Bringing industry, finance & people together.
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“Wealth Management Business
&
Comparative analysis of structured products with other products”.
By: Atul Abhiseck Singh.
Registration No: 08/016.
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Karvy Intro
Objective
Research Methodology and Scope
Wealth Management Outlook and Value chain.
Market Participants
Product Classes
Karvy WM: Client Profiling & Segmentation
Karvy Financial Planning & Business development model
Competitor Analysis
Structured Products, Features ,Types and Comparison with other Products
Future Outlook, Challenges and Opportunities
Experience and Recommendations
Achievements Karvy
10 reasons why Karvy.
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1979
1985
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Inc
ep
tio
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Co
rpo
rate
Re
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try
Se
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Sto
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erv
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Fin
an
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l P
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uc
ts D
istr
ibu
tio
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Co
rpo
rate
Fin
an
cia
l S
erv
ice
s
De
po
sit
ory
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rvic
es
IT E
na
ble
d S
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ice
s
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ina
nc
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Ad
vis
ory
Se
rvic
es
De
bt
Ma
rke
t S
erv
ice
s
Ka
rvy
Glo
ba
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erv
ice
s
2005
PC
G g
rou
p o
f H
on
gk
on
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as
ta
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n
20
% s
tak
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n K
SB
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us
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Co
mp
ute
rsh
are
2008
La
rge
st
fin
an
cia
l p
rod
uc
t d
istr
ibu
tor.
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To understand the wealth management business and various financial products available in the financial sector.
Business development for wealth management division Karvy.
Career orientation towards financial services industry.
To interact with Affluent, HNIs and Ultra HNIs clients of Karvy.
Experience of marketing of financial products and personal financial planning services.
To understand various competitors in the wealth management domain.
To have practical exposure to the real market scenario.
To understand structured products concept, features and return with risk profile.
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Primary research
Global wealth models
Savings & Investments
Industry statistics
Secondary research program
Market Context Competitive dynamics Customer preferences Forecasts
Macro Economics.
Retail Invsts.
Wealthy Individuals & their assets.
Trends
Best practices
Structured products
Service offerings
Distribution
Financial planning
Product & Services
Sophistication
Retail savings &
Invsts.
Wealthy Individuals
& their assets
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Originated in 1990s
WM= IC+AP+RM
It includes:
1. Core banking type products like current account, time deposits etc.
2. Brokerage
3. Asset management-Both financial and non financial.
4. Lending products such as credit cards and mortgages.
5. Insurance and protection products
6. Advice in all shapes and forms-asset allocation & wealth structuring.
7. Other concierge type services like art storage, real estate location, hotel, restaurant & theatre booking.
It is nothing but services provided to wealthy individuals & their families.
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Wealth Management Process from a Client Advice Heritage
Wealth Management Process from a Product-Driven Heritage
Client advisory driven
Objective setting
Asset allocation
Product selection
Trading Product driven
Advice oriented Product oriented
Private banks; TrustsAssets
managers Brokers
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Brokerages
AMC.
Insurance agencies
Financial advisors/planners
Private banker’s
Family offices.
Equity- direct equity, futures & options, mutual funds etc.
Debt- bonds, WDM/RDM, fixed deposits etc.
Alternative Investments- gold/silver, real estate, structured products, commodities, art & antiques etc.
Risk Management- life insurance & non life Insurance.
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Affluent category
HNIs
Ultra-HNIs
Based on Life cycle stage :
Young unmarried
Married with children
Married with older children
Based on Source of Income:
Salaried individual ( CEOs)
Professionals & freelancers (Doctors, teachers, designers, architects, etc.)
We also segment on the basis of:
Assets size
Sources of wealth and tax situation
Advice dependency & risk tolerance
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"To cater to the unique needs and requirements of the mass affluent by providing complete financial solutions and thereby enabling them to transform their dreams into reality.”
Our Vision:
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A personalized service - comprehensive & continuous
Comprises of the following services :
InvestmentPlanning
RetirementPlanning
TaxPlanning
InsurancePlanning
LiabilityPlanning
ExpensesPlanning
ContingencyPlanning
Personal FinancialPlanning
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What do I want to achieve and how?
Am I overspending?
Where do I invest?
How much will I need to invest to realize my financial freedom?
Am I taking too much or too little risk?
Am I doing enough with regard to tax planning?
Should I continue or foreclose my loan?
Financial planning answers critical questions like:
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After we acquire a client we follow the 4 stages:
Seamless Execution
Plan Process
Pre-PlanInteraction
Actual Plan Making
Product specificrecommendationthrough research
support
Follow-Up
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Plan Process
Pre-PlanInteraction
Actual Plan Making
Product specificrecommendationthrough research
support
Follow-Up
• Personalized touch for understanding you better
• Assistance in filling Input Sheet
• Define and establish your ‘financial shock absorbers’
• Helping you to identify, quantify and prioritize your financial goals
Stage 1
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Plan Process
Pre-PlanInteraction
Actual Plan Making
Product specificrecommendationthrough research
support
Follow-Up
Stage 2
• Team of experts working towards your financial future
• Giving you valuable insights through different techniques like ratio analysis, net-worth analysis, open risk position, etc.
• Tailor-made recommendations for you
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Stage 3
Plan Process
Pre-PlanInteraction
Actual Plan Making
Product specificrecommendationthrough research
support
Follow-Up
Real Estate
Tax Planning
Mutual Funds Insurance
Commodities
F&O
Equities
Research support
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Plan Process
Pre-PlanInteraction
Actual Plan Making
Product specificrecommendationthrough research
support
Follow-Up
Stage 4
• Periodic litmus test to evaluate how close you are to your financial goals
• Assessing any change in your risk tolerance levels
• Quarterly portfolio review and feedback
• Performance statement of your investments
• Review of insurance needs at important junctures of life
• Continuous research recommendations over all personal finance products
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KARVY FINANCIAL PLANNING
Wealth management services
Portfolio management services
Private banking servicesHave a wholesome
meal!
Here lies the difference
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And the wholesome meal at the best priceAnd the wholesome meal at the best price
Fee structure#
One time membership fee* Rs.5,000
Annual maintenance charge* Rs.5,000
*Taxes extra #Subject to changes
Value additions: Need based review
Investment Calendar
Online portfolio
Access to exclusive research report
2517.75 man hrs. of service
Exclusive login id
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Service Offering Fees Charged
Remarks
HSBC Bank WMS/ Need based Financial planning/ PMS
None Relationship based business. Focus on banking, financial & Insurance products. PFP focus missing.
ICICI Bank Private banking/ WMS None Relationship based business. Focus on pushing banking, financial & insurance products only. PFP focus missing.
ABN Amro Bank WMS/ Preferred banking None Retail customers are not targeted; Clients with investible surplus >30 lakhs only. Focus on baking & financial products. Main focus on MF. PFP focus missing.
HDFC Bank Private banking, Recommendation on Equity, MF & Insurance
None Equity, DP, MF & F&O products pushed & recommended. PFP Focus missing.
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Service Offering
Fees Charged
Remarks
Kotak Securities WMS None Relationship based business. Focus on banking, financial & Insurance products. PFP focus missing.
Citibank WMS None A/c holders targeted, relationship based business, focus on banking, financial & Insurance products. PFP focus missing.
Religare PMS Performance Linked
DP,MF, Equity, Commodities, Derivatives. Portfolio management based on risk profiles. No PFP Focus.
Deutsche Bank Private Banking/ PFP
None Relationship > Rs.5 Lakhs; RM- single touch point; MF & Insurance products & recommendations offered; Consolidated gain/loss statements provided. However part of PFP focus missing due to lack of goal setting.
Allegro PFP Rs. 10,000-20,000
RMs handle clients; analytical & solution driven approach for PFP.
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Structured Products are one of the most practical and recently developed vehicles of wealth management.
Security low return
Risk high return
Optional
Part
Fixed Income
Part
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100%.
80%.
20%.
65%.
Performance Linked
Component.
Performance Linked
Component.
Fixed-Income Component.
Fixed-Income Component.
Fixed-Income Component.
Fixed-Income Component.
Performance Linked
Component.
Performance Linked
Component.
According to the market evolution.
Guranteed.
Returns:
It varies according to the performance of the underlying assets.
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Features:
Capital protection guaranteed.
Less risk then any other product.
Return linked to the value of an asset or level of an index
Fixed term-both capital and return.
Can be sold before maturity but return may be less.
Types:
Structured notes: Equity linked, Multi assets linked, Commodity linked, FX linked, Precious metal linked notes etc.
One touch deposit
Wedding cake deposit
Options & lending
Capital series
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Comparison of Structured Products with other Traditional Products.
Basis of Comparison/Products.
Structured Products.
Equity Shares/Stocks.
Mutual Funds. Debts/FD/NSC/KVP. Bank Deposits.Alternative
Investments.
Investment Objectives.
Capital Protected and better return than other
Investments.
To get maximum /highest return in
quick time.
To get high return in respect to Bank Deposit
and NSC etc.
Capital Security and Good return, whether market is
favorable or not.
Lowest Return But Capital
Safe.
In Future Investment Value will rise or to have
Capital Gain.
Risk Profile.
Capital Protected if held till Maturity, So
No Risk.
Highly Risky due to dependency on
capital and stock market.
Risky, NAV Depends on
Market Fluctuations.
No Risk. No Risk.Somewhat Risk is there, especially in Gold Investment.
Time Horizon.
Lock in period is there. Full Tenure For
Capital Protection and
return.
No Lock in Period in Existing one, but yes in New issued ones.
Lock in Period is there in Close ended funds.
No Lock in Period, But Return Differs.
No Lock in Period.
No Lock in Period.
Profiles of Investors. Mostly HNIs
All Clients, But for those who take high risk and want better and sooner return.
Individuals who want to take less risk and better
return than normal savings.
Who don’t want to take risk and wants good return
than normal savings.
Normal No Risk taker Investors.
HNIs who takes some risk on future
predictions of market.
Future Outlook.
Huge, Research Analysts
Predicting $ 180 Billion market
Pretty well, but investors are more averse to it right
now
Good for individuals,
small Investors, market growing at 26 %annually
Somehow Stagnant Still GrowingHigh Growth
future Prospects
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Future:
Population
Skills
Stock Market
Affluent, HNIs and Ultra HNIs
Market rules regarding structured products
Challenges & opportunities:
Client education
Scaling up
Unorganized sector.
Technology support
Regulatory reforms
Rolodex migration
Certification issues
Commoditization
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Experience:
Attended presentation by SUPERFUND, an MNC based in Singapore on structured products.
Patience.
Tackle questions.
Recommendations:
Karvy should tap both organized and unorganized market on a large scale.
Karvy should improve its after sales service & tap the existing customer base of Karvy.
Karvy should make its website more attractive, user friendly and informative.
Karvy can advertise regarding wealth management, financial planning and structured products as many people don’t have idea about it.
There is need to make the people aware of financial planning and PMS, WM difference.
To consider the service charges as most companies to attract customers give discounts.
Different pricing for different income range can be introduced
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Among the Top 3
Depository
Participants
Amongst the Top 5
Stock Brokers
Largest Network
of Branches &
Business Associates
ISO 9002
certified operations
by DNV
Adjudged as one of
The Top 50 IT Users
in India by MIS Asia
Full fledged
IT driven operations
Largest Independent
Distributor for
Financial Products
Amongst Top 10 Investment Bankers
India’s #1 Registrar
& Securities
Transfer Agent
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Sound research team in equities, F&O, income tax, insurance, mutual funds
An ever expanding network of branches to provide you service at your door step
A wide basket of products which includes:- stock broking, commodity broking, derivatives trading, insurance broking, tax planning, mutual funds advice, property services etc.
Personalized service catering to your unique tastes and requirements
Over a 2 decade of experience in the financial services spectrum
A member of FPSB and an exclusive team of CFPs involved in the preparation of financial plan
An ever expanding product portfolio consisting of future products like Mint Street, co-branded credit cards etc.
An efficient and effective top management
Professional management
PASSION for making you financial successful.
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Looking forward to
making you financially
successful.
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AnyQuestions ?
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Thank YOU