Summer Internship Project Report
On
A Study On Mapping Opportunities As Distributors Of Mutual Funds Amongst Insurance Agents In Vapi.
At
N J India Invest, Vapi.
Submitted to
Institute Code: 750
S. R. Luthra Institute of Management
Under the guidance of
Ms. Darshana Shah
(Assistant Professor)
In partial fulfilment of the Requirement of the award of the degree of
Master of Business Administration (MBA)
Offered by
Gujarat Technological University
Ahmedabad.
Prepared by
Ms Jaynee Bhadresh Panchal
177500592041
MBA (Semester III)
July 2018.
Student Declaration
I hereby declare that the Summer Internship Project Report titled “A study on mapping opportunities as distributors of mutual funds amongst insurance agents in Vapi.” In N J INDIA INVEST is a result of my own work and my indebtedness to other work publications, references, if any, have been duly acknowledged. If I am found guilty of copying from any other report or published information and showing as my original work, or extending plagiarism limit, I understand that I shall be liable and punishable by the university, which may include ‘Fail’ in examination or any other punishment that university may decide.
Enrolment Number
Name
Signature
177500592041
JAYNEE PANCHAL
Place: __________________ Date:__________________
Date: __/__/_____
Institute Certificate
This is to certify that this Summer Internship Project Report Titled “A study on mapping opportunities as distributors of mutual funds amongst insurance agents in Vapi.” is the bonafide work of Miss Jaynee Bhadresh Panchal (177500592041), who has carried out his project under my supervision. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate. I have also checked the plagiarism extent of this report which is ……… % and it is below the prescribed limit of 30%. The separate plagiarism report in the form of html /pdf file is enclosed with this.
Rating of Project Report [A/B/C/D/E]:
Ms. Darshana Shah
(Assistant Professor)
Dr. Jimmy Kapadia
( Director)
PREFACE
Education is the process of sharpening one's mind. Education is something, which is not given in class rather, it is a process, which can take place any time and at any place, but to develop positive attitude towards, 'Education' school and colleges have to work a long way. When any subject is taught theoretically in class it is known as "Academics" but when it is studied with the subject applicability in real life it is known as "Professional Education".
I am the students of MBA a professional degree course.MBA the two year's post graduation course with management of business. It is the perfect degree course for student teaching them to deal the business.
This was the great opportunity for me to know all such things and also to know how really operation is done and introduced in the market, what are the hurdles are in the way of development and what are the favourable feature supporting the development. This credit of giving me such an exposure goes to N J INDIA INVEST.
Finally I myself truly declare that this report is being prepared on the basis of true information collected during the visit by me and any error in it is regretted.
ACKNOWLEDGEMENT
Education along with the process of gaining knowledge and stronghold of subject is a continuous and ongoing process. It is an appropriate blend of mindset, learnt skills, experience and knowledge gained from various resources.
Firstly, I would like to thank Gujarat Technological University to give me an opportunity to undertake this project to enhance my knowledge. Nextly, I also thank S. R. Luthra Institute of Management, of Surat and our director Dr. Jimmy M. Kapadia who had always been prepared to offer help at any time in spite having their desk full of nagging priorities.
I am thankful to my project guide Faculty guide. Ms. Darshana Shah for their expert guidance, encouragement and suggestions throughout the preparation of this project work.
It is an occasion of great pleasure and a matter of great satisfaction to present this report of project work undergone at N J India Invest, Vapi. I would also like to thank my External guide Mr. Mukhtar Alam of N J India Invest Vapi for giving me the exposure of practical scenario in mutual fund advisory.
This set of work is helped me in acquiring valuable knowledge regarding application of theoretical knowledge and has also helped me to understand in a better way what I learnt in theory.
Last but not the least, I am also thankful to my family members and all my friends and all other staff members of MBA for their motivation, support and provision of all necessary facilities during my project work. I always remain grateful to those who had been a consistence source of encouragement and whose constant care about me and provided me a new direction to work.
Yours Sincerely,
Jaynee B. Panchal.
Executive Summary
Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a relatively low cost. Investible Surplus with Indian Families is increasing as Double Income Nuclear families are becoming more prevalent in the society. Hence, this requires the professional advice for the client by the qualified and experienced mutual fund advisor.
This research is “A study on mapping the opportunities as distributors of mutual funds amongst insurance agents in Vapi”. The objective of the study is to check the awareness level about mutual fund as a product and the factors influencing the decision of becoming mutual fund advisor. The study has been undertaken in Vapi area and the sample size was 60.
It is briefly found that majority of insurance agents wants to become mutual fund advisor in order to gain the opportunities of the growing market. The insurance agents have the opinion that mutual fund will help then earn more income as compared to insurance policies. The study also reveals that the decision is dependent on the demographic factors i.e. age and gender. The respondents take the decision while considering the time factor involved in advising and their existing client base.
Different statistical tools were used for the data analysis i.e. Reliability test, Kruskal Wallis test, Cross tabulation, Mann Whitney test. Whereas for data analysis SPSS Software was used.
TABLE OF CONTENTS
• Students’ Declaration
• Institute’s Certificate
• Company’s Certificate
• Preface
• Acknowledgement
• Executive Summary
Sr. No.
Particulars
Page No.
1.
Introduction
7
2.
Industry Profile
14
1. Global
2. National
3. State
4. PESTEL
5. Current trends
6. Growth of Industry
13
19
20
21
23
25
3.
Company Profile
25
1. Company Profile
2. Organization Structure
3. Divisions/ Departments
4. SWOT
26
33
34
47
4.
Review of literature
49
5.
Research methodology
59
1. Problem Statement
2. Research Objective
i. Data based
ii. Tools for Analysis
iii. Benefits of the study
iiii. Limitations of the Study
60
60
60
61
61
61
61
6.
Data Analysis
62
7.
Findings and Conclusion
92
Bibliography
96
Annexure
99
TABLE INDEX
Table no
Particulars
Page no.
1
Age
63
2
Gender
64
3
Insurance agent
35
4
Products dealing
66
5
Company belonging
67
6
Experience
69
7
Awareness of the product
70
8
Awareness of the revenue
71
9
List of revenue
72
10
Awareness about the growth
73
11
Decision of mutual fund advisor
74
12
Positive reasons
76
13
Negative reasons
77
14
Attend BOP
78
15
Meeting with representative
79
16
Appeared AMFI exam
80
17
Wants to appear AMFI exam
81
18
Reliability test
82
19
Kruskal Wallis test
83
20
Kruskal Wallis test
84
21
Kruskal Wallis test
85
22
Kruskal Wallis test
86
23
Cross tabulation
87
24
Kruskal Wallis test
89
25
Kruskal Wallis test
90
26
Mann Whitney test
91
27
Mann Whitney test
92
CHART INDEX
Chart no
Particulars
Page no.
1
Age
63
2
Gender
64
3
Insurance agent
35
4
Products dealing
66
5
Company belonging
67
6
Experience
69
7
Awareness of the product
70
8
Awareness of the revenue
71
9
List of revenue
72
10
Awareness about the growth
73
11
Decision of mutual fund advisor
74
12
Positive reasons
76
13
Negative reasons
77
14
Attend BOP
78
15
Meeting with representative
79
16
Appeared AMFI exam
80
17
Wants to appear AMFI exam
81
CHAPTER 1: INTRODUCTION
1.1 Wealth Management
Wealth management is a superior professional service that is a combination financial and investment advice, accounting and tax services, retirement planning and legal or estate planning for one set fee. Customers work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the customer's own attorney, accountants, and insurance agent. Some wealth managers also provide banking services or advice on philanthropic activities.
Wealth management is an investment discipline which incorporates financial planning and asset management and a number of aggregated services. High-net-worth individuals (HNWIs), small scale 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 have backgrounds as independent Chartered Financial Consultants, Certified Financial Planners or Chartered Financial Analysts (in the United States), Chartered Strategic Wealth Professionals (in Canada), Chartered Financial Planners (in the UK), or any credentialed (such as MBA) professional money managers who work to enhance the income, growth and tax-favoured treatment of long-term investors.
Wealth management is an investment advisory service for high net worth individuals. Wealth management combines both financial planning and specialized financial services, including personal retail banking services, estate planning, legal and tax advice, and investment management services.
The goal of wealth management is to sustain and grow long-term wealth. The net worth needed to qualify for wealth management services vary among institutions, but the net worth threshold typically starts at about $20 million. Also, depending on the institution, the range of services available is highly customizable in order to meet the specific needs of the client
1.2 Wealth Management Process:
Wealth Management is a disciplined process designed to keep you on-track to achieving your own specific goals. It is focused on what's important to you and your family or business.
1. Introduction:
Explain the services offered and introduce our wealth management team of professionals/experts.
2. Discovery:
Gathering all financial information: tax returns, financial statements of investments – including lines of credit and mortgage details etc. At this step, I clarify goals for retirement and investment horizon.
3. Documentation:
Account opening documents and all account agreements. Transfer documents and set up access to on-line viewing of accounts.
4. Creating a Plan:
Details on how we will achieve your goals.
• Development of your individual plan
• Analyze personal financial information
• Strategies appropriate for you
• Action plans to achieve your goals
5. Review:
Just when you make plans, life happens – and events large or small can change everything. The review stage incorporates tracking systems to keep your plan on target. We'll help you plan for the unexpected, anticipate change, and adjust your plans over time, as necessary.
1.3 Need and Importance of Wealth Management:
The Indian Wealth Management market is on a sustained path of growth, given India’s long-term economic prospects, positive demographics, rising income levels and current low penetration. Currently, India ranks among the Top 10 nations in terms of total private wealth held as per Capgemini’s World Wealth report. The total wealth held by Indian High Net worth Individuals (HNI) (i.e. individuals with investable assets of $ 1 million or more) is expected to grow at a CAGR of 27% over next five years to approximately Rs. 400 Trillion.
This, is te combination with robust GDP estimate by IMF of 7.5 percent in 2016 and 2017 and growing allocation to financial assets by HNIs, augurs well for the Indian Wealth management industry.
At Individual level:
Although 8 % of the total population in India represent 45 % of the total wealth, only 20 % wealthy families takes a advice from wealth managers. However, this number is growing steadily as more and more client seek advice for:
1) Asset Management
2) Financial Planning (specific short term and long term goals)
3) Tax Planning
4) Estate Planning
Around 69 % of total HNI population in India is below the age of 55 years. This population seek a wealth manager as they neither have the professional expertise nor the time to monitor their investments.
At Organisational level:
The whole scenario of Wealth Management is ever changing. Clients' requirement are ever changing and the ability to deliver differentiated service is continuously diminishing. It is said that, the key differentiated service is provided by engagement with organisations and HNIs at various levels. Organisations and HNIs would like to shift their focus more on their respective areas of expertise while leaving activities like Financial Planning, Tax Planning etc. to the experts. Organisation wants a snapshot of their investments; want higher customized offerings and need easy access to credit and many such differentiated offerings. Wealth Management firms has the ability to provide one stop shop for all these requirements save a lot of cost, time and energy for their clients.
1.4 Future scope for Wealth Management in India:
Wealth management industry in India is yet in a very nascent stage. The industry is slowly and gradually moving from a one size fits all models to a more customized offering. This is supported by technology to take care of the non-core activities. As high as 25.5 % HNI population in Asia pacific (ex Japan) is using credit to enhance their returns. Hence, there is increased demand on lending and credit solutions for HNIs. The thrust on customization, technology dependence, need for lending solutions and rising awareness and management of financial assets as against physical assets is creating large opportunities for the Wealth Management industry in India. As investors and products evolve over time, the industry
can position itself to be able to serve specific needs of clients across situations.
Reasons for growth of Wealth Management Market in India
1. Creation of wealth is happening very quickly in India
2. India has more number of billionaires than Japan.
3. 1000+ house-holds with earning of USD 30 Million or above.
4. 2, 50,000+ house-holds with earning of USD 1 Million or above.
5. Only 5% of High Net worth Individuals is tapped by the Indian Wealth Management.
6. Only 25 Private Banks with around 15000 Wealth Manager targeting this big chunk of Wealthy Indians.
7. If a Wealth Management firm is able to get just 2% of Wealth of these individuals then it would have USD 5 Billion of Assets under Management (AUM)
8. If we consider the house-holds families with USD 50,000 to 1, 00,000 as wealthy the number is 1.50 Million and this is growing at a very fast rate.
9. India is poised to become the 2nd largest market in terms of incremental wealth added after China.
10. Indians save USD 300 Billion every year. But the question is, how much of this is channelled into investment is a big challenge, as well as an opportunity for the Indian Wealth Management Industry.
11. According to the figures on potential of Indian Wealth Management Industry if 20% of this 300 Billion USD is channelled into stock markets and India gets about 60 billion offshore funds then the total size of the Indian Wealth Management Industry would be around USD. 120 Billion.
12. Preferred savings instruments of Indian as of now is Real Estate and Gold. Both of these have their own demerits and sooner or later Indians would become more agreeable to Capital Market Investment Instruments.
13. Investible Surplus with Indian Families is increasing as Double Income Nuclear families are becoming more prevalent in the society.
14. Indians investor today is becoming more financially well to do and Financial Literacy is improving making Wealth Managers more acceptable to Indians.