Intouch Volume 1 Issue 2 - Feb 2011

Volume 1 Issue 2

Intouch Monthly newsletter for advisors from Moneytouch
providing you with details on Products, Services, Partners,
Technology, business strategy and much more

Message from the editor This issue
We hope you enjoyed reading our launch issue. We New Products………………Page 2
did get accolades from industry and readers, thank
you very much. Our objective is to share best New
practices and learnings on an on-going basis so that Partners.…….………………..Page 4
our readers can apply it in their day to day business. New
The key development in January was Know Your Services………………………..Page 4
Client (KYC) w.e.f. January 1, 2011, where all International
categories of investors irrespective of amount of Corner ……………………………..Page 4
investment in Mutual Funds are required to comply
with KYC norms. To know more please visit the AMFI Cross sell
website opportunity…..………………….Page 5

The other development which would impact your Technology
business is Know Your Distributor (KYD) - All ARN Development……………………Page 6
holders are required to complete the KYD process by
February 28th, 2011. If the same is not completed by Business
then, payment of commission would be suspended Strategy……………………………Page 7
till the KYD requirements are complied with. To
Client
know more about KYD process, visit AMFI website
Corner………………………………Page 9
In addition to the regular features we have added a
section called for International Corner and Client Partner List………………………Page 10
corner, hope you like it.

Continuing on the cross sell theme we talk about
Lending against Property (LAP) in this issue.

In our last issue we shared what CLOUD computing is
all about, in this use we share what are the benefits
of CLOUD to you as an IFA.

Please make use of the Refer a friend programme
and earn attractive fees.

Look forward to hearing from you at
feedback@touchbase.co.in .

Happy reading.

Intouch V1 I2 [2011]

New Products
Alternate Investments- Real Estate in UK
We are in talks with a leading Real Estate firm from UK, details as under:

The Complete Property Investment Solution produces results. London’s largest, independent,
lettings-only agency. They specialise in finding corporate tenants from top multi-national
organisations. And when we have found you a good tenant our property management service will
take care of the day-to-day running of your property, whether it is collecting the rent or organising
repairs.
* Dedicated lettings service
* Over 50 years’ property experience
* Professionalism
* Reliable tenants
* Local knowledge – nine offices across London, Hong Kong, Singapore and Dubai

An independent property investment service.
They will help you establish your investment objectives and research suitable properties. Will
negotiate the best price on your behalf and manage all the legal aspects of the purchase, right
through to completion.
* Independent, impartial advice
* Over 50 years’ property experience
* Full acquisitions service
* Industry contacts
* Specialist skills

Design-led furnishing packages and refurbishment services. Whether you are looking to replace a
few items of furniture or need a full furniture pack, a single room decorated or a full refurbishment
programme, our inhouse team can handle it all.
* Inspired design, refurbishment and furniture packs * 85% of the properties let within a week *
Specialists in maximising investment potential * Competitive cost * Offices in London and Dubai

The soft furnishings division of In:Style Direct. Having received wide acclaim in mass consumer
media, the brand is noted for its comprehensive range of luxurious and affordable soft furnishings
which are designed and manufactured in-house and seek to enhance any living environment.
* Iconic style * Affordable prices * High quality * Decorative and functional

Visiting India in February
If you or your clients would be keen then let us know as the company is visiting India and holding
meetings with advisors and clients to share their company credentials. If you find them to be
suitable partners then you could look at referring clients to them.
After all investments is all about Trust

Visit their website for details - http://www.brlets.co.uk/

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SMC Wealth Strategic Transfer Portfolio – SMC Wealth Management
It is a combination of equity and debt portfolio with an objective of the generating returns by initially
investing the funds in debt/ liquid instruments and subsequently strategically moving these funds to
equity instruments with an endeavour to generate capital appreciation.
ADVANTAGES OF STRATEGIC TRANSFER
Triple advantage of Equity + Debt + Strategic Investment
Disciplined and Regular Equity Investment: Portfolio seeks to achieve better results by investing
smaller amount regularly.
Rupee Cost Averaging Convenience: Reduces banking and other administrative inconvenience.
Expert Advice: Our well experienced team has a proven record of managing wealth through varied
formats. It is supported by a robust investment process and large research desks at Sanlam, SMC
Global and Sanlam Equity Analytics.
HOW DOES STRATEGIC TRANSFER WORK
Investors money is divided into 2 parts i.e. Debt and Equity. Initially 100% of fund will be invested in
Debt/ Liquid funds and on a regular basis a fixed portion of initial investment gets transferred to
Equity.
The debt investment is done in relatively safe and stable fixed income securities.
Selection of Equities is done by our investment team. At the end of stipulated time period entire
fund will be shifted to Equity.
Key Features
Minimum Investment Rs. 10 Lakhs
Entry Fees Nil
Withdrawal Fees Till 1 year 3%
From 2nd year onwards Nil
Asset Allocation Pattern Equity: 0-100% Debt: 0-100%
Investment Strategy 10% of Initial investment is moved from debt to equity every month
Benchmark 1st year CRISIL Balanced Index;
2nd year onwards Nifty
Corpus Allocation Fees A fees of 2% will be charged for each transfer from Debt to Equity
Annual Management Fees Fund Management fees of 2.5% p.a. of portfolio to be deducted
monthly

Gold Loans
Sweekar Loans from One Capitall has launched short term Personal loans against the pledge of Gold
and jewellery
Loan amount Rs 1 lac to 4 lacs
Interest rate 14%
Repayment 90 days
Processing 72hours
Storage Well tested, vaulted protection of security
Segment Urban Salaries, Self Employed, Low income

Refer a friend campaign continues:
Refer your associates, friends and relative and earn referral fees on their
successful sign up as under:
Classic - Rs 1000 Silver -Rs 2000 Gold- Rs 5000 Platinum- Rs 10000

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New Partners
One Capitall
One Capitall launched by House of Patels, one of the largest logistics conglomerates in Asia with a
strong presence in transportation, door-to-door express cargo, freight forwarding, construction and
Financial Services.

SMC Wealth
SMC Wealth Management Services Ltd. is a wealth management company formed as a joint venture
between Sanlam Group a leading international financial services conglomerate from South Africa
and SMC Group, one of India’s largest equity broking companies. This partnership creates a unique
combination, a combination of local expertise, knowledge and resources with specialist international
wealth management expertise. It offers to its customers a rewarding long term relationship which
centers around customized investment solutions using a wide product suite based on domestic
insights, and global expertise.

New Services
Moneytouch 360 Platform
We are constantly upgrading the platform from the back end without disturbing your operations
unlike desktop programmes. We are now adding the following features based on feedback and
market developments, to know more call our service team
 We will provide direct upload for data from India Infoline broking
 You can now add prospect upload into the platform
 New reports
o A new Multi Asset report (Asset allocation , Investment summary and networth)
o Equity report.
o Prospect MIS for RM
 Improved Financial Planning section
o Level 1 entry for customers/ prospects
o System integration with level 1 entry for existing customers
o Enhanced FP sectional report
o New FP dashboard
o Revised FP offline form
 Calculators : Interest engine, Loan/EMI, PV/FV
 And last but not the least improved look and feel

International corner
Keep yourself updated with what is happening in the world
http://www.ifaonline.co.uk
The premium website for IFAs in UK. Read all about new products, platforms and more. UK is one of
the mature Financial Services markets and gives us an idea how the Indian market could evolve in
the coming years

https://www.sesame.co.uk
One of the premium IFA platform companies in UK who support over 300 IFAs on their platform

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Cross Sell opportunity
Welcome to the world of Cross Selling- Lending against Property
There are various types of loans that are available in the market; one of them is Loan against
Property (LAP).
A very strong and stable asset is property. Loan against property is a very good borrowing option as
there are several advantages of a property, which include possibility of appreciation in value, being
in the nature of a fixed asset, income earning potential and so on. This allows the best use of the
property that is owned and at the same time will enable the raising of funds required for various
purposes. Also, a loan against property comes with a low interest rate compared to that of a
personal loan or home loan. Proper use of the funds will ensure that the maximum benefit is taken
from the position.
Benefits:
Easier To Obtain:
A loan against property is also easier to obtain in terms of clearance and other factors once the
necessary security is available. If the property is available, it does not have a mortgage and can be
given as a security, it will not take much time for getting the entire loan cleared. This is because the
specific steps related to the loan against property will ensure that the process is completed without
much wastage of time.
Adequate Security:
The presence of a property often proves to be an adequate security feature of the loan. Like several
other assets like shares, which might witness a massive reduction in their value, a property does not
witness such a large change in the position. In several cases, the property value actually rises with
each passing year and in such a situation it proves to be an adequate security for the purpose of the
loan.
Larger Loan Possible:
The other benefit for a loan against property is that a larger amount of loan is possible. This depends
upon the property and its value, which allow a bit of flexibility to the borrower. If the funds required
are slightly larger than what the individual can raise through other sources then he/she can go for
the loan against property to raise the necessary amount of funds. There is usually no major
restriction in this regard as long as the loan against property can be serviced and the person then is
able to complete the goals that are related to the requirement of funds.
Use of Idle Property:
In many cases, there are properties that are lying unused for a lot of people. This will not be
beneficial in any way and at the same time various circumstances might also make it difficult to raise
funds from the property unless it is sold off. In such a condition, using this to take a loan against the
property will be a very good way to ensure that the best use is made of the property that is actually
lying idle. This will also ensure that proper use is also made of the asset available with all those
people who want to raise funds.
Moneytouch Mantra:
Leverage your asset if unencumbered to fund productive/ profitable cash positive ventures as you
will need to service the debt and pay the principal to release the property. Not a good idea to
speculate with this asset specially if you are residing in it.
Our Partners:

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Technology developments
Cloud Computing - Benefits
Reduced Data Leakage: How many laptops do we need to lose before we get this? How many
backup tapes? The data “landmines” of today could be greatly reduced by the Cloud as thin client
technology becomes prevalent. Small, temporary caches on handheld devices or Netbook computers
pose less risk than transporting data buckets in the form of laptops. And what about Small and
medium businesses? How many use encryption for sensitive data, or even have a data classification
policy in place?

Updates are seamless
Instead of having to patch each and every individual user, the patches/upgrades are applied to the
server and each user received the updated version the next time they log in.

No legacy
This is a big issue for traditional software vendors. Users who purchase previous versions of a
software almost always will result in legacy versions lying around which need support

Available anywhere, anytime

Less bugs and viruses
There are certainly going to be a lot less bugs in Web based software, due to the fact that it is not
depending on any of the hardware or environment settings in the OS that may usually cause a
problem. No installation, means no viruses. Start shorting all those Anti-Virus stocks! Enough said!

Piracy-proof
Here is a big one. Imagine a world without software piracy. That world is here, and Web Applications
are the solution to that problem.

Low-cost support and maintenance
No need to have expensive operating system gurus on hand to help with installation problems.

User data is kept safe in hosting environment
Using providers like Rackspace or Amazon or Net Magic will go a long way in reassuring your
customers that their data is safer than on their desktop!

Low cost distribution
No more channel reliance. Reach out to new cities and towns with no cost on IT infrastructure. Go
for the billion users online!

Access to the entire assets of the Web (APIs, widgets, messaging, collaboration)
By being wired into the web, Web Apps are able to integrate seamlessly and are a lot more
customizable, than traditional software applications.

Mobile is here
Compiled desktop applications are going to have a hard time being adapted for mobile devices. Web
apps are ready made (in most cases).

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Business Strategy
AMCs should nurture IFAs
Inspired by BCG CAMs report

Of the 100,000 IFAs registered with Association of Mutual Funds in India (AMFI) nearly 80
percent of IFAs sell other financial products in addition to mutual funds—like life insurance,
small savings, and general insurance. Many are also dormant and inactive as well.

IFAs dominate in smaller cities and retail segments and as a distributor type have gained
share over the past few years. If one disaggregates more, it is clear that large IFAs are
gaining share rapidly at the expense of the small IFAs and other distributors.

Recent regulatory changes have caught most IFAs unprepared, and they are now looking to
enhance their capabilities so as to be able to offer better advice and service.

As of March end IFA’s have a 29% share which makes it one of the larger distributors for the
industry and a channel that needs to be managed effectively

IFAs are hurting with recent regulatory changes especially after the removal of entry load on
all schemes and introduction of transparency in payment of the commissions. While all
distributor categories have been affected, the IFAs seem to have been impacted most
negatively. They are looking to enhance their capabilities.

IFAs, especially medium and small IFAs, are struggling. The many meetings I have had with
IFAs, they clearly want to wait to decide on the future course of action as they feel things
will settle down. The reality is that the dust is not going to settle in a hurry. The only thing
that is going to be constant for the next few years is Change. Being in denial or
procrastinating will not help, one needs to adjust business models now and move ahead.

The report states that now the IFAs are awakening to the need for change and improvement
and prepare for the future. They are looking to enhance their capabilities on four key
dimensions
1. Business build, which covers improving selling capabilities to convert leads into business
and business into relationships, as well as improving preparation for meetings.
2. Improved advisory, which includes developing the ability to truly understand client
needs and to offer advice on portfolio allocation and ongoing portfolio management.
3. Ease of operations, which is about leveraging technology and tools to make the
administrative elements easier so that the IFAs can spend more time on business
building and sales activities, as well as to help reduce costs.
4. Improved client services, which is again about leveraging technology and tools to offer
better services to clients— for example, offering clients an online account, offering
ongoing rebalancing support, providing regular performance updates, among other
services. It will be interesting to observe how AMCs, industry bodies like AMFI, and
other third party service providers rally around these needs and support and equip them
for the future.

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Once IFAs realise the need for change they need to put their plan into action. What options
do IFAs have to build their business for the future, I share 4 options:

1. Referral Arrangement - IFA can refer business to other competent partners whom
they choose for products and services they feel they have a gap, such as Research,
Financial planning, Stock broking, Lending, Commodities, insurance etc. IFA can
choose the partners, change partners and clearly it helps retain one’s independent
status but increases coordination with multiple partners.

2. Create an Informal Group - The IFAs can get together informally as a
group/association which can help bargain better commissions from product
providers with limited binding on each other. Ring fences revenues but does not take
the business to the next level.

3. Become a Company - IFA can invest in building the corporate entity, become a
regional /national distributor, invest in branding, people, products, reach, resources
etc. This calls for greater commitment and deep pockets.

4. Platform - This is the ideal way forward till one can transition to being a company as
per point 3. IFA will need to analyse the multiple players and options that are
available. It is easy to just merge the business with a larger player to get benefit of
better revenue, better products, and better support. But one needs to understand
the negatives to such a deal. Choose a platform partner who gives you in addition
• Freedom to build your business in your name
• Does not come with strings attached of AUM transfer, fee sharing on primary
lines of product, restricted partner list.
• Should create opportunities to earn more by cross selling multiple products and
increasing product penetration.
• Provide support across Operations, Marketing and Training

The Future
The IFAs have to choose wisely what they need to do to build their business. If they are
committed to their business and wish to grow then I am sure they will make a right decision.

I strongly feel the manufacturers have a crucial part in transitioning the IFAs to the next
level. By supporting the IFA to choose the vehicle for future business growth AMCs will
develop the channel with a value proposition that is sustainable. Regular Marketing
activities will continue tactically but to build long term engagement AMCs should be seen as
business enablers and partner at the IFAs business and not limit it to Mutual Funds only.

We know 80% Advisors are selling multiple products hence by supporting them with the
right business solution AMCs will be seen in better light by the IFA. The loyalty that they
build will get them to be the top 3 funds distributed by the IFA. A smart strategy to adopt as
it addresses few of the commandments for success for the AMCs such as
• builds a value proposition for the IFAs
• gets the AMCs product going with the IFAs
• Empowers the IFA to face the growing needs of their clients

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• Create a support mechanism for smaller IFAs
• Develop a plan to get ‘retail’ long–term money

Small/Medium IFAs are being nudged out of the business which may not hurt the industry in
the short term; the key challenge will be felt in the long run as they provide the pool for the
successful IFAs of the future. AMCs can do a lot to nurture and grow this key partner in their
distribution mix.

Client Corner
Investments you can offer to reduce your clients; tax burden
Most investors find themselves scrambling during the last quarter to invest in tax-saving avenues.
Since this is the quarter when you focus on tax savings investments we thought of sharing all the
possible options you can assist your clients to take a look at:

Life insurance (including ULIPS)- The premium paid for a life insurance policy that covers you, your
spouse and dependent children is eligible for deduction of up to Rs 1 lakh under Section 80C.

Health insurance - You can claim a deduction of up to Rs 15,000 under Section 80D for the premium
paid for a health cover. You can also buy health insurance for parents for an additional deduction of
up to Rs 15,000. The limit is increased to `20,000 in case of senior citizens.

PPF - The maximum deduction allowed is Rs 70,000.

NSCs and FDs - Investments in National Savings Certificates (NSCs) are as secure as those in the PPF.

Infrastructure bonds - These bonds can help to further lessen your tax burden as investments in
infra bonds can be claimed as an additional deduction up to Rs 20,000 under Section 80C, beyond
the Rs 1-lakh limit.

Senior citizens savings scheme - This scheme offers a return of nine per cent, higher than those
offered by most other safe instruments. However, the income is taxable though it should not affect
you much as the tax exemption limit for senior citizens is Rs 2.4 lakh per year. Investment in this
scheme is again eligible for deduction under Section 80C.

Equity-linked savings schemes - ELSS have an edge over other tax-saving instruments as these have
the largest equity exposure compared with others. May not be everyone's cup of tea as they are also
considered more risky.

8|Page


List of partners
Our partner list, contact our service team for details.
Home Loans Business Loans Mutual Funds Bonds
Axis Bank Bajaj Finance AIG Investments SHCIL
Barclays Bank Barclays Bank Axis MF Fixed Deposits
IDBI Bank Barclays Finance Baroda Pioneer HDFC Ltd.
IndiaBulls Fullerton India Benchmark LIC Hsg. Finance
Kotak Mahindra Bank Future Money Bharti AXA SHCIL
Religare Finvest IndiaBulls Birla SunLife PMS
SBI (Mumbai only) Kotak Mahindra Bank BNP Paribas HDFC
Stanchart* Religare Finvest Canara Robeco HSBC
Tata Capital Stanchart DSP Blackrock Karma Capital
Loans against Tata Capital DWS Investments SMC Wealth Mgmt.
property
Axis Bank Personal Loans Fidelity Art
Bajaj Finance Barclays Finance Franklin Templeton Patrimonio
Barclays Bank Fullerton India HDFC REITs
Barclays Finance Kotak Mahindra Bank HSBC Aditya Birla PE
Cholamandalam Reliance Consumer ICICI Prudential Milestone
Fullerton India Religare Finvest IDBI Property
Future Money Stanchart IDFC MF HIRCO
IDBI Bank Tata Capital ING Hiranandani
IndiaBulls Loans against Shares JM Financial IndiaBulls
Kotak Mahindra Bank Aditya Birla Finance JP Morgan Equities*
Religare Finvest Bajaj Finance Kotak Mahindra MF PINC Money
Stanchart Cholamandalam L & T MF Derivatives*
Tata Capital HSBC Mirae Asset PINC Money
Commercial Prop. ICICI Bank Morgan Stanley MF Demat*
Loans
Cholamandalam Reliance Consumer Motilal Oswal PINC Money
IndiaBulls Loans against MFs Principal PNB Life Insurance*
Tata Capital Aditya Birla Finance Reliance HDFC Securities
Auto Loans Bajaj Finance Religare PINC Money
Kotak Mahindra Bank Cholamandalam SBI MF General Insurance*
Federal Bank HSBC Sundaram ICICI Lombard
Tata Capital Education Loans Tata MF Small Savings*
Gold Loans Credila Jayesh Manek
One Capitall *Referral arrangement /Conditions apply.
Reliance Consumer Subject to change without notice

Disclaimer
This publication is for private publication only. Each recipient of this document should make such investigations as it deems necessary to
arrive at an independent evaluation and should consult its own advisors to determine the merits and risks of such an investment. The
investment discussed or views expressed may not be suitable for all investors The information contained herein is obtained and collated
from sources believed reliable and Moneytouch has not independently verified all the information given in this document. Accordingly, no
representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions
contained in this document
For any suggestion, feedback please email to Editor Intouch at feedback@touchbase.co.in

9|Page

Intouch Volume 1 Issue 2 - Feb 2011

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Intouch Volume 1 Issue 2 - Feb 2011