A SUMMER INTERNSHIP PROJECT REPORT

On

“Financial advisors’ knowledge about the investment habits of their clients”

At

NJ INDIA INVEST PVT. LTd.

In partial fulfillment of the requirement of the Award for the degree of

Master of Business Administration

Submitted to:

Gandhinagar Institute of Technology

(A Center for Management Studies)

(An ISO 9001:2008 Certified)

(AICTE approved & Affiliated to Gujarat Technological University)

Prepared by:

Name: AviPadia

Enrollment No: 117150592010

Year- 2012-2013

DECLARATION

I, AVI YOGESHBHAI PADIA, hereby declare that this project is genuine and confide work

prepared by me and submitted to Gandhinagar Institute of Technology for the MBA-II

semester.

To the best of my knowledge and belief, the matter presented in this project has not submitted

earlier for the award of any other university.

Date: _________________

Place: Ahmedabad (AVI Y. PADIA)

EXECUTIVE SUMMARY

As a part of my study curriculum it is necessary to conduct a summer training project. It provides

us an opportunity to understand particular topic in depth and which leads to through to that topic.

My topic for the summer training project is title “financial advisors’ knowledge about the

investment habits of their client.”

This project is divided into two parts. The first part gives an insight about Mutual Fund and its

various aspects, the Company Profile, Objectives of the study. One can have a brief knowledge

about Mutual Fund and its basics through the Project. The second part of the Project consists of

data, Research Methodology and its analysis collected through survey done on 100 people.

From 5th of June I had start my training at NJ India Invest (Ahmedabad-Maninagar). On the first

day of the training I had started getting knowledge about how advisory company can work, what

is mutual funds, how many MNC are there in mutual funds, over view of the company,

procedure of investment in mutual funds and other so many things I knew in first few days.

Company wants to increase their business so it is necessary to convince financial advisors for

AMFI exam. And also it is necessary to understand the investment habits of the client. With the

help of this research manager can get depth knowledge about investment habits of customer and

also convince financial advisors for AMFI exam and for NJ sub partner.

After getting information about company and mutual funds, there is one topic provided by

manager for research so my topic is “Financial advisors knowledge about the investment habits

of their client.” So after getting research topic I have started to prepare questionnaire. I have met

personally all the financial advisors nearest to maninagar in Ahmedabad. They have answered

very genuinely and truly. Their co-operation was very nice while filing up of the questionnaire

and to understand the Agent guide and respond according to that.

ACKNOWLEDGEMENT

Learning is a delightful experience and in the ocean of knowledge you can acquire limitless

understanding through your passion for it. And in my passion to know more, it has been

memorizing extravagance of memorable experience. At this enlightening moment of completion

of my project, I feel obliged to record my heartfelt and deep gratitude to those who have helped

me.

I am thankful to Mr. Jignesh shah who allowed me to be a part of his organization and provided

me necessary guidance throughout my tenure and I am also thankful to Mr. ParagSoni, Mr.

Bhavesh Joshi and the staff of the organization that directly or indirectly helped me.

I am sincerely thankful to all the faculty members of GIT who directly or indirectly supported

me during the project. I am also thankful to all the non-teaching staff of GIT for their kind

support.

AVI Y. PADIA

OBJECTIVE OF THE STUDY

OBJECTIVE OF THE STUDY

For the growth of the company it is necessary to increase mutual funds advisors. And also it is

necessary to understand the investment habits of the client. So my topic is “Financial advisors

knowledge about the investment habits of their client.”With the help of this research manager

can get depth knowledge about investment habits of customer and also convince financial

advisors for AMFI exam and for NJ sub partner.

To know the investment habits of investors in Ahmedabad

To help company to Convince financial advisors for become N.J. sub partners

To know the factors considered by the people before they invest their money in

any instrument

To know the market potential of mutual funds

To know the investment objective of investors

To know the investors’ preference level about mutual funds

OVERALL INDUSTRY IN INDIA

HISTORY OF INDIAN MUTUAL FUND INDUSTRY

The origin of mutual fund industry in India is with the introduction of the concept of mutual fund

by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987

when non-UTI players entered the industry. In the past decade, Indian mutual fund industry had

seen a dramatic improvement, both quality-wise as well as quantity-wise. Before, the monopoly

of the market had seen an ending phase; the Assets under Management (AUM) were Rs. 67bn.

The private sector entry to the fund family rose the AUM to Rs. 470 bn in March 1993 and till

April 2004, it reached the height of 1,540 bn. Putting the AUM of the Indian Mutual Funds

Industry into comparison, the total of it is less than the deposits of SBI alone, constitute less than

11% of the total deposits held by the Indian banking industry. The main reason of its poor

growth is that the mutual fund industry in India is new in the country. The mutual fund industry

can be broadly put into four phases according to the development of the sector.

Note:

Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit

Trust of India effective from February 2003. The Assets under management of the Specified

Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the

industry as a whole from February 2003 onwards.

Each phase is briefly described as under.

First Phase – 1964-87

This phase began with the inception of the Unit Trust of India (UTI). It remained the only mutual

fund player in the country till 1987. UTI started its operations in July 1964. it was set up by the

Indian Government with a view to augment small savings in the country and to channelize these

savings to the capital markets. UTI witnessed a slow and steady growth over the 1970s and the

1980s. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India

(IDBI) took over the regulatory and administrative control in place of RBI.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by

Canra bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank

Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC

established its mutual fund in June 1989 while GIC had set up its mutual fund in December

1990.At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004

crores.The total number of schemes increasing to about 167 by the end of 1994.

Third Phase – 1993-2003 (Entry of Private Sector Funds)

This phase marked the entry of private sector funds. The phase also signaled the intensification

of the competition. Both domestic and foreign players entered the market, offering a wide variety

of schemes to investors. Kothari Pioneer Mutual Fund was the first private sector fund to be

established in association with a foreign fund.

Fourth Phase – since February 2003

This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the

Specified Undertaking of the Unit Trust of India with AUM of Rs.29,835crores (as on January

2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and

under the rules framed by Government of India and does not come under the purview of the

Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB,

BOB and LIC. It is registered With SEBI and functions under the Mutual Fund Regulations.

With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000crores

of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund

Regulations, and with recent mergers taking place among different private sector funds, the

mutual fund industry has entered its current phase of consolidation and growth. As at the end of

March, 2008 there were 35 funds, which manage assets of Rs 505152 crores.

Different AMC Involve in Mf und its’ Market Share

Mutual Funds Name (MNC) Average Assets Under Management (AAUM)

Axis Mutual Fund 8874.56Birla Sun Life Mutual Fund 61174.14BNP Paribas Mutual Fund 4412.14DSP Blackrock Mutual Fund 29298.27Franklin Templeton Mutual Fund 36081.17HDFC Mutual Fund 90085.72ICICI Prudential Mutual Fund 68816.49IDBI Mutual Fund 5482.14IDFC Mutual Fund 25763.61ING Mutual Fund 1545.48JM Financial Mutual Fund 5885.14Kotak Mahindra Mutual Fund 26236.41L&T Mutual Fund 3897.61Principal Mutual Fund 4126.28Reliance Mutual Fund 80231.99SBI Mutual Fund 42671.35Sundaram Mutual Fund 14098.53Tata Mutual Fund 19818.27UTI Mutual Fund 58922.15

Average AUM of MF industry decresed by 4.65% in January-March 2012

Average assets under management of the mutual fund industry decreased by 4.65% during the January-

march 2012 quarter compared to October-December 2011 quarter. According to the data provided by

the association of mutual funds in India, the combined AAUM of mutual funds stood at Rs. 6.71 lakh

crore at the end of March 2012, which had decreased by Rs. 6.87 lakh crore as at the end of December

2010. Among the 44 fund houses.

Source: FUNDS WATCH (Jan-march 2012)

CORPORATE PROFILE OF THE COMPANY

INTRODUCTION

NJ India Invest was started in 1994 to cater to the growing financial services sector. NJ India

Invest evolved out as a client focused need based investment advisory firm. At NJ mutual fund

as one of the best investment avenue available to satisfy any kind of investment need. NJ gained

expertise in analyzing mutual fund schemes, and an in-depth study on various parameters is

carried out on a regular basis.

NJ India Invest Pvt. Ltd. is one of the leading advisors and distributors of financial products and

services in India. Established in year 1994, NJ has over a decade of rich exposure in financial

investments space and portfolio advisory services. From a humble beginning, NJ over the years

has evolved out to be a professionally managed, quality conscious and customer focused

financial / investment advisory & distribution firm.

ABOUT NJ INDIA INVEST COMPANY

HISTORY AND EVOLUTION

NJ India Invest Pvt. Ltd. is one of the leading advisors and distributors of financial products and

services in India. NJ India Invest pvt. Ltd. was started in 1994 to cater to the growing financial

services sector. NJ India invests evolved out as a client focused need based investment advisory

firm. At NJ regard mutual fund as one of the best investment avenue available to satisfy any kind

of investment need. N.J. has gained expertise in analyzing mutual fund schemes, and an in-depth

study on various parameters is carried out on a regular basis. NJ has over a decade of rich

exposure in financial investments space and portfolio advisory services. From a humble

beginning, NJ over the years has evolved out to be a professionally managed, quality conscious

and customer focused financial/investment advisory & distribution firm.

To the advisors, N.J. offer a 360° comprehensive business platform with unmatched IT solutions,

empowering them to set the best practice standards and deliver real value to their customers. N.J.

has aheadquartered in Surat, India, and has more than INR 10,000 Crore plus of mutual fund

assets under advice, with a wide presence at over 104 locations in 21 states in India. The

numbers are reflections of the trust, commitment and value that NJ shares with 11 Lac plus

customer base with over 14000+ Advisors.

 

VISION, MISSION AND PHYLOSOPHY

Vision:

Creating Wealth Transforming Lives

Total Customer Satisfaction

Commitment to Excellence

Determination to Succeed with strict adherence to compliance

Successful Wealth Creation of our Customers

Mission:

N.J. work towards building trusted relationship with our stakeholders, for inclusive growth

through constant process of innovation, time bound implementation & execution of ideas and

technological developments. We stretch our means and go overboard to make sure that our

clients' aspirations, dreams and expectations are met with, through high service standards.

Philosophy

At NJ our Service and Investing philosophy inspire and shape the thoughts, beliefs, attitude,

actions and decisions of our employees. If NJ would resemble a body, our philosophy would be

our spirit which drives our body.

Service Philosophy: 

N.J.INDIA INVETS primary measure of success is customer satisfaction. We are committed to

provide our customers with continuous, long-term improvements and value-additions to meet the

needs in an exceptional way. In our efforts to consistently deliver the best service possible to our

customers, all employees of NJ will make every effort to:

think of the customer first, take responsibility, and make prompt service to the customer a priority

deliver upon the commitments & promises made on time

anticipate, visualize, understand, meet, exceed our customer's needs

bring energy, passion & excellence in everything we do

be honest and ethical, in action & attitude, and keep the customer’s interest supreme

strengthen customer relationships by providing service in a thoughtful & proactive manner and meet the expectations, effectively 

Investing Philosophy: 

We aim to provide Need-based solutions for long-term wealth creation N.J. aim to provide all

customers of NJ, directly or indirectly, with true, unbiased, need-based solutions and advice that

best meets their stated & un-stated needs. In our efforts to provide quality financial & investment

advice, we believe that.

Clients want need-based solutions, which fits them

Long-term wealth creation is simple and straight

Asset-Allocation is the ideal & the best way for long-term wealth creation

Educating and disclosing all the important facets which the customer needs to be aware of, is important 

The solutions must be unbiased, feasible, practical, executable, measurable and flexible

Constant monitoring and proper after-sales service is critical to complete the on-going process

RECOGNITIONS

Some of the awards & recognitions that we have received in past.. 

Year 2000: 

For Outstanding Performance presented by Chairman, Prudential Plc. at London

Year 2002:

For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London

Year 2003:

For Outstanding Performance presented by Group Chief Executive, Prudential Plc. at London

Year 2004:

Among Most Valued Business Associates presented by HDFC Standard Life at Edinburgh,

Scotland

Year 2004:

For Outstanding Performance by Deputy CEO, Prudential Singapore at Malaysia

Year 2006:

Award for mobilising the Highest Number of SIPs at National Level by Fidelity Mutual Fund Plc

at Mumbai

Year 2006:

Award – Vietnam 

MANAGEMENT

The management at NJ brings together a team of people with wide experience and knowledge in

the financial services domain. The management provides direction and guidance to the whole

organization. The management has strong visions for NJ as a globally respected company

providing comprehensive services in financial sector.

The 'Customer First' philosophy in deeply ingrained in the management at NJ. The aim of the

management is to bring the best to the customers in terms of 

Range of products and services offered

Quality Customer Service

All the key members of the organization put in great focus on the processes & systems under the

diverse functions of business. The management also focuses on utilizing technology as the key

enabler for all the activities and to leverage the technology for enhancing overall customer

experience. 

The key members of the management are:

Mr. NeerajChoksi Jt. Managing Director

Mr. Jignesh Desai Jt. Managing Director

Key Sales Team:

Mr. Misbah Baxamusa National Head

Mr. Naveen Rathod V.P. (Sales)

Mr.KulbhushanNandwani A.V.P. (Marketing)

Mr. PrashantKakkad A.V.P. (Sales)

Key Executive Team:

Mr. Shirish Patel Information Technology

Mr. AbhishekDubey Business Process

Mr. Vinayak Rajput Operations

Mr. Dhaval Desai Human Resources

Mr. Col. Dixit Administration

Mr. TejasSoni Finance

Mr. Viral Shah  Research

Mr. RakeshTokarkar Compliance

PRODUCTS AND SERVICES

OF THE COMPANY

PRODUCTS AND SERVICES:

NJ offers advisory and distribution services on the following products.

Investment Products:

Mutual funds – covering all AMCs & all schemes, 

Fixed Deposits of companies, 

PMS products (portfolio management system) 

Government/RBI bonds, 

Infrastructure Bonds, 

Approved securities for charitable trusts, etc

Real Estate:

Residential properties

Commercial properties

Training & Education:

Certification training courses 

AMFI

CFP 

Training products 

SERVICES

Trading and demat account

NJ India Invest Pvt Ltd offers benefits of trading and depository services under one roof. NJ is

registered as a Member with Bombay Stock Exchange (BSE) & National Stock Exchange (NSE).

NJ is also registered as a Depository Participant of CDSL. Dematerializations and trading in the

demat mode is the safer and quicker alternative to holding physical securities. Under the

depository services the securities are held in electronic form for the investor directly by

Depository. At NJ, are committed to provide a complete depository service which is convenient,

safe and secure. Customers can approach the DP Helpdesk for any queries & grievances that they

may have.

SERVICES OFFERED BY NJ INDIA INVEST

NJ Funds services

Mutual Fund Nest

Web Nest

Wealth Nest

Financial Planning Nest

CRM Nest

Life Nest

Mutual Fund Nest

The Mutual Fund Nest is a unique platform wherein your clients have a separate mutual fund

investment account, available online, automatically reflecting all mutual fund transactions routed

through you.

This service will be great for all your mutual fund investors investing through you. They will

truly appreciate this 'Complete Online Mutual Fund Investment Account' with truly

comprehensive, insightful reports available to them. This service is a basic service availed by all

NJ Fundz Partner

Features

Unique

On-line Automatic

Comprehensive

Web Nest

Web Nest is a great product and a must for any advisor. It basically is a service wherein you get

your own branded website with certain additional features/contents along with a Client Desk

from where your Clients can login to their on-line accounts. You will have a choice of selecting

the domain name as - www.yourname.njfundz.com for your website.

Features

Your Brand

On-line Automatic

Comprehensive

Wealth NEST

Wealth Nest is a unique, revolutionary product/platform wherein your client will have a

complete investment account covering all the investment assets. You can offer this unique,

comprehensive investment account to your selected important clients.

This service is ideal for your big clients - HNIs and Corporate alike, where you can make a head

start with this product and impress them and make them your loyal clients. Such an integrated

product with the quality, scope of reports is unique in the industry.

Features

Unique

Assets Covered

On-line Automatic

Comprehensive

Financial Planning Nest

As an advisor, you have the onus to undertake complete Financial Planning for your clients.

Financial Planning is in fact a must for every individual. A detailed Financial Plan would make it

possible for your clients to achieve their goals and objectives in life. At NJ we realize the

importance of Financial Planning (FP), both from the perspective of an Advisor and a Customer.

NJ FP Nest is an online zone where you as an advisor would be in a position to prepare detailed

Financial Plans for your Clients. The Financial Plans of the clients would be saved for your

future references and for ongoing monitoring of the Plans. The FP Nest would allow you to plan

for the various goals and objectives for your clients, and also take print-outs of the same so as to

present it to your clients. You can also prepare Financial Plans for your prospective clients from

the FP Nest… Needless to say, the FP Nest would make financial planning process, a very easy,

simple to understand exercise for you to undertake…

FP Nest Features:

Goal Planning for:

Children's Education

Children's Marriage

Retirement

Purchase of Home \ Car

Protection to Family

Taking in to consideration

➢ Risk profile of client

➢ Savings Potential

➢ Existing Investments

➢ Existing Protection

CRM Nest

Customer Relationship Management forms a crucial part in establishing a growing and healthy

relationship with your clients. Customer loyalty and satisfaction plays a very important role in

the success of any Advisor. Studies have shown that it costs 7 times more to acquire a client than

to retain a client. Hence proper customer relationship management (CRM) forms an important

element in the overall success of the advisory business.

Realizing the importance of CRM, NJ will be soon launching CRM Nest. This module will help

advisors to effectively manage their clients and provide quality services to them. The CRM Nest

will also allow you to know your customers better. This is also very crucial since different

customers have different expectations from you. The CRM Nest will also allow you to manage

your time more productively and will help you streamline your processes in a better way.

CRM Nest Features:

Client Service Management

Client Business

Reports Time Management

Automated Utilities

Life Nest

The existing hectic lifestyles and increasing complexities and uncertainties in life have made

protection a very crucial goal for each of us. Adequate protection of family in advent for any

unforeseen events or circumstances should be the first task of any individual. As an advisor, you

have the onus of helping your clients get proper protection at all times.

Life Nest will help you as an advisor to properly plan and monitor the protection of your clients

in a better way. Life nest will also give you information on the existing insurance plans, their

features, etc available in the markets. You may also track your clients' investments in ULIPs and

provide them updated reports on the same. By adding Life Nest, you can better project yourself

as a complete financial advisor to your clients taking care of his investment and protection needs.

PEOPLE AND CULTURE

People

Enthusiasm, Enterprise, Education and Ethics form the four pillars at NJ. At NJ one can witness

the vibrant energy, enthusiasm and the enterprising drive to excel flowing freely throughout the

organization. At NJ can also experience the creativity, one-to-one responsiveness, collaborative

approach and passion for delivering value. At NJ people evolve to be more effective, efficient,

and result oriented. Knowledge is inherent due to the education-centric approach and the

experience in handling different clients groups across diverse product profiles.

NJ understands that the people are the most important assets of the company and it is not the

company that grows but the people. NJ hence undertakes rigorous training and educational

activities for enhancing the entire team at NJ. NJ also believes in the ‘Learning through

Responsibility’ concept for its employees.

For people at NJ success is not a new word, but is a regular stepping-stone to realizing the one

vision that everyone shares.

Culture

At NJ we believe in transforming the lives of our customers. We exist to create a difference – a

change towards a better life. The culture at NJ reflects this responsibility, this dream of

transforming lives. And we at NJ are always excited and enthused in doing so.

N.J.believes in keeping ‘You First’, providing you with products and services that meet you’re

stated and unstated needs. Client satisfaction and client service is the Mantra we constantly

recite. This service oriented philosophy runs throughout the organization, from top to bottom.

Employees are given ample freedom in their work. The objective is to keep an open, healthy

environment with ample scope for enterprise, improvement, innovations and out-of-the box

solutions.

FUNCTIONAL AREAS OF NJ INDIA INVEST

MARKET AND MARKETING FUNCTION

About Mutual Funds

Mutual Funds in India is gaining ground and getting popular as an investment option. The fund

industry has witnessed healthy growth in last five years or so. Mutual Fund is a common pool of

savings created by a number of investors. Mutual Fund is an ideal investment product for an

individual investor. Different investors with common investment objective contribute to create a

common pool of money. This money is then invested by fund manager according to the objective

of the scheme.

The flow chart below describes broadly the working of a Mutual Fund.

Structure of Mutual Funds

In India mutual funds function as trust created under the Indian Trust Act, 1882. There are three

layers of mutual fund in India. (i) Sponsors (ii) Trustee and (iii) Asset Management Company.

Sponsors work as Promoters of the company. They take responsibility of starting mutual fund

business. Sponsors contribute initial capital (40% of net worth of AMC) and appoint Trustees

and Board of Trustees. Board of Trustees act as guardians of investors and ensure that money

invested by investors is used according to the objective of the scheme. Asset Management

Company is the public face of fund management business. Sponsors and Trustees together form

AMC and appoint Fund Manager. Fund manager with help of fund management team makes all

investment decisions.

Sponsor

A sponsor is a body corporate who establishes a mutual fund. It may be one person acting alone

or together with another body corporate. Sponsor must contribute at least 40% of the net worth

of the Investment Managed and meet the eligibility criteria prescribed under the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or

liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial

contribution made by it towards setting up of the Mutual Fund

Board of Trustee:

Mutual fund requires to have an independent board of Trustee, where two third of the trustees

should be independent person who are not associated with the sponsor in any manner. The board

of trustees of the trustee company holds the property of the mutual fund in trust for the benefit of

the unit holders. The board of trustees is responsible for protecting the unit holder’s interest.

Asset Management Company (AMC)

The role of asset Management Company is highly significant in the mutual fund operation. The

AMC is appointed by the Trustee. They are the fund managers i.e. they invest the investors

money in various securities ( equity, debt and money market instruments) after proper research

of market conditions and the financial performance of individual companies and specific

securities in the efforts to meet or beat average market return and analysis. The AMC is required

to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset

management company of the Mutual Fund. At least 50% of the directors of the AMC are

independent directors who are not associated with the Sponsor in any manner. The AMC must

have a net worth of at least 10 crores at all times. They also look after the administrative

functions of a mutual fund for which they charge management fee.

Registrar and Transfer Agent

The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the

Mutual Fund. The Registrar processes the application form, redemption requests and dispatches

account statements to the unit holders.

Custodian

Mutual fund is required by law to protect their portfolio securities by splacing them with a

custodian. Nearly all mutual funds use qualified bank custodians. Only a registered custodian

under the SEBI regulation can act as a custodian to a mutual fund. A custodian handles the

investment back office of a mutual fund.

Types of Mutual Funds

In India, there are many companies, both public and private that are engaged in the trading of

mutual funds. Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial

position, risk tolerance and return expectations etc. The table below gives an overview into the

existing types of schemes in the Industry.

By structure By investment objective

Other scheme

Open ended schemes

Equity funds

Close ended schemes

Interval schemes

Debt funds

Balanced funds

ELSS

TAX SAVING

Sector specific schemes

Index scheme

SIP

Fixed term plan

BY STRUCTURE

Open Ended Schemes

An open-end fund is one that is available for subscription all through the year. These do not have

a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV")

related prices. The key feature of open-end schemes is liquidity.

Close Ended Schemes

A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years.

The fund is open for subscription only during a specified period. Investors can invest in the

scheme at the time of the initial public issue and thereafter they can buy or sell the units of the

scheme on the stock exchanges where they are listed. In order to provide an exit route to the

investors, some close-ended funds give an option of selling back the units to the Mutual Fund

through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one

of the two exit routes is provided to the investor.

Interval Schemes

Interval Schemes are that scheme, which combines the features of open-ended and close-ended

schemes. The units may be traded on the stock exchange or may be open for sale or redemption

during pre-determined intervals at NAV related prices.

BY NATURE

1. Equity fund:

These funds invest a maximum part of their corpus into equities holdings. The structure of the

fund may vary different for different schemes and the fund manager’s outlook on different

stocks. The Equity Funds are sub-classified depending upon their investment objective, as

follows:

• Diversified Equity Funds

• Mid-Cap Funds

• Sector Specific Funds

• Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-

return matrix.

2. Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities, private

companies, banks and financial institutions are some of the major issuers of debt papers. By

investing in debt instruments, these funds ensure low risk and provide stable income to the

investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly

known as Government of India debt papers. These Funds carry zero Default risk but are

associated with Interest Rate risk. These schemes are safer as they invest in papers backed by

Government.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate

debentures and Government securities.

MIPs: Invests maximum of their total corpus in debt instruments while they take minimum

exposure in equities. It gets benefit of both equity and debt market. These scheme

ranks slightly high on the risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs): Meant for investment horizon for three to six months. These funds

primarily invest in short term papers like Certificate of Deposits (CDs) and

Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds provides easy liquidity and

preservation of capital. These schemes invest in short-term instruments like

TreasuryBills, inter-bank call money market, CPs and CDs. These funds are meant for short-term

cash management of corporate houses and are meant for an investment horizon of

1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the

safest amongst all categories of mutual funds.

3. Balanced funds: As the name suggest they, are a mix of both equity and debt funds. They

invest in both equities and fixed income securities, which are in line with pre-defined investment

objective of the scheme. These schemes aim to provide investors with the best of both the

worlds. Equity part provide growth and the debt part provides stability in returns.

Further the mutual funds can be broadly classified on the basis of investment parameter vise;each

category of funds is backed by an investment philosophy, which is pre-defined in the objectives

of the fund. The investor can align his own investment needs with the funds objective and invest

accordingly.

OTHER SCHEMES

Tax Saving Schemes: Tax-saving schemes offer tax rebates to the investors under tax laws

prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any

Equity Linked Savings Scheme (ELSS) are eligible for rebate.

Fixed Term Plan FTP: Fixed Term Plan schemes are special schemes of Mutual Funds. These

are short term close ended schemes. The AMCs issue a fixed number of units for each series only

once and then the issue is closed after the initial offering period. These units are not listed in the

stock market. FTPs are generally offered in money market funds. They can be considered as an

alternative to investing in the corporate deposits or bank deposits as they give a higher rate of

return.

SIP:SIP One of the best schemes of Mutual Funds is considered to be SIP or

Systematic Investment Plan. The basic funda of SIP is to encourage the people to invest a small

amount on a regular basis. Under SIP one can invest as little as Rs 100 per month in mutual

funds. This regular investment over a large period of time gives fantastic returns to the

individuals. The major reason for high returns of SIP investments as compared to others is the

concept of Rupee Cost Averaging. When the market is booming the value of the units

bought by the investors have increased while in the bearish market when the NAV of the funds

fall then the number of units allotted is more. The value of these higher numbers of units

increases when the Bull Run begins again. Thus the investors set to gain both when the market is

up or down. This coupled with the small amount needed to invest has led to SIP being

one of the most popular Mutual Fund schemes.

Index scheme: Index schemes attempt to replicate the performance of a particular index such as

the BSE Sensex or the NSE 50. The portfolio of these schemes will consist of only those stocks

that constitute the index. The percentage of each stock to the total holding will be identical to the

stocks index weight age. And hence, the returns from such schemes would be more or less

equivalent to those of the Index.

Sector Specific Schemes: These are the funds/schemes which invest in the securities of only

those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software,

Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are

dependent on the performance of the respective sectors/industries. While these funds may give

higher returns, they are more risky compared to diversified funds. Investors need to keep a watch

on the performance of those sectors/industries and must exit at an appropriate time.

Advantages of Mutual Fund

1. Portfolio Diversification

Mutual Funds invest in a well-diversified portfolio of securities which enables investor to hold a

diversified investment portfolio (whether the amount of investment is big or small).

2. Professional Management

Fund manager undergoes through various research works and has better investment

management skills which ensure higher returns to the investor than what he can manage on

his own.

3. Less Risk

Investors acquire a diversified portfolioof securities even with a small investment in a Mutual

Fund. The risk in a diversified portfolio islesser than investing in merely 2 or 3 securities.

4. Low Transaction Costs

Due to the economies of scale (benefits of larger volumes), mutual funds pay lesser

transaction costs. These benefits are passed on to the investors.

5. Liquidity

An investor may not be able to sell some of the shares held by him very easily and quickly,

whereas units of a mutual fund are far more liquid.

6. Choice of Schemes

Mutual funds provide investors with various schemes with different investment objectives.

Investors have the option of investing in a scheme having a correlation between its

investment objectives and their own financial goals. These schemes further have different

plans/options

7. Transparency

Funds provide investors with updated information pertaining to the markets and the

schemes. All material facts are disclosed to investors as required by the regulator.

8. Flexibility

Investors also benefit from the convenience and flexibility offered by Mutual Funds. Investors

can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option of

systematic (at regular intervals) investment and withdrawal is also offered to the investors in

most open-end schemes.

9. Safety

Mutual Fund industry is part of a well-regulated investment environment where the interests of

the investors are protected by the regulator. All funds are registered with SEBI and complete

transparency is forced.

Disadvantage of Mutual Fund

1. Costs Control Not in the Hands of an Investor

Investor has to pay investment management fees and fund distribution costs as a

percentage of the value of his investments (as long as he holds the units), irrespective of the

performance of the fund.

2. No Customized Portfolios

The portfolio of securities in which a fund invests is a decision taken by the fund manager.

Investors have no right to interfere in the decision making process of a fund manager, which

some investors find as a constraint in achieving their financial objectives.

3. Difficulty in Selecting a Suitable Fund Scheme

Many investors find it difficult to select one option from the plethora of

funds / schemes / plans available. For this, they may have to take advice from financial planners

in order to invest in the right fund to achieve their objectives.

4. Delay in Redemption

The redemption of the funds though has liquidity in 24-hours to 3 days takes formal application

as well as needs time for redemption. This becomes cumbersome for the investors.

5. Non-availability of loans

Mutual funds are not accepted as security against loan. The investor cannot deposit the mutual

funds against taking any kind of bank loans though they may be his assets.

MARKETING OF MUTUAL FUNDS

One of the primary job as a trainee in N.J. India Invest was to market the various schemes of

Mutual Funds to various clients. N.J. India Invest is a distribution house which distributes

Mutual Funds to the general public via its network of agents and partners. The trainees

are assigned to a partner and they have to pitch the schemes of Mutual funds to the clients of the

partners. Details about mutual Funds and the various schemes available have been discussed in

the previous.

MARKET STRUCURE

Before marketing of any product we must study the structure of the market. This structure

will determine where we should market the product so that it gets the best response from the

public. To study the market structure we must first divide the market into different segments then

choose our target segment. This is because no product can be pitched to every person in

the population. We have to then position the product so that the public is attracted to it.

Thus Segmentation Targeting and Positioning are extremely important before the marketing of

the product.

SEGMENTATION

The purpose of segmentation is to divide the whole market into smaller segments so as to

better understand the market and pitch your product to the right segment of the population. There

is no product which can be marketed to the entire population and if one tries to market it to

the entire population then it is a waste of the resources. To ensure the optimum utilization

of the resources we have to divide the market into smaller segments and concentrate on the

segment which will be most receptive of the product.

Mutual Funds are a financial product and so it is imperative that one of the basis of

segmentation will be income. For mutual funds first we will use the Socio Economic

Classification or SEC to segment the market. SEC is a systemthat combines social and

economic factors through intelligent use of the demographics of occupation and education.

TARGETING

After the market segments have been decided we have to look at which particular

segment of the market are we going to target. This is because no product can be

marketed to all the segments of the society. In case of Mutual Funds we have to target

the segments based on the different types of Mutual Fund schemes. Using the SEC segmentation

as a substitute for income based segmentation we can target the A, B and C segments of the

market. These are the segments which have a good source of income to be able to invest in

the mutual Funds. They are also educated and as a result can easily understand the benefits of

investing the money. Among the A, B, C segments we can offer the C segment only SIP

schemes. They don’t have that high a disposable income to be able to invest a large amount at

one time but can invest a small amount regularly. Many Mutual Fund companies have

brought out various schemes targeting this particular segment. For example Reliance

Mutual Funds has SIP schemes wherein the investors can start an SIP of only Rs. 100 a month.

The ELSS schemes can be marketed to A segment of the people because they are the

taxpayers and the schemes which help them in tax planning are going to be attractive to them. As

discussed earlier the risk appetite of the investors changes with age. So we can market

equity based funds to the people below the age of 35. These people have high risk

appetite and so a fund which gives high risk and high returns will be considered to be a

good investment option. For people between the ages of 35 to 60 we can offer a

Balanced Fund which gives the best of Equity and Income Schemes and has an acceptable level

of risk while giving a good return on the investment. In case of people over the age of 60 who

have retired and so don’t have a steady income source we can offer Income Funds and Money

Market Funds to them as they have less risk and give guaranteed returns.

Thus it is seen that targeting the different schemes of the funds to different segments based on

the income and age is very helpful as one is able to identify the financial requirements of the

investor and guide him or her in a very effective manner.

POSITIONING

Apart from segmenting a market and targeting a particular segment it is also essential to

position your product in a correct manner so that the customers receive it successfully.

Mutual Fund is basically a wealth creation product unlike insurance which is to be used for Risk

Cover. Many people have the beliefs that as they already have insurance they have invested in a

good product. The need is to tell the people that undoubtedly a great product but it can’t

be used as a substitute for wealth creation.

Apart from positioning Mutual Funds as a wealth creation product we have to position

the various schemes of the Mutual Fund based on their function. Thus the SIP should be

positioned as a low cost investment option which even a person with low income can avail of

while ELSS should be positioned as a scheme that gives the investors tax benefits. The

Income Funds and Money Market funds should be positioned as low risk investment

opportunities. Good positioning of a product makes it more attractive to the potential

consumer and he is able to make an informed choice about the product.

PROMOTION OF MF

Promotion Marketing of a product or service is incomplete without an effective

promotional strategy. Without promotion the general public will not know about the product or

service in question and thus will not buy it. Thus promotion is essential to spread the word about

the product or service.

In case of Mutual Funds the AMCs spend a lot of money in promoting the various schemes.

They take out advertisements in various media like newspapers, television internet etc. When a

new scheme is launched the different agents are invited to attend seminars where the details

about the product are presented. This is because the agents are the people who come in direct

contact with the public and promote the products. The agents are also given promotional

materials like brochures posters mailers etc to be displayed in the offices or sent out to

potential clients.

The distribution houses like N.J. India Invest also give a lot of promotional materials to the

agents who are associated with them. Apart from the materials the employees of the distribution

houses and AMCs also go with the agents on joint calls where a large number of potential

investors are addressed at the same time.

Marketing of mutual funds by NJ India Invest

Regular publications of information for partner and customer

Monthly magazine 'FUNDZ WATCH‘

Weekly reports

Daily market update

Single Service Point – Get/ Deposit Applications of All AMCs/ All schemes at NJ

NJ Customer care - Single contact point for all queries across all AMCs/ All problems.

NJ provides better service to investors

NJ provides good training to all NJ partner

NJ provides good commission or return to all partners

ECONOMIC AND INDUSTRY FACTORS AFFECTING THE MUTUAL FUNDS

Government influence

Governmental Influences Mutual fund business is a highly regulated business throughout the

world as it seeks to ensure that quality and fairly priced schemes are available.

Governmental intervention thus in mutual fund market usually is most needed to ensure

that insurers are reliable. And in the developing countries the additional goal may be

promotion of domestic mutual fund industry and ensuring the national mutual fund

industry contributes to overall economic development. In a non technical sense

mutual fund is purchased in a good faith so the duty of government intervention in

mutual fund industry is to ensure that this principle of mutual fund is never defeated.

The ideology of government plays an important role in mutual fund industry also.

Taxation policy

Taxation Policy Social equity being one of the motives behind tax collections,

government give certain exemptions from such levying. One such exemption is deduction

incurred by taxpayers towards investment in mutual fund coverage. Similarly, capital

invested in infrastructure bonds etc is offered with certain concession under tax laws. The central

idea behind such exemptions is that the capitals so allocated by individuals reduce the

ultimate burden on the public infrastructure or helps in creatingsuch infrastructural

facilities.

Foreign trade regulation

With the vast potential for mutual fund in India due its large population in the country

many foreign companies are ready to enter into the Indian market. But companies can be

permitted in India through joint ventures with an Indian partner as well as come

separately and the foreign equity shall be restricted to only 25%. Another statement also

tells that Indian subsidiaries of foreign companies shall not be allowed to participate in

banking sector unless they entered in to joint ventures with the Indian partners. But at

present the mutual fund regulator is in favor of hike in FDI cap from 25% to 49%, and is

finalizing a report that will be submitted to the government for a comprehensive

legislation for the industry. The security exchange board of India and association of

mutual fund India have been advocating a hike in FDI limit for mutual fund companies so that

the foreign partners can infuse additional funds in these companies to sustain their growth.

The government will need to amend the separate mutual fund Act for FDI capital as

well as domestic company as this is the statutory provision unlike sectors like

civil aviation and telecom, which have come through notification.

National income

The relative importance of the mutual fund Market within a country will also be

dependent upon economic development. With greater rates of economic

growth, consumption of investment should increase as a result of increased

income, and an increased stock of assets requiring mutual fund. Furthermore, the

development of mutual fund is likely to facilitate greater economic growth, implying that

economic growth may be endogenous. Consistent with these arguments, studies find that

the level of financial development and economic development are positively related to the

level of mutual fund across emerging markets.

Consumption and saving

The gross capital formation of any country is important for indication of its growth in

the future years. It is quite necessary to set up the rate of capital formation so that a

large stock of machines, tools and equipments are accumulated in a country. Experience

of development in other countries suggests that a high rate of capital formation was

achieved to trigger rapid rate of economic growth. With the hike in foreign capital

coming to India the rate of capital formation is becoming boom to insurers, which

has given them opportunities. It is heartening to them to note that latest savings rate

of 28% is highest till now and with the growth rate near to 8% is bringing a pool of buyer’s

purchasing power. This directly influences the demand for mutual fund products.

Employment

The effect of employment on mutual fund industry is as direct as that on economic development

of any country. With the rising levels of employment the effect on mutual fund

industry is positive because employment adds to the insured properties and assets from

everyprospective be it due to organized or unorganized.

Inflation

The midterm policy review the strong macroeconomic indicators and RBI has revised its

GDP growth estimates to the upper limit of the earlier projection range 8% inflation (WPI) has

been steadily moving up in recent times and RBI has highlighted that primary articles

prices have been one of the key contributors. However one needs to keep in mind that recent

increase in global oil prices.

Money supply

The central banks has indicated that credit growth and money supply number are likely

to be above its prosecution for the current fiscal year, the statement “to

consider promptly all possible measures as appropriate to the evolving global and

domestics situation “is indicative of phased increase in FII limits for gilt investment could

help in depending the securities market and is part of the road map towards fuller

convertibility.

Interest

Interest is major factor for investment when a person find less return from investment

tool than people move towards the higher returns tool of investment.

Risk factors

All investments in Mutual Fund and securities are subject to market risks and the NAV

of the fund may go up or down depending on the factors and forces affecting the

security market. There can be no assurance that the fund’s objective will be achieved.

Past performance of the sponsors/Mutual fund/schemes/AMC is not necessarily indicative of the

future results. The name of the schemes does not in any manner indicate their quality, their future

prospects or returns. The specific risk would be credit, market, illiquidity, judgmental error,

interest rate, swaps and forward rates.

Demographic environment

The demographic environment significantly affects the demand for the mutual fund

industry. Factors like the average age of the population, levels of education, household structures

income distribution, life style and the extent of industrialization as well as

urbanization terribly influences the demand of mutual fund schemes In India the average

age of the population is at an increasing trend following the improved medical technology and

better awareness of health care requirements As a result, the risk of investment death is

decreasing while connectivity is increasing. Simultaneously the demand for pension funds and

income fund is expected to grow. For example at the time of independence the average

age of dying for Indians was 45. Presently it has increased to 65 following better

healthcare, improvements in medical science and more health consciousness among the

common man. By 2010 it is expected to rise to 75. Hence risk profile is also changing.

Earlier people are thinking about safely but at present people thinking about capital growth.

Social factors

The social environment covers the customs, habits, level of education, tastes and standard

of living of people in the society. Today’s social environment is greatly influenced to a major

extent by the changes in technological aspects. With the rapid progress in technology and

economic liberalization, the physical boundaries are gradually vanishing. As a result, the

social life of the people and their views towards risk and uncertainty of life and health are

gradually changing. These factors of social life are affecting human motivations and emotions

related to the physical and mental incapacities, loss of health and death. In general there are

extremes apprehensions of one’s death, though it is certain. The perception of an

individual toward risk and capital growth depends on the social culture and religious

belief. In the urbanized area people does think about investment and capital growth. These

beliefs ultimately influence the buying behavior of a consumer.

Education

Education is major factor of demand for mutual fund product. If the education levels is higher

than the people know the benefits of mutual fund the use mutual fund as investment tool and also

take rise capital growth.

COMPETITORS OF NJ

AnandRathi-

AnandRathi is one of the major competitors of NJ India Invest. The firm, founded in

1994 by Mr. AnandRathi, today has a pan India presence as well as an international presence

through offices in Dubai and Bangkok. AR provides a breadth of financial and advisory services

including wealth management, investment banking, corporate advisory, brokerage &distribution

of equities, commodities, mutual funds and insurance, structured products - all of which are

supported by powerful research teams.

Karvy-

The karvy group was formed in 1983 at Hyderabad, India, karvy ranks among the top

Player fields in almost all the fields it operates. Karvy computer share limited is India’s largest

registrar and transfer agent with a client base of nearly 500 blue chip corporate, managing over 2

croresaccounts, Karvy stock brokers limited. Karvy also works asdistribution house of some

AMCs.

India Infoline

The India Infoline group, comprising the holding company, India Infoline Limited and its

wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging

from Equity research, Equities and derivatives trading, Commodities trading Portfolio

management services, Mutual Funds, Life Insurance, Fixed deposits, Gov. Bonds and other small

savings instruments to loan products and investment banking. The company has a network of

758 business locations (branches and sub-brokers) spread across 346 cities and towns. It has

more than 800, 00 customers.

Bajaj capital

The Bajaj Capital Group is one of India’s leading Investment Advisory and Financial

Planning companies. Bajaj Capital is also SEBI-approved Category I Merchant Bankers. Bajaj

Capital offers personalized investment Advisory and Financial Planning services to individual

investors, corporate houses, institutional investors, Non-Residents Indians (NRIs) and High Net

worth Clients, among others. Bajaj Capital offers a wide range of investment products such as

mutual funds, life and general insurance, bonds, post office schemes, etc. offered by public and

private and government organizations.

Bonanza-

Bonanza is a leading Financial Services & Brokerage House. It also distributes mutual funds of

various AMCs.

All Banks and Other Financial Institutions-

In India many banks also distributes Mutual funds of various AMCs such as

Karnataka bank distributes mutual funds of Franklin Templeton. So these banks and other

financial institutions are also major competitor of NJ India invest. Though these

organizations are engaged in distribution of mutual funds bud most of them have a different

concept from NJ India invest they are selling Mutual funds directly to the investors whereas NJ

India invest distributes Mutual funds of all the AMCs indirectly (through its channel partners)

except of four cities

SWOT ANALYSIS

STRENGTHS

The biggest strength of the organization is the;

• Money power, which makes them ignorant about gestation period.

• Brand image, business experience and innovative products.

• The agents are very selectively chosen have excellent communication skills.

• Service quality which is the crux of their mission. And new technology used by NJ is biggest

strength of the organization.

WEAKNESS

• High target for sales departments.

• Many competitors in market offer same products by the little difference in the offering.

• Sustainable to risk associated with investments in money market.

OPPORTUNITY

• Huge market is literally untapped; out of estimated 320 million only 20% of population has

investment in mutual fund industry.

• Equity and ELSS schemes, contribute an estimated market potential of approximately $15

billion.

THREATS

• Entry of many other private player companies with equally strong experience and financial

strength of foreign partners making the competition difficult and saturating the urban market.

• Current govt. policies which do not encourage gross domestic saving. If the tax liability of

service class rises the customer will have little money to invest.

HRM FUNCTION OF NJ INDIA INVEST

ORGANISATION STRUCTURE AND DIVISION

Organization structure

The organisation structure of NJ India Invest Company is centralization. So here all the decision

is taken by top level management and performed by bottom level of the organization. But at the

branch level and region level manager have some rights to take decision.

MDMr. Neeraj ChoksiMr. Jignesh Desai

OperationMr. Vinayak

Rajput

Human Resource

Mr. Dhaval Desai

A.V.P. (Marketing)Mr.Kulbhushan

Nandwani

A.V.P. (Sales)Mr. Prashant

Kakkad

FinanceMr. Tejas Soni

Division

NJ IndiaInvest has two broad distinct divisions of business as follows

NJ Fundz Network has been playing a pioneering role in India in providing independent advisors

/ advisory firms with integrated, comprehensive and practical business solutions for ensuring

continuous growth & continuity of business. It provides the financial advisors and the institutions

that serve them with insights, strategies and tools to help them significantly grow their

businesses. How do we do it? Thats because we understand how financial & wealth management

businesses work and what is needed to manage, monitor and grow the practice...

With the 360° Advisory platform, NJ has managed to successfully transform the business of

many advisory / distribution houses, bringing them on equal footing or even better than the

toughest competitors in the industry in the concerned domain. With a vast experience & strong

delivery mechanism, we at NJ Fundz Network, help & ensure transformation and the

exploitation of the opportunities available.

NJ Realty Services

This is an integrated service model offering solutions for meeting the diverse real-estate needs of

corporate & retail customers in transacting properties.

Finding the right property at the right value and the best buyer for a property is the crux of any

realty solution. At NJ IndiaRealty we value this critical element of retailing and aim to provide

the customer with an integrated service model that not only focuses on him meeting his desired

needs but also on enhancing the overall experience of the transaction.

The scope of properties embraces both commercial & residential projects / properties. The

integrated value-added services ensure that the solutions are feasible, authentic, secure &

profitable.

Leveraging upon the strengths of the parent company NJ, NJ IndiaRealty aims to offer attractive

options and operational guidance to satisfactorily realize the customers realty dreams.

Today NJ Realty Services has tied up with over 40 developers with over 150 projects across

India.

Making people benefit from the growing economy is possible by attracting them to participate in

Equity for long term, to make their money work for itself and create wealth. For this to happen, a

huge force of effective Financial Advisors is needed. Visualizing this need and with a view to

bridge the gap, NJ IndiaInvest Pvt. Ltd. has set up NJ Gurukul to offer different training

programs at moderate costs.

NJ Gurukul works to conceive craft, design, develop and execute effective training modules to

energize people with right inputs through different training programmes at modest cost. Powered

by NJ's experience of over 14 years as leaders in financial advisory services, NJ Gurukul has

emerged successful in conducting sizeable number of trainings since inception in April 2007 and

enjoys lineage of efforts put in by NJ prior to April 07. NJ Gurukul seeks to create an

enlightened community of ‘quality’ financial advisors capable of changing millions of lives

across India and even beyond…

NJ Gurukul also seeks to help people become better professionals / business personalities &

achieve success in their own endeavours.

For businesses, as a people partner, NJ Gurukul seeks to groom employees & management so

that they deliver upon their expectations & responsibilities, successfully. NJ Gurukul is

authorized to give training for Certified Financial Planner (CFP) by FBSB India. Today NJ

Gurukul has offered over 1200 training programmes with over 20000 candidates.

Human Resource Planning, Recruitment and Selection

Company believes that people are its real assets and the stronger the team is the better would be

the achievements. The organization’s growth demands regular inflow of employees at different

levels and thus a continuous process of recruitment. Being a knowledge organization and having

achieved a leadership position, it is our endeavour to have right people with flair to learn and

contribute. Company besides knowledge and skill, puts lot of thrust on the attitude of the person

to be recruited, as it believes that with changing roles the knowledge base required would also be

changing often. Though, we as an organization prefer to absorb people at junior level so that our

employees, being in the organization have understood the operational methodologies,

familiarized with the organization philosophy, are aware of the practices/ requirements and get

right growth slots available for them. However in certain cases, depending upon the need, people

at higher levels are also recruited. In addition to availing options of all the formal ways of

recruitment, reposing faith on the employees and their commitment to the organization,

our HR policy gives preference to Employee referral in recruitment. Employees

referring somebody known to they and owning responsibility of the conduct of the referred

person is a preferred state.

Performance Appraisal system for different levels

As you all know that NJ is a performance driven organisation, performance are the major criteria

on which an employee is been appraised. Employees in addition to their regular functional

responsibilities must strive to achieve specific targets, and to contribute to well defined, Key

Result Areas. KRA would be determined involving the concerned employee, his functional head

and HR representative. All employees need to put in their best for achieving the same.

Performance Appraisal process is been carried out at NJ once in a year. All

employees who have completed their probation period successfully and are been made

permanent employees of organisation will be eligible for the same. At NJ around 70% weight is

been given to performance and 30% weight is given to other behavioural / skill sets related to

your work profile. Process of same will be informed to employees from time to time by HR

department. All major decision related to Promotions, Increments, Transfer, Performance

Incentives, Training, etc. will be made on the basis of Appraisal reports.

Training and Development activities including feedback process

Induction / Training & Development:

NJ is a knowledge centric organisation, and spreading knowledge to its employees / associates /

clients is in its philosophy. NJ Management takes equal care of all employees and

provides them with equal opportunities to training and development and keep them

updated from time to time. Keeping into consideration the nature of work and

skills sets required, management always tries to add value to employee by providing

them training & development as and when required.

Induction: Every employee who enters / joins the organisation is supposed to go through a

induction programme carried by HR department. Frequency of such programme is on monthly

basis. It will be seen that all employees go through the process of induction with a approach of

‘First come first serve basis', further it will be seen that all employees get a chance to induction

within 45 days from his date of joining.

Training / Development: NJ Employees will be nominated for different kind of training on

basis of following grounds:

On basis of Performance Appraisal reports

On recommendation of management due to specific need for any profile

On basis of potential Appraisals (For future development)

On recommendation of Immediate Superior / Functional head

On self recommendation of employee

Each employee will have to undergo minimum 48 hours of training in a year. Employees cannot

opt / go for any training without prior permission / approval of management.

Promotion and Retention Policy

Progression in the career is a multi dimensional motivating factor and hence

company offers equal opportunities to all the employees to grow and excel in their career. At

NJ promotion is a need based, vacancies based & function / business plan based phenomenon. So

employees need to be sharp to identify the opportunity and grab the same.

Promotion will be based on various criteria like past experience, behaviour, skill sets that an

employee poses, Performance Appraisals reports, written test, Personal Interview, required

qualification / experience for the post, tenure with NJ etc. Keeping into view all the criteria

management will consider the best suited employee for the position and will offer him / her

promotion.

DECISION MAKING AND FINANCIAL ANALYSIS

NJ believes in centralized decision making so most of the decision are taken by higher

authorities. Also in decision making process flows from higher level people to lower level

people. In branch level there is some rights or authorities to take any decision by branch

manager. NJ also believes in formal power relationship but in some cases there is also an

informal power relationship.

In financial analysis I don’t have sufficient data but I have assets under management of NJ

INDIA INVEST and AUM of industry. Here we can see that over a period of time AUM of

company and industry both increase. AUM of company is increase rapidly because service

provided by NJ is best and also many good points.

Year AUM of INDUSTRY(Rs. in crores)

AUM of NJ (Rs.in crores)

2004-05 149554 2902005-06 231862 11742006-07 326388 2135.972007-08 505152 4767.922010-11 592250 100002011-12 692788 12000

Source: AMFI.com

2004-05 2005-06 2006-07 2007-08 2010-11 2011-120

100000

200000

300000

400000

500000

600000

700000

800000

149554

231862

326388

505152

592250

692788

290 1174 2135.97 4767.92 10000 12000

Average annual investment in MF

Series 1Series 2

RESEARCH METHODOLOGY

RESEARCH DESIGN

The preparation of research design, appropriate for a particular research problem, involves the

consideration of the following:

1. Objectives of the research study.

To know the financial advisors knowledge about investment habits of their client.

2. Method of Data Collection to be adopted

Data collection

Primary data: primary data can be obtained through direct communication with respondent or

through personal interview. There are several method of collecting primary data through survey

and descriptive research. I have used questionnaire for collecting primary data.

Secondary data: secondary data means, the data has already collected and analyze by someone

else. For the first part of this report I have used secondary data like NJ funds watch and websites.

Sample size

The sample size of my project is limited to 100 people only. Out of which 50 person are

insurance advisors, 20 people are post office advisors and 30 people are privet company

advisors.

3. Source of information—Sample Design

Data source

The study is based on primary data only. For this, a questionnaire was prepared consisting of

both open and close ended question. Data is collected by personal interview.

4. Tool for Data collection- questionnaire

Sampling procedure

The sample was selected of them who are the financial advisors. It was also collected through

personal visits to persons, by formal and informal talks and through filling up the questionnaire

prepared. The data has been analyzed by using charts.

QUESTIONNAIRE ANALYSIS

AND ITS INTERPRETATION

Information regarding to financial advisors client

1) Give the approximate % of your client occupation.

a) Business b) Profession c) Salary Person d) Agriculture e) Other………………

BUSINESS PROFESION SALARY PERSON AGRICULTURE

39.05%

21.30%

34.70%

4.55%

OCCUPATION OF THE CLIENTSOCCUPATION OF THE CLIENTS

From the above chart we can say that business persons can invest more in any investment plan.

And then profession and salary person are interested in investment. Any business men are

interested in investment because they all are aware about market and they want to take some risk.

Same with profession and salary person but agriculture people don’t know about any investment

plan in the market and they all are depend on seasonal income so they don’t want to invest and

they like to invest any safety investment plan. Here business people are interested to invest by

lump sum amount of money but salary person and agriculture people mostly prefer to invest by

installment because they get their salary after specific time period.

2) How long is your average relationship with your clients?

a) Less than 1year b) 1 to 3yearc) 3 to 5 year d) above 5 year

11%

24%

19%

46%

Adviser-Client relationship

less than 1 year1 to 3 year3 to 5 yearsabove 5 years

In this research around 46 % of the financial advisors has above 5 years relationship with his

client and around 43% of the financial adviser has 1 to 5 years relationship with their clients.

And also most of the investment plans are long term like LIC, mutual funds and equity, so by

investing in this investment plan for short term no one can get their required return because of

this all are prefer to invest for long term and make long term relationship with their financial

advisor.

3) Percentage of your clients in following age group.

a) Less than 30 year…… b) 30 to 40….c) 40 to 50….. d) Above50 year

16%

32%

34%

18%

Age group of clients

less than 3030 to 4040 to 50above 50

In any investment plan age group is much affected. In above chart age group of 40 to 50 years is

much interested in investment and also this age group wants to take some risk because they have

whole life to earn money so they can take risk. But less than 30 year and above 50 year people

are not earns so much and that’s why they don’t want to take risk they invest very less amount

from their salary. And also they want safety investment plan. So also we can say that 30 to 50

years age group is interested to invest in mutual funds, liquid assets and equity but less than 30

year and above 50 year age group people are invest in insurance, post office, debt and bonds

because they want safety.

4) Average percentage of annual income your clients invest.

a) 0 to 10 b) 10 to 20 c) 20 to 30 d) 30 to 50 e) above 50

52%

34%

10%

4%

Average annual income invest

0 to 1010 to 2020 to 3030 to 50above 50

On an average 52% the investors invest in any investment plan only 0 to 10 percentage of annual

income.Because they would like to keep some cash on hand and because of inflation they spent

50 % on expenses like today education expenses of their children and marriage expenses of

children’s are so much high. So they don’t invest more then 20 to 30 %.

Question regarding to research topic

1) How do you approach your client?

a) TVs b) telephone c) newspaper

d) References e) seminar & work shop f) other…….

TVs Telephone Newspaper References Seminar & Workshop

Others0

10

20

30

40

50

60

0

48

11

36

50

Mediam of approach

Mediam of approach

All the financial advisors approach their client mostly through references and telephone because

TVs, newspaper and seminar & work shop are so much expensive and not so much effective.And

also TVs, newspaper and seminar & work shop are not that much effective it is only waste of

time and money so all financial advisors focus only in references and telephone. It required so

many efforts of financial advisors to convince them for investment and so personal contact is

necessary.

2) What are the factors do you consider for designing clients portfolio?

a) Age b) Risk c) income

d) Purpose of investment e) Product scheme &policy

f) Current liabilities g) occupation h) other

All the financial advisors mostly age of investors, risk taking ability of investors, income of investors, and

purpose or product scheme and policy are consider for designing clients portfolio. It is much depends on

client age because senior citizens don’t want to take any type of risk and all young people want to take

high risk and high return.

3) Rank the common objectives of the client for investment?

a) Tax b) Retirement c) Insuranced) High return e) Education f) liquidityg) Safety h) capital gain i) other

Rank has been given on the basis of investors’ objective that means 30 % investors’ objective is safety.

From the above it can be interpreted that the common objective of the investors for investment is safety

and then all other. The common objective of client is safety because no one wants to lose their capital

amount.Second is retirement because at the age of above 60 most of people not able to do work

effectively and so they cannot earn more so for the future safety all prefer second objective as retirement.

Most of business and salary people’s objective is to save tax.

Common Objective of Client Rank % of investors

Tax 3 15Retirement 2 17Insurance 4 12High Return 5 10Education 6 7Liquidity 8 5Safety 1 30Capital Gain 7 3Other 9 1

4) What is the average time duration of your client investment?

a) 1to 2 year b) 2 to 3 yearc) 3 to 5 year d) above 5 year

13%

11%

76%

Time duration of clients

1 to 2 year2 to 3 year3 to 5 yearabove 5 year

All the investor wants high return and that’s way they invest their money for long time so here the

average time duration of investment is above 5 year.And also most of the investment plans are long term

like LIC, mutual funds and equity, so by investing in this investment plan for short term no one can get

their required return, because of this all are prefer to invest for long term.

5) How does your client invest?

a) Lump sum b) installment

19%

81%

Type of investment

Lump sumInstallment

Mostly all the investors prefer to invest by installment. Because in this survey most of people are from

salaried or business so they can get their earning after specific period of time and so they are not able to

invest by lump sum. And also because of new schemes like systematic investment plan(SIP), unit link

investment plan (ULIP) and monthly investment scheme(MIS) all investors prefer to invest by

installment.

6) which of the options your client prefer to invest? (Rank)

a) Debt….. b) Equity…. c) Bond….d) MF…. e) Insurance…. f) Gold…. g) Real estate…. g) Post office…. h)Commodity….i) Liquid assets j) other …

Option prefer by client for invest Rank % of client

Debts 6 9Equity 8 7Bond 5 10Mutual funds 7 8Insurance 1 17Gold 3 14Real estate 4 13Post office 2 15Commodity 9 4Liquid assets 10 2Other 11 1

Rank has been given on the basis of client’s preference to invest. Here we can see that insurance and post

office first and second option prefer by client for investment because there is high safety in that. And also

Life is full of dangers, but with insurance, you can at least ensure that you and your dependents don’t

suffer. It’s easier to walk the tightrope if you know there is a safety net. Second and third option prefer

by client is gold and real estate because they’re high return in this option. Very few people want to invest

in mutual funds, equity, liquidity and commodity because of risk.

7) In which proportion the client allocate their investment plan? (%)

a) Debt….. b) Equity…. c) Bond…. d) MF…. e) Insurance…. f) Gold…. g) Real estate…. g) Post office…. h) Commodity….i) Liquidity…… j) other

5%

11%

10%

6%

17%10%

9%

20%

5%4% 3%

% of investment plan

DabtEquityBondMFInsuranceGoldReal AstatePost OfficeCommodityLiquid AssetsOther

Mostly all the investors have insurance policy and then they invest in different investment plan because

all the investors first wants their safety and then they will agree to take some risk. Because of risk

investors first invest in post office, bonds, gold and insurance. We know that equity and mutual fund

contain so much risk and that’s why investors don’t want to invest their money. In above chart we can see

that % of equity and mutual funds are very less because of risk.

8) Do your clients agree with your portfolio design?

a) Strongly agree b) agree c) neutrald) Disagree e) strongly disagree

According to financial advisors opinion all the client agree or strongly agree with his portfolio design

because of good service provided by advisors. And also all investors have trust on advisors decision.

9) Do your clients study the published literature before investing?

a) Yes b) No

85%

15%

% of clients study the published literature before investing

Yes No

50 % investors want to know about their investment plan and that’s why they study the published

literature before investing. And 50 % people have no idea about new schemes and policy because they

feel that whatever done by my advisors is right so they don’t interested in study any literature.

10) Do your clients approach you to evaluate their portfolio?

a) Yes b) No

85%

15%

% of clients approach to advisor for evaluating portfo-lio

Yes No

Active clients are eager to know about their investment plan so they approach to financial advisors for

evaluate portfolio.All the investors are interested to know current position of their investment and

evaluate their portfolio. Because they want to know there is any kind a risk or not?

11) How frequently your clients change their portfolio?

a) Less than 1 month b) 1 to 6 monthsc) 7 to 12 months d) more than 1 year

Investors are not interested in change their portfolio because of high exit load and also they have invested

in fixed plan so they don’t want low return. In insurance and post office there is no chance to change

because it is based on long term period but in mutual funds any investor can make switch their investment

plan to other new schemes. So most of investors are not interested in change their portfolio.

12) Do your clients approach you to discuss the problem regarding their portfolio?

a) Yes b) NoIf yes….what problem they face…………

85%

15%

% of clients approach to advisor for problem

Yes No

Some of the investors have problem regarding their portfolio. Most of the problems are related to the

return, due premium and interest, identity problem, related to different new policies and plans, not

manage properly their investment plan, related to medical claim, other outside information like NAV,

policy address change and related to nomination change etc. so for the solution of above problem any

investors can be approach to financial advisors.

13) Do you monitor your client’s portfolio regularly?

a) Yes b) No

85%

15%

Yes No

If yes …do you communicate with your client?

a) Yes b) No

Yes, all the advisors monitor their client’s portfolio regularly and also communicate with their client

because they want to provide their best service for earn more money. If they don’t monitor than investors

will ask lot of question regarding portfolio or any other service and also investors can be leave their

financial advisors and go to other. So all the financial advisor monitor their client’s portfolio.

14) Is there any other facility demanded by your customer from you?

a) Yes b) NoIf yes ….please specify … 1)……………………………… 2)………………………………

85%

15%

Yes No

According to advisors opinion there are many facility demanded by their client. Client wants to know

about new schemes and policy and also they ask about commission and better services. All the investors

are interested to about how to get more benefit and securities, proper service, and new investment plans.

FINDINGS, CONCLUSION AND LIMITATIONS

For the growth of the company it is necessary to convince all the financial advisors for AMFI exam and

become NJ partner. But it is not possible because all the financial advisors other than MF advisors are not

interested to give AMFI exam. There are many reasons that AMFI exam fee is so much high and very less

brokerage in MF. So most ofadvisor don’twants to become NJ sub partner.

Highest number of investors comes from salaried class and business people so all the advisors have to

focus on that class of people.And also highest number of investors comes from the age group of 25 to

40.because this age group wants to take some risk for higher return. Mostly investors prefer monitoring

their investment on monthly basis so all the advisors must monitor their client’s portfolio. Most of the

people invest up to 6% of their annual income in mutual funds.

It found that customer are prefer safe financial plan for investment. They do not want to take risk.

LIMITATIONS

Sample size is very small that is 100 so it is notadequate for analysis and 30 people are

insurance advisors.The sample size may not adequately represent the whole market.

Respondent’s reluctance to answer questions asked by unknown interviewers about

things they consider private.

Busy people may not want to take the time

May try to help by giving pleasant answers

RECOMMENDATIONS & SUGGESTIONS

There are some suggestions from my side regarding the research project which could be more effective

and useful for NJ India Invest.

Because of very law brokerage no one advisor wants to become NJ sub partners so Company must have

to increase brokerage.

NJ should give safety attributes because insurance agents are more concerned about safety of the

investment of their client.

All the existing sub partner are not aware about how to use partner desk so for this NJ must provide their

best training programme to the partner. Before convince new people or financial advisors for NJ sub

partner, first NJ must have to focus on existing partner’s satisfaction and provide them best service.

LEARNING

It was a great opportunity to work with NJ INDIA INVEST PVT. LTD.After completing this training I

know about how advisory company can work and what the growth driver of the advisory company.

Before this training actually I don’t know about what is mutual fund, types of mutual funds and how

many different AMC are there in the MF but now I know all this things. I meet personally all the financial

advisors so now I am able to how to communicate with people and how to convince them for become NJ

sub partner. After this training I know about what is the investment objective of the investors and also

which factors are considered by the people before they invest their money in any investment plan. And

also I know investment habits of the investors&investor’s preference level about mutual fund. So after

completion of my summer training withNJ INDIA INVEST COMPANY I got good learning and practical

knowledge.

REFERENCES

Funds Watch-JAN 2012

www.njfundznetwork.com

www.njfundz.com

www.mutualfundadvisorindia.com

www.fpsbindia.org

www.amfiindia.com

ANNEXURE

Questionnaire

“Financial advisors’ knowledge about the investment habits of their clients .”

Profile of the adviser

NAME:

OCCUPATION: 1) Profession 2) Business 3) Service 4) other___________

ADDRESS:

AGE (in years): 1) 20 to 25 2) 25 to 30 3)30 to 454) 45 to 50 5) above 50

QUALIFICATION:_________________________________________________

EXPERIENCE AS FINANCIAL ADVISOR (IN YEAR): _____________

APPROXIMETE NUMBER OF YOUR CLIENT: ______________

CONTACT NUMBER: ________________________

Information regarding to your client

1) Give the information about your client occupation?a) Business b) Profession c) Salary Person d)Agriculturee) Other………………

2) How long is your average relationship with your clients?a) Less than 1year b) 1 to 3yearc) 3 to 5 year d) above 5 year

3) Percentage of your clients in following age group.a) Less than 30 year…… b) 30 to 40….

c) 40 to 50….. d) Above50 year

4) Average percentage of annual income your clients invest. a) 0 to 10 b) 10 to 20 c) 20 to 30 d) 30 to 50 e) above 50

5) What is the approximate average investment of your client (in Rs.)?a) Up to 1,00,000 b) 1,00,000 to 3,00,000c) 3,00,000 to 5,00,000 d) above 5,00,000

Question regarding to research topic

1) How do you approach your client?a) TVs b) telephone c) newspaper d) references e) seminar & work shop f) other…….

2) What are the factors do you consider for designing clients portfolio?a) Age b) Risk c) income

d) Purpose of investment e) Product scheme &policyf) current liabilities g) occupation h) other

3) Rank the common objectives of the client for investment?a) Tax b) Retirement c) Insuranced) High return e) Education f) liquidityg) safety h) capital gain i) other

4) What is the average time duration of your client investment?a) 1to 2 year b) 2 to 3 year c) 3 to 5 year d) above 5 year

5) How does your client invest?a) Lump sum b) installment

6) which of the options your client prefer to invest? (Rank)a) Debt….. b) Equity…. c) Bond….d) MF…. e) Insurance…. f) Gold…. g) Real estate…. g) Post office…. h) Commodity….i) Liquid assets j) other …….

7) In which proportion the client allocate their investment plan? (%) a) Debt….. b) Equity…. c) Bond…. d) MF…. e) Insurance…. f) Gold…. g) Real estate…. g) Post office…. h) Commodity….i) Liquidity…… j) other

8) Do your clients agree with your portfolio design?a) Strongly agree b) agree c) neutrald) Disagree e) strongly disagree

9) Do your clients study the published literature before investing?a) Yes b) No

10) Do your clients approach you to evaluate their portfolio?

a) Yes b) No

11) How frequently your clients change their portfolio?a) Less than 1 month b) 1 to 6 monthsc) 7 to 12 months d) more than 1 year

12) Do your clients approach you to discuss the problem regarding their portfolio?a) Yes b) NoIf yes….what problem they face…………

13) Do you monitor your client’s portfolio regularly?a) Yes b) No

If yes …do you communicate with your client?a) Yes b) No

14) Is there any other facility demanded by your customer from you?a) Yes b) NoIf yes ….please specify … 1)……………………………… 2)…………………………………