Financial Planning &Wealth Management


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Financial planning playa avery important roli in our economy..Financial planning is like all other phases of life; it involves choices
Spend now or save for later?
Pay off existing bills or increase retirement savings?
Focus savings dollars on short term or long term goals?
A true financial plan does not focus one aspect or product, but instead seeks to take all areas of planning into consideration when making financial decisions.

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Financial Planning &Wealth Management

  2. 2. AGENDA <ul><li>Introduce you to the concept of financial planning process. </li></ul><ul><li>Impart knowledge which help you offer additional services to existing clients. </li></ul><ul><li>Prepare you for the future (3yrs hence)-where in you will be able to charge a fee for an advice. </li></ul>
  3. 3. ECONOMIC PURPOSE <ul><li>Economic purpose of life—to achieve. Goals.. Objectives. aspirations. </li></ul><ul><li>Through creation of wealth by…. Creating new wealth… growing existing wealth….protecting existing wealth </li></ul><ul><li>Creation of wealth depends…. Personal earning potential ….investment assets. </li></ul>
  4. 4. Our aspirations <ul><li>Dream car </li></ul><ul><li>A beautiful house </li></ul><ul><li>Children's marriage </li></ul><ul><li>Holiday & tours </li></ul><ul><li>Happy retirement </li></ul>
  5. 5. Why financial planning? <ul><li>The only permanent thing in life is change! </li></ul><ul><li>Life is uncertain. </li></ul><ul><li>Don’t we all want to lead a worry-free and financially secure life? </li></ul><ul><li>We should be able to deal with all kind of risks in life. </li></ul>
  6. 6. Financial planning <ul><li>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. </li></ul>
  7. 7. What if no financial planning….? <ul><li>Example: </li></ul><ul><li>Michael Gerard tyson </li></ul><ul><li>Former American world heavy weight boxing champion. </li></ul><ul><li>Youngest man to have won a boxing world heavy weight title belt. </li></ul><ul><li>Made US$30 million during his career. </li></ul><ul><li>Declared bankrupt in 2003 </li></ul><ul><li>Reason: </li></ul><ul><li>Indiscriminate Spending </li></ul><ul><li>No Financial planning </li></ul>
  8. 8. What if sound financial planning? <ul><li>Example: </li></ul><ul><li>Kapil Dev </li></ul><ul><li>Captioned India to their maiden and only cricket world cup 1983. </li></ul><ul><li>5%stake in Zicom Electronics </li></ul><ul><li>Invested money in his own Kapil,s Eleven restaurant and Kaptain,s retreat hotel. </li></ul><ul><li>Established a company Dev Musco Lighting pvt ltd. </li></ul><ul><li>Results….. He is living comfortably even after retirement </li></ul>
  9. 9. Components of financial planning <ul><li>Financial planning comprises: </li></ul><ul><li>Insurance planning </li></ul><ul><li>Investment planning </li></ul><ul><li>Tax planning </li></ul><ul><li>Estate planning </li></ul><ul><li>Retirement planning </li></ul>
  10. 10. Why insurance planning? <ul><li>Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't need it again! </li></ul><ul><li>Insurance is not for the person who passes away, It is for those who survive. </li></ul>
  11. 11. What is insurance planning? <ul><li>Insurance planning takes into account that surround you and then provides an adequate coverage against those risks. </li></ul><ul><li>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. </li></ul>
  12. 12. What is investment planning? <ul><li>Once we have saved enough money for emergencies, how can we grow our wealth? </li></ul><ul><li>Investment refers to a commitment of funds to one or more assets that will be held over some future time period. </li></ul>
  13. 13. Why investment planning? <ul><li>All of us work for money. It is equally important to ensure that money works for us. </li></ul><ul><li>We invest to improve our future welfare. Funds to be invested come from assets already owned, borrowed money, and savings or foregone consumption. </li></ul><ul><li>By foregoing consumption today and investing the savings, we expect to enhance our future consumption possibilities. </li></ul>
  14. 14. Paying tax <ul><li>It would be great if all us could pay our taxes with a smile on our face, but unfortunately, this is not so </li></ul><ul><li>Therefore, the question arises </li></ul><ul><li>“How to minimize our tax liabilities?” </li></ul>
  15. 15. Ways to reduce tax liabilities! <ul><li>Three ways used by the taxpayers are </li></ul><ul><li>Tax Evasion </li></ul><ul><li>Tax Avoidance </li></ul><ul><li>Tax Planning </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  16. 16. What is estate planning? <ul><li>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. </li></ul><ul><li>Estate planning distributes the real and personal property to an individual’s heirs. </li></ul>
  17. 17. Why estate planning? <ul><li>Example: </li></ul><ul><li>Praveen babi considered to be one of the most successful Bollywood activities in the 1970s. </li></ul><ul><li>She did not leave a will. </li></ul><ul><li>Results. </li></ul><ul><li>Fights amongst relatives on her property after her death. </li></ul>
  18. 18. <ul><li>Dhriubhai ambani </li></ul><ul><li>Started the reliance commercial corporation with a capital of Rs.15000/- </li></ul><ul><li>Reliance Group had a gross turnover of Rs.75000/-crore or USD $15 billion at the time of his death </li></ul><ul><li>Had not done proper estate planning. His will was not clear. </li></ul>
  19. 19. Retirement planning <ul><li>Some may like it and others may not! But retirement is a reality for every working person. </li></ul><ul><li>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. </li></ul>
  20. 20. Role, Scope and opportunities for wealth creators In Indian Economy
  21. 21. R etail Financial Services Industry <ul><li>An overview </li></ul><ul><li>Over 100Million Retail investors and still growing </li></ul><ul><li>24000+Bank branches in the country </li></ul><ul><li>5000+ Insurance Services Branches </li></ul><ul><li>10000+ Brokerages Service Branches </li></ul><ul><li>100000 +CA’s </li></ul><ul><li>Growing number of financial products </li></ul>
  22. 22. Aspirations to create wealth… <ul><li>Some Statistics from Income Tax dept </li></ul><ul><li>Rs.200,000+in mutual funds by 320,000+ investors=685,000crore. </li></ul><ul><li>Rs.100,000+in primary issues by60,00,000investors=Rs.60,000crore. </li></ul><ul><li>Rs.495,000crore invested in gold </li></ul><ul><li>Rs.200,000+ spent by 300,000+ credit card holders=Rs.6400 crore. </li></ul><ul><li>1000,000cars sold= Rs.5000crores </li></ul>
  23. 23. Mutual Fund Products <ul><li>Tata mutual fund </li></ul><ul><li>Uti mutual fund </li></ul><ul><li>Icici funds </li></ul><ul><li>Kotak mutual funds </li></ul><ul><li>Sbi mutual funds </li></ul><ul><li>Birla sunlife mutual fund </li></ul><ul><li>Sundaram BNP Paribas </li></ul><ul><li>Hdfc mutual funds </li></ul><ul><li>Franklin templeton </li></ul>
  24. 24. Life Insurance products <ul><li>Icici prud. Life insurance </li></ul><ul><li>Birla sun life insurance </li></ul><ul><li>Bajaj allianz </li></ul><ul><li>hdfc standard life </li></ul><ul><li>Max. new York life </li></ul><ul><li>Sbi life </li></ul><ul><li>ING Vysya </li></ul><ul><li>Aviva life insurance </li></ul><ul><li>Sahara life </li></ul><ul><li>Tata AIG </li></ul><ul><li>Kotak life insurance </li></ul><ul><li>Met life </li></ul>
  25. 25. Health and Property Insurance <ul><li>Royal Sundaram </li></ul><ul><li>IFFCO-Tokio </li></ul><ul><li>Untied india </li></ul><ul><li>Bajaj allianz </li></ul><ul><li>Icici lombard </li></ul><ul><li>Cholamandalam MS (general insurance) </li></ul><ul><li>Hdfc </li></ul><ul><li>Tata AIG </li></ul>
  26. 26. Banks <ul><li>Bank of India </li></ul><ul><li>Icici bank </li></ul><ul><li>karur Vysya bank </li></ul><ul><li>Kotak </li></ul><ul><li>Hdfc bank </li></ul><ul><li>State bank of India </li></ul><ul><li>Uti bank </li></ul><ul><li>HSBC </li></ul><ul><li>Citi </li></ul><ul><li>Standard chartered </li></ul>
  27. 27. Abundance <ul><li>Bank of india,icici bank, karur vysya bank, </li></ul><ul><li>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…. </li></ul>
  28. 28. Confusion & fear <ul><li>…need for someone Trustworthy, who can hold his hand </li></ul>
  29. 29. What does a personal finance Customer wants? <ul><li>Identity goals that have financial implications—dream home, children’s education, marriage, managing life post retirement </li></ul><ul><li>Implement Budgeting and spending plans </li></ul><ul><li>Optimization of insurance Premiums </li></ul><ul><li>Manage debt Efficiently </li></ul><ul><li>Identify Investment Asset allocation to meet the goals </li></ul><ul><li>Take maximum benefit of tax laws and regulation to create additional surplus for investment </li></ul><ul><li>Distribute wealth according to one’s wish and not according to law </li></ul>
  30. 30. Need for financial Planner <ul><li>30 year old concept in developed countries </li></ul><ul><li>Personal finance consumer in more than 20countries depend on financial planners. </li></ul><ul><li>An emerging profession in India. </li></ul>
  31. 31. About financial planners <ul><li>Create higher aspirations among consumers to generate wealth </li></ul><ul><li>Has complete understanding of financial service products available </li></ul><ul><li>----Insurance, Investment, Taxation </li></ul><ul><li>----Follows established code of ethics </li></ul><ul><li>Has the ability to build and retain relationship with clients for lifetime </li></ul><ul><li>Under takes continuous education to serve the needs of the client </li></ul>
  32. 32. Critical role in today’s economy <ul><li>Financially illiterate population </li></ul><ul><li>Complexity of financial products in the market place </li></ul><ul><li>Needs some one who can help us dream for higher goals. </li></ul>
  33. 33. Why it is critical now? <ul><li>Rapidly charging Investment scenario </li></ul><ul><li>-----No load funds </li></ul><ul><li>-----Volatile Capital Markets </li></ul><ul><li>-----Too many choices for investments </li></ul><ul><li>-----Blurring line between different asset classes </li></ul>
  34. 34. What is expected of a financial planner? <ul><li>Money skills </li></ul><ul><li>Interpersonal skills </li></ul><ul><li>Knowledge of financial products available in the market </li></ul><ul><li>Empathy to consumer's needs </li></ul><ul><li>Ability to execute fiduciary responsibilities </li></ul>
  35. 35. Thank you !!