FINANCIAL PLANNING &WEALTH MANAGEMENT AIM INVESTMENT CONSULTANTS

AGENDA Introduce you to the concept of financial planning process. Impart knowledge which help you offer additional services to existing clients. Prepare you for the future (3yrs hence)-where in you will be able to charge a fee for an advice.

Introduce you to the concept of financial planning process.

Impart knowledge which help you offer additional services to existing clients.

Prepare you for the future (3yrs hence)-where in you will be able to charge a fee for an advice.

ECONOMIC PURPOSE Economic purpose of life—to achieve. Goals.. Objectives. aspirations. Through creation of wealth by…. Creating new wealth… growing existing wealth….protecting existing wealth Creation of wealth depends…. Personal earning potential ….investment assets.

Economic purpose of life—to achieve. Goals.. Objectives. aspirations.

Through creation of wealth by…. Creating new wealth… growing existing wealth….protecting existing wealth

Creation of wealth depends…. Personal earning potential ….investment assets.

Our aspirations Dream car A beautiful house Children's marriage Holiday & tours Happy retirement

Dream car

A beautiful house

Children's marriage

Holiday & tours

Happy retirement

Why financial planning? The only permanent thing in life is change! Life is uncertain. Don’t we all want to lead a worry-free and financially secure life? We should be able to deal with all kind of risks in life.

The only permanent thing in life is change!

Life is uncertain.

Don’t we all want to lead a worry-free and financially secure life?

We should be able to deal with all kind of risks in life.

Financial planning Financial Planning is the process of identifying a person's financial goals, evaluating existing resources, and designing the financial strategies that help the person achieve those goals.

Financial Planning is the process of identifying a person's financial goals, evaluating existing resources, and designing the financial strategies that help the person achieve those goals.

What if no financial planning….? Example: Michael Gerard tyson Former American world heavy weight boxing champion. Youngest man to have won a boxing world heavy weight title belt. Made US$30 million during his career. Declared bankrupt in 2003 Reason: Indiscriminate Spending No Financial planning

Example:

Michael Gerard tyson

Former American world heavy weight boxing champion.

Youngest man to have won a boxing world heavy weight title belt.

Made US$30 million during his career.

Declared bankrupt in 2003

Reason:

Indiscriminate Spending

No Financial planning

What if sound financial planning? Example: Kapil Dev Captioned India to their maiden and only cricket world cup 1983. 5%stake in Zicom Electronics Invested money in his own Kapil,s Eleven restaurant and Kaptain,s retreat hotel. Established a company Dev Musco Lighting pvt ltd. Results….. He is living comfortably even after retirement

Example:

Kapil Dev

Captioned India to their maiden and only cricket world cup 1983.

5%stake in Zicom Electronics

Invested money in his own Kapil,s Eleven restaurant and Kaptain,s retreat hotel.

Established a company Dev Musco Lighting pvt ltd.

Results….. He is living comfortably even after retirement

Components of financial planning Financial planning comprises: Insurance planning Investment planning Tax planning Estate planning Retirement planning

Financial planning comprises:

Insurance planning

Investment planning

Tax planning

Estate planning

Retirement planning

Why insurance planning? Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't need it again! Insurance is not for the person who passes away, It is for those who survive.

Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't need it again!

Insurance is not for the person who passes away, It is for those who survive.

What is insurance planning? Insurance planning takes into account that surround you and then provides an adequate coverage against those risks. Insurance is most common method used for transferring risks. It shifts the risk from an individual to a group. It also provides a means for paying unforeseen losses. Insurance provides an important means of preventing risk from interfering with your financial objectives.

Insurance planning takes into account that surround you and then provides an adequate coverage against those risks.

Insurance is most common method used for transferring risks. It shifts the risk from an individual to a group. It also provides a means for paying unforeseen losses. Insurance provides an important means of preventing risk from interfering with your financial objectives.

What is investment planning? Once we have saved enough money for emergencies, how can we grow our wealth? Investment refers to a commitment of funds to one or more assets that will be held over some future time period.

Once we have saved enough money for emergencies, how can we grow our wealth?

Investment refers to a commitment of funds to one or more assets that will be held over some future time period.

Why investment planning? All of us work for money. It is equally important to ensure that money works for us. We invest to improve our future welfare. Funds to be invested come from assets already owned, borrowed money, and savings or foregone consumption. By foregoing consumption today and investing the savings, we expect to enhance our future consumption possibilities.

All of us work for money. It is equally important to ensure that money works for us.

We invest to improve our future welfare. Funds to be invested come from assets already owned, borrowed money, and savings or foregone consumption.

By foregoing consumption today and investing the savings, we expect to enhance our future consumption possibilities.

Paying tax It would be great if all us could pay our taxes with a smile on our face, but unfortunately, this is not so Therefore, the question arises “How to minimize our tax liabilities?”

It would be great if all us could pay our taxes with a smile on our face, but unfortunately, this is not so

Therefore, the question arises

“How to minimize our tax liabilities?”

Ways to reduce tax liabilities! Three ways used by the taxpayers are Tax Evasion Tax Avoidance Tax Planning Tax Evasion means trying to reduce taxes by concealing income, inflation of expenses, falsification of accounts and willful violation of provisions of the income- tax Act. Tax Avoidance means minimizing the incidence of tax by adjusting the affairs in such a manner that it falls within the four corners of the laws. Tax Planning is an arrangement of financial activities in such a way that maximum tax benefits, as provided in the income-tax act are availed of. It envisages use of certain exemptions, deductions, rebates and relief's provided in the act.

Three ways used by the taxpayers are

Tax Evasion

Tax Avoidance

Tax Planning

Tax Evasion means trying to reduce taxes by concealing income, inflation of expenses, falsification of accounts and willful violation of provisions of the income- tax Act.

Tax Avoidance means minimizing the incidence of tax by adjusting the affairs in such a manner that it falls within the four corners of the laws.

Tax Planning is an arrangement of financial activities in such a way that maximum tax benefits, as provided in the income-tax act are availed of. It envisages use of certain exemptions, deductions, rebates and relief's provided in the act.

What is estate planning? Estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will. Real property is real estate and personal property includes everything else, for e.g. cars, household items and bank accounts. Estate planning distributes the real and personal property to an individual’s heirs.

Estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will. Real property is real estate and personal property includes everything else, for e.g. cars, household items and bank accounts.

Estate planning distributes the real and personal property to an individual’s heirs.

Why estate planning? Example: Praveen babi considered to be one of the most successful Bollywood activities in the 1970s. She did not leave a will. Results. Fights amongst relatives on her property after her death.

Example:

Praveen babi considered to be one of the most successful Bollywood activities in the 1970s.

She did not leave a will.

Results.

Fights amongst relatives on her property after her death.

Dhriubhai ambani Started the reliance commercial corporation with a capital of Rs.15000/- Reliance Group had a gross turnover of Rs.75000/-crore or USD $15 billion at the time of his death Had not done proper estate planning. His will was not clear.

Dhriubhai ambani

Started the reliance commercial corporation with a capital of Rs.15000/-

Reliance Group had a gross turnover of Rs.75000/-crore or USD $15 billion at the time of his death

Had not done proper estate planning. His will was not clear.

Retirement planning Some may like it and others may not! But retirement is a reality for every working person. It is important to plan for your post- retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer planning.

Some may like it and others may not! But retirement is a reality for every working person.

It is important to plan for your post- retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer planning.

Role, Scope and opportunities for wealth creators In Indian Economy

R etail Financial Services Industry An overview Over 100Million Retail investors and still growing 24000+Bank branches in the country 5000+ Insurance Services Branches 10000+ Brokerages Service Branches 100000 +CA’s Growing number of financial products

An overview

Over 100Million Retail investors and still growing

24000+Bank branches in the country

5000+ Insurance Services Branches

10000+ Brokerages Service Branches

100000 +CA’s

Growing number of financial products

Aspirations to create wealth… Some Statistics from Income Tax dept Rs.200,000+in mutual funds by 320,000+ investors=685,000crore. Rs.100,000+in primary issues by60,00,000investors=Rs.60,000crore. Rs.495,000crore invested in gold Rs.200,000+ spent by 300,000+ credit card holders=Rs.6400 crore. 1000,000cars sold= Rs.5000crores

Some Statistics from Income Tax dept

Rs.200,000+in mutual funds by 320,000+ investors=685,000crore.

Rs.100,000+in primary issues by60,00,000investors=Rs.60,000crore.

Rs.495,000crore invested in gold

Rs.200,000+ spent by 300,000+ credit card holders=Rs.6400 crore.

1000,000cars sold= Rs.5000crores

Mutual Fund Products Tata mutual fund Uti mutual fund Icici pru.mutual funds Kotak mutual funds Sbi mutual funds Birla sunlife mutual fund Sundaram BNP Paribas Hdfc mutual funds Franklin templeton

Tata mutual fund

Uti mutual fund

Icici pru.mutual funds

Kotak mutual funds

Sbi mutual funds

Birla sunlife mutual fund

Sundaram BNP Paribas

Hdfc mutual funds

Franklin templeton

Life Insurance products Icici prud. Life insurance Birla sun life insurance Bajaj allianz hdfc standard life Max. new York life Sbi life ING Vysya Aviva life insurance Sahara life Tata AIG Kotak life insurance Met life

Icici prud. Life insurance

Birla sun life insurance

Bajaj allianz

hdfc standard life

Max. new York life

Sbi life

ING Vysya

Aviva life insurance

Sahara life

Tata AIG

Kotak life insurance

Met life

Health and Property Insurance Royal Sundaram IFFCO-Tokio Untied india Bajaj allianz Icici lombard Cholamandalam MS (general insurance) Hdfc Tata AIG

Royal Sundaram

IFFCO-Tokio

Untied india

Bajaj allianz

Icici lombard

Cholamandalam MS (general insurance)

Hdfc

Tata AIG

Banks Bank of India Icici bank karur Vysya bank Kotak Hdfc bank State bank of India Uti bank HSBC Citi Standard chartered

Bank of India

Icici bank

karur Vysya bank

Kotak

Hdfc bank

State bank of India

Uti bank

HSBC

Citi

Standard chartered

Abundance Bank of india,icici bank, karur vysya bank, Hdfc standard life, fidelity, prud. Icici, Sbi life,uti bank, tata aig, metlife, cholamandalam, tata aig, sundaram bnp paribas, aviva, kotak, tata mutual fund, hsbc, ing vysya. Hdfc bank….

Bank of india,icici bank, karur vysya bank,

Hdfc standard life, fidelity, prud. Icici, Sbi life,uti bank, tata aig, metlife, cholamandalam, tata aig, sundaram bnp paribas, aviva, kotak, tata mutual fund, hsbc, ing vysya. Hdfc bank….

Confusion & fear …need for someone Trustworthy, who can hold his hand

…need for someone Trustworthy, who can hold his hand

What does a personal finance Customer wants? Identity goals that have financial implications—dream home, children’s education, marriage, managing life post retirement Implement Budgeting and spending plans Optimization of insurance Premiums Manage debt Efficiently Identify Investment Asset allocation to meet the goals Take maximum benefit of tax laws and regulation to create additional surplus for investment Distribute wealth according to one’s wish and not according to law

Identity goals that have financial implications—dream home, children’s education, marriage, managing life post retirement

Implement Budgeting and spending plans

Optimization of insurance Premiums

Manage debt Efficiently

Identify Investment Asset allocation to meet the goals

Take maximum benefit of tax laws and regulation to create additional surplus for investment

Distribute wealth according to one’s wish and not according to law

Need for financial Planner 30 year old concept in developed countries Personal finance consumer in more than 20countries depend on financial planners. An emerging profession in India.

30 year old concept in developed countries

Personal finance consumer in more than 20countries depend on financial planners.

An emerging profession in India.

About financial planners Create higher aspirations among consumers to generate wealth Has complete understanding of financial service products available ----Insurance, Investment, Taxation ----Follows established code of ethics Has the ability to build and retain relationship with clients for lifetime Under takes continuous education to serve the needs of the client

Create higher aspirations among consumers to generate wealth

Has complete understanding of financial service products available

----Insurance, Investment, Taxation

----Follows established code of ethics

Has the ability to build and retain relationship with clients for lifetime

Under takes continuous education to serve the needs of the client

Critical role in today’s economy Financially illiterate population Complexity of financial products in the market place Needs some one who can help us dream for higher goals.

Financially illiterate population

Complexity of financial products in the market place

Needs some one who can help us dream for higher goals.

Why it is critical now? Rapidly charging Investment scenario -----No load funds -----Volatile Capital Markets -----Too many choices for investments -----Blurring line between different asset classes

Rapidly charging Investment scenario

-----No load funds

-----Volatile Capital Markets

-----Too many choices for investments

-----Blurring line between different asset classes

What is expected of a financial planner? Money skills Interpersonal skills Knowledge of financial products available in the market Empathy to consumer's needs Ability to execute fiduciary responsibilities

Money skills

Interpersonal skills

Knowledge of financial products available in the market

Empathy to consumer's needs

Ability to execute fiduciary responsibilities

Thank you !!