon the actual facts of life. In this method we use questionnaire and with this questionnaire we used to go in the market. The main purpose of the analysis is to summaries the complete observation in such a way that they yield specific answers to the research questions. OBSERVATION Different locations were visited for conducting the research. Different age group consumers were selected so that the overall finding and preference of each and every individual can be ascertained.

41

Chapter 5: Literature design

42

Wealth management
It is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services. High net worth individuals, small business owners and families who desire the assistance of a credentialed financial advisory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and investment management. Wealth managers can be independent certified financial planners, MBAs, CFA Charter holders or any credentialed professional money manager who works to enhance the income, growth and tax favored treatment of long-term investors. Wealth management helps people determine their monetary goals and develop actionable strategies that could help them realize their goals. It also defends their finances against risks. Wealth management is a service designed specifically for high net worth individuals.

Need of Wealth Management

Wealth management helps people determine their monetary goals and develop actionable strategies that could help them realize their goals. It also defends their finances against risks. Wealth management is a service designed specifically for high net worth individuals. The threshold for high net worth varies by country and institution, but the most common definition is individuals who have more than US $ l million in assets, not including their home. Some high net worth individuals have done well in growing their assets from a low base to their current levels, and may feel that they can continue to manage their own portfolios. However, as a person's wealth grows and/or the markets get more challenging, it becomes increasingly difficult to realize the expected returns. With greater wealth comes greater investment options as well as more complex risks and threats in terms of legal regulations, taxation issues and opportunities for loss. The level of fear or even outright panic that can be experienced grows with the size of the 43

investment involves. Greater diversification is needed than in earlier stages of investing. This is where independent financial advisers or large corporate entities help their clients through professional wealth management. Wealth management offers the following services: Investment planning: assists you in investing your money into various investment markets, keeping in mind your investment goals. Insurance planning: assists you in selecting from various types of insurances, self insurance options and captive insurance companies. Retirement planning: is critical to understand how much funds you require in your old age. Asset protection: begins with your financial advisor trying to understand your preferred lifestyle and then helping you deal with threats, such as taxes, volatility, inflation, creditors and lawsuits, to maintaining this lifestyle. Tax planning: helps in minimizing tax returns. This might include planning for charity, supporting your favorite causes while also receiving tax benefits. Estate planning: helps in protecting you and your estate from creditors, lawsuits and taxes. This service is critical for every person whose net worth is high. Business planning: This service aims at optimizing the tax free advantages of running your own business. Business succession planning: assists in planning for the inevitable to maximize returns. Wealth transfer: helps you pass on your wealth to your dependents

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Benefits of Wealth Management

Wealth management helps in: Reducing taxes associated with income, capital gains and estate. Protecting assets from misjudgments and creditors. Improving yields with more diversification and less risk. Managing liabilities such as mortgages and college funding. Finical wealth management solution is a modular, fully scalable, integrated core banking and investment management system designed for the specific needs of retail and private banks. It offers a unique combination of an extensive portfolio of functions with impressive flexibility that enables end-to-end processing of investment products from diverse asset classes including structured deposits, structures notes, equities, mutual funds and insurance. Financial institutions can leverage the solution's rule-based definitions to launch new products - such as dual currency deposits, principal protected deposits, and range accrual deposits - with a distinct time-to-market advantage. Integrated with Finacle core banking and CRM solutions, the wealth management solution ensures unique customer definition, a single, unified view of the customer's portfolio across asset classes and seamless flow of transactions. This helps banks capitalize on their customer base to create additional revenue streams, by offering the mass affluent extended products and services.

Business Benefits
Leverage the Opportunity
Finical wealth management solution enables financial institutions to derive rich integrated insights about the client's investment portfolio. Sophisticated analytics, relevant financial planning and asset allocation tools can be deployed, to leverage the opportunities

45

presented by hot listed clients to explore prospects for cross-selling and fee-based personalized advice.

Ease of Enhancing Product Portfolio

The user-friendly solution provides never-before flexibility to tailor solutions and create new product flavors for emerging customer segments. It enables business users at the bank to add innovative functionalities and features to their offerings, without changing the source code of the application. The solution also interfaces seamlessly with satellite and specialized systems, easily supporting faster roll out of new products at the bank.

Higher Operational Efficiency

Finical wealth management solution provides complete Straight Through Processing (STP) and is fortified with a powerful integration framework to interface with the bank's core banking solution and external data sources. This plays a crucial role in minimizing operational delays and ensuring seamless transaction flows at the bank. Every financial operation is processed identically. Execution either ensures a successful update of all related data or a complete rollback in case of a technical problem. Consistency and reliability are guaranteed. Fully integrated and component - based, the solution also ensures consistency of data. Access rights are rigorously managed, every transaction request is checked and systematic records are maintained as audit trails, ensuring robust security. The solution allows users belonging to different legal entities to work on a single system and database. This directly results in significantly lower implementation costs and ease of centralized reporting for the bank.

Lower TCO
The solution allows users, belonging to different legal entities, to work on a single system and database. This directly results in significantly lower implementation costs and ease of centralized reporting for the bank.

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Some of these typical services include: Investment portfolio management, Tax management and advisory Cash flow management and budgeting Multigenerational wealth transfers Family business and financial advisory Donations to nonprofits and major gift plans Political donations Family offices also offer superior expertise on constructing or selecting alternative investment portfolios and products. Many have invested heavily in systems, reporting and institutional consultants to help select the most appropriate alternative investment managers and products for their high-net-worth clients.

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Objectives of wealth management in scb

To build a strategic asset allocation What is it?

A strategic asset allocation is the appropriate response to the need for both long term capital growth and preservation. It serves as the key building block of ones investment strategy emphasizing a long term investment horizon.

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5.2.Why is Strategic Asset Allocation is so important ? According to the ground-breaking research study by Brinson, hood & beebower, asset allocation accounts for 91.5% of the variation in portfolio returns. Significantly more than security selection or market timing. Following is the pie-diagram which reflects the significance of strategic asset allocation.

Source: investment advisory, standard chartered bank.

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5.3. Types of investors in wealth management (How SCB classifies them).

A self directors: They have their own ideas about the market & require little information or ideas. They make most active investment decisions on their own, but leave passive decision making to the professionals.

A participator: They like to be kept in touch with the market with the views and pro-active sharing of ideas. They also likes to retain some decision making powers of their investments.

A delegator: They leave most of the decisions regarding their investment to professionals and not are too concern about pricing. However, they expect good performance & confidentiality.

5.4.Ideal investment mix: Self directors Participator Delegators

50

Investor type

Percentage in Core 60%

Acceptable Range +/- 10%

Percentage in Satellites 40%

Acceptable Range +/- 10%

Self-Directors

Participators

75%

+/- 15%

25%

+/- 15%

Delegators

90%

+/- 10%

10%

+/- 10%

Source: investment advisory, standard chartered bank

DIVERSIFICATION OF WEALTH MANAGMENT (HOW RBS BANK DIVERSIFIES ITS WEALTH MANAGMENT FUNDS) 1. Geographical diversifications

Indian funds: in Indian funds RBS invests in the different mutual funds of Indian companies.

International funds: these funds prove to be feeder funds & RBS BANK cannot directly invest in the international funds.

51

2.

Asset allocation

Gold: RBS diversifies & invests its funds in gold, due to its speculative nature & good returns.

Properties: RBS BANK invests its customers funds in real estate & properties. Investment in Indian properties has always proven to be fruitful

Art: wealth of customers is invested in various arts like paintings, antiques etc.

Equity: RBS invests in the listed companies in India through share trading, mutual funds etc.

Private equity: equity is the investment in the companies which are not listed.

3. Market capitalisation: Market capitalisation= market value of shares* number of shares

Large-cap: if the market capitalisation of a company is high, then company is called as large-cap Company. It is a relative concept. Large Cap Company can be defined as a company whose market capitalisation is more than the market capitalisation of the highest valued stock on the mid cap index or lowest valued stock of a large cap index. Higher the market capitalisation, greater the liquidity in the stock.

52

Mid-cap: These can be understood as mid-sized companies. It can be defined as a company having a value between the highest valued company and the lowest valued company of a mid- cap index.

Small-cap: These are relatively smaller companies. It can be defined as having a market capitalisation lower than the least valued company of a mid-cap index.

5.INVESTOR DECISION MAKING PROCESS FOR WEALTH MANAGMENT (PSYCHOLOGICAL ANALYSIS OF INVESTORS MIND) The investor decision making process is a road map of investors mind that marketer & manager can use to help guide product mix, communication & sales strategies. THE PROCESS

NEED RECOGNITION INFORMATION SEARCH

Investor Decision Making Process

ALTERNATIVE EVALUATION PURCHASE DECISION POST PURCHASE DISPOSITION

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Investor decision making process for wealth management in SCB India:

1.

Need Recognition: Needs can be defined as result of imbalance between actual & desired states Basic needs of wealth management services are:

Professional Management of wealth of the investor. Growing per capita income in India. Lack of time with Investor to manage his own wealth. Lack of product and market knowledge with the Investor. Dedicated Wealth Relationship Manager for managing wealth providing customized wealth solutions to the investor. Research based advisory.

Marketing helps costumers recognize an Imbalance between present state & desired state Preferred State Present state

54

Present state: Still large per cent age of domestic savings in India is invested in traditional investment products like o Bank Deposits o PF & Pensions o Insurance o Claim on Government o Currency
o

47.40 Per Cent 10.00 Per Cent 14.20 Per Cent 14.70 Per Cent 08.80 Per Cent 04.90 Per Cent

Shares & Debentures

Source : BSE, Kotak Instt. Equities RBI Annual Report 2005 - 06 Preferred state: if something new being offered triggers the decision making process, the offering that SCB can give to its customers are: Personalised Services, Dedicated Wealth Relationship manager Team of Specialists for Wealth Advisory Experience and Expertise in managing wealth Wide range of Wealth management products

55

 Customer Delight and satisfaction through meeting the expectations of the customer.

2. INFORMATION SEARCH: information search begins when an investor perceives a need that might be satisfied by purchase or usage of the product.

INTERNAL SEARCH: process of recalling past information based on

past experiences stored in memory. In case of SCB the decision to choose the branch & purchasing the bank product is based on past need satisfying experience of the customer. If any customer wants sophisticated, expertise, experienced wealth management services they would choose SCB or if in the past the need has been satisfied by going to SCB.

EXTERNAL SEARCH: process of seeking information in the outside

environment. Outside environment marketing & non-commercial information. Many consumers decision are based on a combination of past experience (internal source) & marketing & non-commercial information (external source)

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In case of banking external source of information for customer can be information from the relatives, friends, co-workers, newspaper, TV, radio, advertisement.

3. ALTERNATIVE EVALUATION: when evaluating potential alternatives, consumer tends to use two types of information.
a) A list of Banks from which they plan to make their selection

(evoked set).

b) The criterion they will use to evaluate each bank.

EVOKED SET: Group of brands resulting from an information search from which a buyer can choose. Other competitors consumers consider for wealth management can be: Banks:

CITI Bank HSBC BARCLAYS Bank ICICI Bank HDFC Bank KOTAK MAHINDRA Bank

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 Private Banks
5.9. CRITERION FOR EVALUATION OF SCB Customer approach Customer charter Location Complaint data Easy accessibility Three factors create credibility of brand.

Perceived quality of brand: some people consider services & quality

of SCB to be excellent, some consider it to be very good but very few in fact negligible people knows about SCB & its services. (Based upon questions asked from 50 people)

Perceived risk associated with brand: Strong compliance and

stringent group policies help the Bank to minimise the financial / legal risk to the bank. Each and every investor is required to complete client investment profiler for better understanding of clients expectations / risk appetite.

58

There is less financial risk involved risk because of good services & value for money invested aspect, as well less time & effort cost because SCB has a wide network of managers & experts & has branch at a very convenient location.

Information cost saved with that brand (time + effort)

PURCHASE: TO BUY OR NOT TO BUY

Once the customer have evaluated the alternatives to RBS bank

(HDFC, SBI, ICICI) on the basis Of various evaluative criterions mentioned above the consumer makes the purchase decision.

Customer may prefer SCB because of their sophistication in banking,

dedicated team of relationship managers (RMs) and investment counsellor suit of privileges for their clients, phone banking etc.

The branch also plays an important role in purchase decision.

It makes it a branch/outlet based purchase
a)

Branch image: cheerful, friendly warm place that reminds customers of good times, & it ambience gives youthful & warm feeling.

b)

Branch advertising: Branch managers may also take initiative of advertising branch separately & offers something different from other bank branches.

59

c)

Branch location & size: branch should be located at easily accessible & convenient location. Branch size should be enough so that normal operations can take place easily.

d)

Branch atmosphere: when it comes to banking in India, banks atmosphere are always messy (take e.g. of SBI, PNB etc.) but now customers expects clean, good environment in the bank.

5) POST PURCHASE- SATISFACTION OR DISSATISFACTION: Post purchase is a stage where client has already invested his money into different wealth solutions through the Bank and has started expecting returns. Reasons of customer satisfaction. a) Profitable returns b) Excellent service c) Suite of privileges d) Invitation to exclusive events, concerts e) Banking by phone, door banking

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Chapter 6: Data analysis and interpretation

61

DATA ANALYSIS
Investment decision
Sr. NO. 1 2 3 PARTICULARS SELF PROFESSIONAL WEALTH MANAGER JOINT ADVICE OF PROFESSIONAL AND SELF RESPONDENT 20% 40% 40%

RESPONDENT

20% 40%

1 SELF 2 PROFESSIONAL WEALTH MANAGER 3 JOINT ADVICE OF PROFESSIONAL AND SELF

40%

Concept: Everybody wants to invest the money in a safe place so that they take advice of Professional managers or joint advice of professional and self.

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Analysis: From the above pie chart it is clear that before investing the money people take the advice of professional managers and the joint advice of professional and self to invest the money in the best place so that they can get a better return at low risk.

Bank preferred by customers for wealth management

Sr. NO. 1 2 3 4 PARTICULAR HDFC ICICI STANDARD CHARTED BANK OTHERS RESPONDENT 30% 25% 20% 25%

25%

HDFC 30% ICICI STANDARD CHARTED BANK

20%

25%

OTHERS

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Concept: With which bank people want to do their investment or they already have invested. Analysis: This pie chart shows that most of the investors (25%) invest in HDFC Bank then (25%) in ICICI and standard charted bank (20%) rest of the people invest in other banks. So HDFC and ICICI are the main competitors of SCB bank.

Investment service preferred by customer

Sr. NO. 1 2 3 4 5 PARTICULAR RESPONDENT 17% 13% 26% 30% 14%

Mutual Fund Schemes Portfolio Management Services Direct Equities Structured Investment Products Real Estate Funds

RESPONDENT

1 Mutual Fund Schemes 14% 17% 13% 2 Portfolio Management Services 3 Direct Equities 4 Structured Investment Products 26% 5 Real Estate Funds

30%

Concept: The customer invests the money in such a scheme so that they can earn a better return on minimum risk.

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Analysis: This pie chart shows that most of the customers (30%) invest in structured investment products, 26% of the investor invest in direct equities they can take high risk the lowest investment service is portfolio management (13%). The high income people invest in portfolio management services

The information for deciding the financial institution for wealth management
SR.NO. 1 2 3 4 5 PARTICULAR RESPONDENT 7% 16% 25% 34% 18%

Newspaper Magazine Internet Direct marketing Any other, please specify

RESPONDENT

18%

7% 16% Newspaper Magazine Internet Direct marketing

34%

25%

Any other, please specify

Concept: Customer gets the information from different sources to choose the institution for investing money. Analysis: Most of the customers get the information through direct marketing i.e. 34% after that 25% customer give preference to the internet, 65

18% of the customer get the information from word of mouth rest of the people get information from newspaper and magazines. So direct marketing is the best way to provide information to the customers. The left 18% of the customers get the information from television and word of mouth.

Basis of evaluating various Banks for wealth management

SR.NO. 1 2 3 4 5 PARTICULAR RESPONDENT 27% 23% 25% 14% 11%

Risk Services Past return Location Other

RESPONDENT

11% 14%

27% 1 Risk 2 Services 3 Past return 4 Location 5 Other

25%

23%

Concept: Customers choose the different bank on the basis of different parameters like risk, services, returns, and location. Analysis: From the above pie chart it is clearly defined that most of the customers (27%) are invest on the basis of risk, customer wants low risk high return and also 25% customers look at the past return of the bank,

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they would like to invest in such a place where the past return is too high also 23% customer invests on the basis of services provided by the bank

Mutual fund you would like to invest

SR.NO. 1 2 3 4 PARTICULAR RESPONDENT 21% 19% 25% 26% 9%

Money market funds Debt funds Fixed maturity plans Equity funds Any other 5

RESPONDENT

25% 26% 1 2 3 19% 21% 9% 4 5 Money market funds Arbitrage funds Fixed maturity plans Equity funds Any other

Concept: Different customer invests in different type of funds. Analysis: 26% of the customers invest in equity funds. These types of customers take more risk and high potential. 25% of the customers invest in fixed maturity plans; they do not want to take risk.

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How do you keep yourself updated on market events?

SR.NO. 1 2 3 4 5 PARTICULAR RESPONDENT 37% 24% 15% 11% 13%

Daily market flash Weekly market newsletter Monthly newsletter Market event report Any other

RESPONDENT

13% 11% 37% 1 2 3 15% 24% 4 5 Daily market flash Weekly market newsletter Monthly newsletter Market event report Any other

Concept: The customers keep themselves updated from different ways. Analysis: Above chart is showing that majority of the customers updated themselves from daily market flash so the bank should provide the information on daily basis and also provide information on weekly newsletter.

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Return with the past year investment

SR.NO. 1 2 3 4 5 PARTICULAR RESPONDENT 37% 24% 15% 13% 0%

5% to 10% 10% to 20% 20% to 30% More than 30% negative returns

RESPONDENT

13% 15%

0% 37% 1 3 4 5 5% to 10% 20% to 30% more than 30% negative returns

2 10% to 20%

24%

Concept:

Different types of customer invest in different services and

accordingly get the returns. Analysis: Above chart shows that most of the customers invest in low risk low return service because they do not want to take risk and invest the money in structured investment plan. There is not a service which gives negative returns.

Why do you want your wealth managed?

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SR.NO. 1 2 3 4

PARTICULAR

Return potential Tax benefits Diversification Professional management

RESPONDENT 43% 27% 12% 18%

RESPONDENT

18% 12% 43% 1 2 3 4 27% Return potential Tax benefits Diversification Professional management

Concept: Everyone has a purpose of investing money. It depends on the customer where he wants to invest. Analysis: The main objective of the customer of investment is to get the maximum return on investment. This graph shows that the customers second objective is to save tax.

The best wealth management services

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SR.NO. 1 2 3 4 5

PARTICULAR

HDFC Standard Chartered ICICI Citi Bank Others

RESPONDENT 28% 19% 23% 18% 12%

Respondents

12% 18%

28%

HDFC Standard Chartered ICICI Citi Bank Others

23%

19%

Concept: All banks have their images in customers mind for their services. Analysis: According to this chart most of the customers feel that HDFC bank provides the best services rather than others, and on the third position comes SCB where 19% of the customers say that RBS provides the best service.

Percentage of invested income

SR.NO. 1 PARTICULAR RESPONDENT 14%

5% to 10%

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2 3 4

10% to 20% 20% to 30% more than 30%

26% 27% 33%

RESPONDENT

14% 33% 1 2 26% 27% 3 4 5% to 10% 10% to 20% 20% to 30% more than 30%

Concept: How much percentage of the income customers invest or how much savings they do. Analysis: This pie chart shows that investment is very much important in everyones life so that most of the customer invest more than 30% of their income then 10% to 30% income is invested by customers. Only 14% people invest 5%-10% part of their income.

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Chapter 7: Research findings and recommendations

73

Findings
After analyzing all the data given by potential existing and non existing consumer I found certain key findings that are very important for my project. I have divided findings into two parts 1. Findings from data analysis and 2. General findings. General findings are basically an overlook of the markets. Findings from data analysis: 1. 2. 3. 4. 5. 6. 7. 8. 9. HDFC is the prime competitor of SCB. For investing the money customer takes the advice of professional managers. Most of the respondent wanted to invest in low risk investment plan. Direct marketing is the most popular way to provide information to the customer. Risk is the most important factor which is considered while investing. Return potential and Tax benefits are two main purpose of investment. Most of the customers invest more than 30% of their income, so they want a good return at low risk. The service provided by the bank is also very important to attract the customers. Many of the respondents wanted to invest in equity funds because they wanted high return. General findings: 1. HDFC was at the top of the player and SCB was at third Position 2. There were few people who wanted to take high risk and high return.
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3. Most of the customers are not aware of the different types of mutual fund.

recommendations

SCB needs to expand its branch network in Dehradun & nearby

areas as it has only 1 branch compared to others banks. Most of the individuals were not the customer of SCB bank but

were showing interest while asking about either for Account or investment. Company should contact them so that they may become the potential customer. SCB bank should design more attractive promotional schemes to attract the attention of consumers. On asking have you been contacted by any of the respective agent or person regarding Investment or for account opening or for any service apart from few people mostly told that they had not been contacted by RBS bank but by other player. If market developers and agent having daily visit in the market and has to contact the new people then it become their responsibility to contact these people to ask what is their
75

need and want. If not possible, then company should do monthly basis survey to find out such people and try to make them companys potential customer. Also company should provide daily market flash and the different types of schemes so the customer may keep themselves updated.

limitations
The study limits to some part of the Delhi. Due to unavailability of proper conveyance facility, it was really hard to cover the market under a scorching sun. In many areas it was really tough to get respondent as they were lacking of time and was not willing to support or share their view. The time duration of two months was short for the completion of all activities. The sample size is 50 because of time constraints.

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Conclusion
It was a pleasant experience to have a summer project in a big company like Standard Chartered Bank. It has given me an opportunity to know all dimensions of the market and how to tackle problems of it .I have learned various functions carried out at all the level of organization especially of middle level and lower level. After a rigorous period of my project I come to know that how practical knowledge is different from the theoretical concepts. I was supposed to do project in Dehradun where Standard Chartered Bank is operating its business and playing a major role for providing financial product and services. Other players are HDFC and ICICI Bank has a large market size and it is increasing day by day.

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Bibliography
1. BOOKS. Private Banking, Investment Decisions and Structured Financial Products Author(s): Dimitris N.Chorafas Published by : Elsevier Ltd.

2. INTERNET. www.standardchartered.co.in www.google.com www.msnsearch.com www.wikipedia.com

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Appendix
Questionnaire
Sample size: 50 1. Do you know about the wealth management? o Yes o No 2. Have you ever done your wealth management through any financial institution? o Yes o No 3. How you take your investment decision o Self o Professional wealth manager o Joint advice of professional and self 4. In which bank have you done your wealth management? o HDFC o Standard Chartered o ICICI o Citi Bank o Others 5. In which investment service you invest more? o Mutual Fund Schemes o Portfolio Management Services o Direct Equities o Structured Investment Products o Real Estate Funds 6. From where you got the information for deciding on the financial institution for wealth management? o Newspaper

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o o o o o

Magazine Internet Television Direct marketing Any other, please specify

7. On what basis you evaluate various Banks for wealth management? o Risk o Services o Past return o Location o Other 8. In which type of Mutual fund you would like to invest? o Money market funds o Arbitrage funds o Fixed maturity plans o Equity funds o Any other 9. You get the information and reports from: o Daily market flash o Weekly market newsletter o Monthly newsletter o Market event report o Any other 10. How much return have you got with the past year investment? o 5% to 10% o 10% to 20% o 20% to 30% o more than 30%

11. Why do you want your wealth managed? o Return potential o Tax benefits
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o Diversification o Professional management

81