CHAPTER 1

INTRODUCTION TO
THE STUDY

1
1.1 INTRODUCTION

The concept of personal financial planning refers to the process of managing personal
assets in order to achieve personal economic satisfaction. Personal financial planning
can encompass a wide variety of strategies, including budgeting, investing, insurance,
career planning, and perhaps the most obvious of all retirement planning. Given the
breadth of personal financial planning, a wide variety of areas must be considered,
and several complex and interrelated decisions must be made in the process of
individual financial planning. The major planning required to be done under PFP’s are
as follows:
1) Tax planning—minimizing taxes
2) Cash flow planning—savings and spending policies
3) Investments—efficient deployment of resources for the future
4) Risk management—incorporation of insurance and other practices to establish and
limit household exposures to uncertainty
5) Retirement planning—life cycle planning for the period in which work-related
income ceases
6) Estate planning—organizing finances with concem for other household members
and other people and causes, most typically, for the period beyond the demise of the
asset holder.

HISTORY
The steady rise in the standard of living in the United States over the post-World War
II period, the increased complexity of financial instruments and taxation, and the
boost in processing power occasioned by the computer, created an environment
conducive to PFP development among the middle class. PFP, whose initial efforts
were heavily product sales oriented, began to mushroom in the early 1970s. The
College for Financial Planning (College), which provided training for the CFP degree,
began in 1972; the International Association for Financial Planning (IAFP), a trade

2
organization, was founded in the late 1960s; and the National Association of Personal
Financial Advisors (NAPFA), an organization of planners compensated solely by fees
("fee-only"), began in 1983.

1.2 OBJECTIVE OF THE STUDY:

Primary objective:
To understand the basic motive for which people are going for Personal Financial
Planning. The underlying motive can be securing future, tax benefits or to have
better returns.

Secondary objectives:
• To have a better understanding of the financial services and the products.
• To understand the role of insurance in personal financial planning.

1.4 RESEARCH METHODOLOGY:

1. Primary Data Collection is done by interacting with the customers personally,

through questionnaires and also through personal interviews.

2. Secondary Data Collection is done by collecting the information’s from various

journals, books, company websites, also from the media...

The data collected is either Inferential or Descriptive. Hence based on the type of
data, analysis of the data is done by applying various statistical tools.

3
1.5 TOOLS USED FOR ANALYSIS:

The tools and techniques used for the collection of data is primary data and for
analysing the data the percentage analysis, Historical Trend Analysis and Cause
and Effect Analysis have been used.

1.6 SCOPE OF THE STUDY:

Personal financial planning (PFP) has grown rapidly over the past quarter century.
During that time, it has established itself as the financially related discipline that is
most useful to the average American. Yet the academic response to PFP have been
muted. Although the fields of economics and finance have both engaged in thought
and research that is close to parts of PFP, neither has dealt with the subject head-on.
Moreover, their approaches have been very different.

This research is basically to examine how much Indian people are aware of the
concept of PFP and how much they are ready accept it. This research will help in
explaining the hurdles in full growth of PFP and what necessary steps are required
for its growth.

4
1.7 LITERATURE REVIEW

Rachel, Vibhakar and Terry: (2007)

This paper highlights the opportunities lay ahead in personal financial planning as a
career option. However, the main issue in this paper the quality of services provided by
the financial service providers and the dilemma of judging their performance. This paper
addresses this dilemma by using personal financial planners as the model to develop
strategic marketing guidelines for credence service providers.

Douglas,Joel Gold and Gramlich (2010)

This paper is a survey report upon the potential liability resulting from using the
term “comprehensive financial planning by financial service providers. It tells the
responsibilities involved if any financial service provider uses this term. In this
survey, the respondents were the members of the Financial Planning Association
(FPA) and in this survey, less than a majority of respondents indicates that the
services they provide always constitute comprehensive financial planning.
However, the CFP Board deems acceptable the provision of less-than-
comprehensive planning services as long as the scope of such services are clearly
delineated.

Deena Katz ( 2010 )

5
 This paper is a review of Q&A session in Texas University by Alpa Groups. In
this session, the basic agenda was the scope ahead in financial planning and
advisory services. The important areas covered by these pioneers of financial
advisers are as follows: financial advisors need to utilize the concept of social
networking in a true manner with full utilization of present advance technology
available. According to the speaker like medical practitioner, financial field also
requires experts for each phase of financial planning. They emphasized upon the
customer satisfaction making long relationship is a success key and one need to
understand their core competencies and capabilities to survive in this market. They
advice students to understand business practices acquire good marketing skills and
are able to communicate effectively with clients and manage their expectation.

SANDRA J. HUSTON (2010)

This study touches upon one of the most interesting and talk able issue of financial
literacy, but the crux of the article is not trying to measure the financial literacy
among the investors rather it is a review of studies already done and author has
tried to compare these studies to come to a conclusion how to measure financial
literacy what standards to be use. If a uniform standard can be decided upon it can
help in improving the financial literacy.

ANTOINETTE ALEXANDER (2010)

This article what should be the blue print when one is going to start a PFP
business. It talks about what technology to be used and what expertise’s are
required for good start. According to the author, one have to have a champion of
this niche service to really enforce the action plan and the ideal client for a PFP
practice has a higher income and has or will have substantial personal assets, and
most clients tend to be 55 and older.

Lewis Altfest ( 2004)

6
In this paper author emphasizes upon the further research on the PFP and also
argues that it should be included as a well defined academic field into the
universities. Author has tried to relate Life Cycle theory, CAPM and EMH with
PFP. He has also urged that PFP needed to be broadening from the Becker's
household model..

CHAPTER 2
INDUSTRY PROFILE

7
2.1 FINANCIAL SERVICES:
Financial services refer to services provided by the finance industry. The finance
industry encompasses a broad range of organizations that deal with the
management of money. Among these organizations are banks, credit card
companies, insurance companies, consumer finance companies, stock brokerages,
investment funds and some government sponsored enterprises. As of 2004, the
financial services industry represented 20% of the market capitalization of the
S&P 500 in the United States

The financial industry, or financial services industry, includes a wide range of

companies and institutions involved with money, including businesses providing
money management, lending, investing, and insuring and securities issuance and
trading services. The following institutions are a part of the financial industry:

• Banks
• Credit card issuers
• Insurance companies
• Investment bankers
• Securities traders
• Financial planners

8
 • Security exchanges

2.2 HISTORY:

The term "financial services" became more prevalent in the United States partly
because of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different
types of companies operating in the U.S. financial services industry at that time to
merge. Companies usually have two distinct approaches to this new type of
business. One approach would be a bank, which simply buys an insurance
company, or an investment bank, keeps the original brands of the acquired firm,
and adds the acquisition to its holding company simply to diversify its earnings.
Outside the U.S. (e.g., in Japan), non-financial services companies are permitted
within the holding company. In this scenario, each company still looks
independent, and has its own customers, etc. In the other style, a bank would
simply create its own brokerage division or insurance division and attempt to sell
those products to its own existing customers, with incentives for combining all
things with one company.

The major events that have shaped the modern finance industry are:

• The Great Depression (1929): The Great Depression originated in the US

with the Wall Street crash in October 1929. The effects of the depression
spread across the world, especially in the heavy industries. Capital
requirements regulation, financial industry oversights and the insurance of
deposit accounts sprang out of this tumultuous period.
• Black Monday (1987): On October 19, the stock markets across the world
witnessed a huge crash. This was the largest one day decline in the stock
market history. The crash started in Hong Kong, spreading to Europe and the
US. Analysts blamed computer trading systems for magnifying the losses.

9
 • Asian Financial Crisis (1990s): The Asian Financial Crisis was triggered by
the collapse of Thai baht as the government of Thailand decided to float the
national currency. The nation had a huge foreign debt at that point, driving it to
the verge of bankruptcy. The crisis rippled across the whole of Southeast Asia
and has led to many emerging market countries to reduce debts and build up
foreign currency reserves.
• Stock Market Downturn (2002): Stock exchanges around the world
witnessed a significant decline in March 2002. It was attributed to the bursting
of the ‘Dot-com Bubble’, which saw major Internet companies going bankrupt.
• Sub-prime Crisis (2007): Credit markets faced major crunch due to large
scale default on loans. It led to the Financial Crisis of 2008 – 2009 and resulted
in the bankruptcy, fire-sale acquisition and government bailouts of finance
industry giants such as Lehman Brothers, Bear Stearns, AIG, Fannie Mae,
Freddie Mac, Merrill Lynch, Wachovia, Northern Rock, Lloyds TSB, HBOS,
RBS and the entire banking system of Iceland. The world economy can expect
reduced growth rates and tighter regulations as a result of this crisis.

2.3 CURRENT SCENARIO OF THE FINANCIAL SECTOR:

With market sentiment turning positive due to the formation of a stable newly
elected government, the ripple effect is likely to felt across all the financial
services in India. The sectors, including banking and insurance, and mutual funds
are all beginning to reap the benefits of a good closure for 2008-09. In 2008-09,
the Indian economy is estimated to have grown by 6.7 per cent. According to the
latest Central Statistical Organization (CSO) data, financial services and real estate
sector rose by 9.5 per cent in the first quarter of 2009-10.

The government has taken a number of steps in recent months to revive the
economy, including slashing interest rates, lowering factory levies and more than
doubling the limit on foreign investment in corporate bonds. The financial services

10
space is a rapidly growing one in India. The country received US$ 45 billion in
foreign currency remittances from non-resident Indians in 2008, the highest in the
world.

April-May 2009 saw increased inflow in to equity with investors steadily turning
positive on equity according to mutual fund analysts. As per the Securities and
Exchange Board of India (SEBI), on May 15, net investment of mutual funds in
equity was around US$ 83.3 million lowering to US$ 20.5 million on May 21. As
against this, net investment of mutual funds in debt has more than tripled from
US$ 42.9 million on May 15 to US$ 134.2 million on May 31, 2009.

There is optimism in the economy as funds are investing in corporate bonds,

making liquidity available to enterprises. The total amount traded in corporate
bonds tripled from US$ 17.8 million to US$ 55.7 million during May 15 to May
21, 2009.

The largest fund house, Reliance Mutual Fund, registered 16 per cent growth in its
average assets under management (AUM) to US$ 21.6 billion in May 2009
compared to April’s figure of US$ 18.6 billion.

The second-largest fund house, HDFC Mutual Fund, grew 18 per cent to US$ 16
billion, compared with the previous month’s figure of US$ 13.4 billion.

The Spice Group is now looking for a US$ 1-billion valuation in financial services
business in the next three to five years. It has put US$ 105.2 million as seed
money for the financial services business and is roping in a Singapore-based firm
as a partner for the asset reconstruction business.

India has increased its exposure to American debt securities by over three-fold to
US$ 38.2 billion till March 2009 as against US$ 11.8 billion in March 2008,
according to the data from the US Treasury Department.

11
2.4 MAJOR GLOBAL PLAYERS:

According to the Global 2000 (annual report by Forbes), seven of the world’s top
10 companies belonged to the financial industry. These included Citigroup, Bank
of America, HSBC Holdings and JPMorgan Chase. Their combined revenues in
2007 were worth $645 billion, down from the 2006 high of $785 billion.

According to the Fortune 500 rankings, in 2006 financial services generated $257
billion in profits, a third of total Fortune 500 profits. In 2008, however, they lost a
staggering $213 billion, a total swing of $470 billion. Big players on the list, such
as Citigroup and Bank of America, may only be alive today thanks to government
money.

The finance industry is an industry in itself as well as an ancillary that supports

other industries. Trade and commerce across the world would come to a standstill
if there was no means to fund, pay and protect the transactions, hence the need for
governments to support the financial services industry when companies that are
‘too big to fail’ are close to collapse.

2.5 MAJOR PLAYERS IN INDIAN SCENARIO:

The top finance companies are playing a key role in the huge growth of the
financial sphere in India. The sector of finance is passing through a rapid phase of
alteration. The sustenance of the growth of economy is the primary factor for the

12
development of the India's financial sector. The best Financial companies in India
are the following:

Bajaj Capital Limited:

This is among the major Financial companies of India. The company offers best
investment advisory and financial planning. It provides institutional investors,
NRIs, corporate houses, individual investors, and high network clients with
investment advisory and financial planning services. It is also the largest provider
of finance products offered by public and private organizations, several
government bodies, investment products like bonds, mutual funds, general
insurance etc.

DSP Meriyll Lynch Limited :

It is the key player of equity and debt securities in India. It renders financial
advises to many corporations and institutions. It also offers a wide array of wealth
management and investor services along with customized advices related to
financial matters. This company is the pioneer to form research facility to research
in financial products and services, improvements and innovations. The company
also has its hand in the Government securities and holds an eminent position in the
market of equity and debt in India.

Birla Global Finance Limited :

This Indian Finance Company is a subsidiary of Aditya Birla Nuvo Ltd. Their
motto is to be the first choice of the customers as a major provider of financial

13
services through technology and value creation. The primary activities of the
company are Corporate Finance and Capital Market. Aditya Birla Nuvo has also
formed alliane with Sun Life Financial of Canada which has given rise to the
following financial services companies like Birla Sun Life Insurance Co Ltd.,
Birla Sun Life Distribution Co. and many others.

ICICI Group :

This company offers a wide spectrum of financial products and services in India.
The company provides solutions for all needs like InstaBanking,Online
Trading,Insta Insure,ICICI Bank imobile etc. The company keeps up the financial
profile healthy and diversify earnings across geographies and businesses. The
company's philosophy is to deliver high class financial services for all the cross
sections of the society. Their products are Mutual Fund,Private Equity
Practice,Securities,Life Insurance etc.

LIC Finance Limited :

It is the leading player in the finance sector of India being the biggest Housing
Finance Company of India. The function of the company is to provide finance to
individuals for repair or construction or renovation of the old or new apartment or
house. It also offers finance on the existing property for personal or business
matters. The company has 14 back offices,6 regional offices and 126 units of
marketing in India.

L & T Finance Limited:

The Larsen and Turbo group established this company in the year 1994 and now it
is a significant name in the financial sector. The company offers schemes like
funds for automobiles, funds for Agricultural Instruments,secured loans,funds for

14
automobiles and many others. It offers loans for a long tenure and the loans are
given in exchange of valuable items.

Karvy Group:

One of the top players in the financial sector is this group. The company has about
575 offices in 375 destinations in India. It offers services like the Mutual Funds
Services,Depository Services,Debt Market Services,Investment Banking and many
others.

2.6 INDIAN INSURANCE INDUSTRY:

2.6.1 HISTORY:

The insurance sector in India has completed all the facets of competition –from
being an open competitive market to being nationalized and then getting back to
the form of a liberalized market once again. The history of the insurance sector in
India reveals that it has witnessed complete dynamism for the past two centuries
approximately.
With the establishment of the Oriental Life Insurance Company in Kolkata, the
business of Indian life insurance started in the year 1818.

Important milestones in the Indian life insurance business

• 1912: The Indian Life Assurance Companies Act came into force for
regulating the life insurance business.

• 1928: The Indian Insurance Companies Act was enacted for enabling the
government to collect statistical information on both life and non-life insurance
businesses.

• 1938: The earlier legislation consolidated the Insurance Act with the aim
of safeguarding the interests of the insuring public.

15
• 1956: 245 Indian and foreign insurers and provident societies were taken
over by the central government and they got nationalized. An Act of
Parliament, viz. LIC Act, 1956, formed LIC. It started with a capital of Rs. 5
crore and that too from the Government of India.

The history of general insurance business in India can be traced back to Triton
Insurance Company Ltd. (the first general insurance company) which was formed
in the year 1850 in kolkata by the British.
Important milestones in the Indian general insurance business

• 1907: The Indian Mercantile Insurance Ltd. was set up which was the
first company of its type to transact all general insurance business.
• 1957: General Insurance Council, an arm of the Insurance Association
of India, framed a code of conduct for guaranteeing fair conduct and sound
business patterns.
• 1968: The Insurance Act improved for regulating investments and set
minimal solvency levels and the Tariff Advisory Committee was set up.
• 1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India. It was with effect from 1st
January 1973.

107 insurers integrated and grouped into four company’s viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was
incorporated as a company.

SIZE

• Insurance is a US$41-billion industry in India, and grew by 36% in 2006-

07 over the previous year

16
 • Life Insurance - US$35 billion industry with US$24 billion accounting for
First Year Premium (inclusive of Single Premium)
• Non-Life Insurance - US$5.6-billion industry; motor and health segments
account for 56% of total business

OUTLOOK:

• The Indian Insurance market is expected to be around US$52 billion

by 2010
• Expected CAGR of over 30% p.a.

POTENTIAL

• Largely untapped market with 17% of the world’s population

• Nearly 80% of the Indian population is without Life, Health and Non-life
insurance
• Life insurance penetration is low at 4.1% in 2006-07
• Non-life penetration is even lower at 0.6% in 2006-07
• The per capita spend on Life and Non-Life Insurance is US$33.2 and
US$5.2 (2006-07), respectively compared to a world average of US$330
and US$224
• Strong economic growth with increase in affluence and rising risk
awareness leading to rapid growth in the insurance sector
• Innovative products such as Unit Linked Insurance Policies are likely to
drive future industry growth
• Investment opportunities exist in both life and non-life segments
• Total estimated investment opportunity of US$14-15 billion

17
18
 2.6.2 SOME OF THE LIFE INSURANCE COMPANIES IN INDIA
Table 1A-1

Sl. No. Insurers Foreign Partners Regn. Date of Year of

No. Registration Operation

1. HDFC Standard Life Standard Life 101 23.10.2000 2000-01

Insurance Co. Ltd. Assurance, UK

2. Max New York Life New York Life, 104 15.11.2000 2000-01
Insurance Co. Ltd. USA

3. ICICI-Prudential Life Prudential , UK 105 24.11.2000 2000-01

Insurance Co. Ltd.

4. Om Kotak Life Old Mutual, South 107 10.01.2001 2001-02

Insurance Co. Ltd. Africa

5. Birla Sun Life Sun Life, Canada 109 31.01.2001 2000-01

Insurance Co. Ltd.

6. Tata-AIG Life American 110 12.02.2001 2000-01

Insurance Co. Ltd. International
Assurance Co.,
USA

7. SBI Life Insurance BNP Paribas 111 29.03.2001 2001-02

Co. Ltd. Assurance SA,
France

8. ING Vysya Life ING Insurance 114 02.08.2001 2001-02

Insurance Co. Ltd. International B.V.,
Netherlands

9. Allianz Bajaj Life Allianz, Germany 116 03.08.2001 2001-02

Insurance Co. Ltd.

10. Metlife India Metlife International 117 06.08.2001 2001-02

Insurance Co. Ltd. Holdings Ltd., USA

19
 SOLVENCY RATIO OF INSURANCE INDUSTRY

3
2.5
2
Ratio 1.5
1
0.5
0
2006 2007 2008 2009
Years

2.7 Product offered by the industry :

Types of Insurance Fig F1-2

Life Insurance Non-Life Insurance(general

insurance)

Property (eg.Builders risk insurance)

Aviation(eg.Private aircraft insurance)

Marine (eg. Marine hull insurance)

Miscellaneous (eg.Purchase insurance)

20
 Life Insurance: The basic customer needs met by Life insurance policies are
protection and savings. Policies that provide protection benefits are designed to
protect the policyholder (or his dependents) from the financial consequence of
unwelcome events such as death or long-term sickness/disability. Policies that are
designed as savings contracts allow the policyholder to build up funds to meet
specific investment objectives such as income in retirement or repayment of a
loan. In practice, many policies provide a mixture of savings and protection
benefits.

Taking Indian context, the life insurance industry is around $200billion as of

present day. The following diagram and table shows the increase in premium
collection by insurance companies on yearly basis.

Years 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Prm. 500944 557475 662879 828548 1058717 1560653 2013426 22168311

4 4 3 0 4 1 2

Fig F1-3

Premium collection in life insurance

25000000

20000000

15000000
Rs in lakhs
10000000

5000000

0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
ye ars

21
THE COMMON TYPE OF LIFE INSURANCE POLICIES ARE:

• Endowment Assurance
• Money back plan
• Whole life Assurance
• Unit Linked Plan
• Term Assurance
• Immediate Annuity
• Deferred Annuity
• Riders

2.8 FUTURE SCENARIO OF THE INDUSTRY:

Future Plans

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has

projected about 500% hike in the size of domestic insurance business which will
grow to US$ 60 billion by 2010 from the current size of around US$ 10 billion as
the growing competitive age is developing a larger appetite among people for
wider insurance coverage.

The projections of the Chamber are based on feedback that it received from its
various constituents, engaged in the insurance business, highlighting that India’s
life insurance premium as a percentage of GDP is currently estimated at 1.8%
against 5.2% in US, 6.5% in UK and about 8% in South Korea.
Releasing the analysis, ASSOCHAM President, Venugopal N. Dhoot said that
rural and semi-urban India will contribute US $35 billion to the Indian insurance
industry by 2010, including US $20 billion by way of life insurance and the rest
US $15 billion through non-life insurance schemes.
A large part of rural India is still untapped due to poor distribution, large distances

22
and high costs relative to returns. Urban sector insurance is estimated to reach US
$25 billion by 2010, life insurance US $15 billion and non-life insurance US $10
billion”, added Mr. Dhoot.

Size of Insurance Sector (In US $ billion)

Projections*
Category Rural & Semi-Urban** Urban Total
Life Insurance 20 15` 35
Non-Life Insurance 15 10 25
Total 35 25 60

* Projected figures by 2010

** A town/village where population is less than 25000

ASSOCHAM findings further reveals that in the coming years the corporate
segment, as a whole will not be a big growth area for insurance companies. This is
because penetration is already good and companies receive good services. In both
volumes and profitability therefore, the scope for expansion is modest.

PROJECTION OF LIFE INSURANCE AND NON LIFE INSURANCE

PREMIUM 2009-14

23
 YEAR LIFE INSURANCE NON-LIFE INSURANCE
INR m 2004 prices INR m 2004 prices
2009 1667814 1312134 429750 338101
2010 1983051 1485832 496 953 372 350
2011 2 366 576 1 688 756 572 727 408 690
2012 2 804 561 1 905 996 651 736 442 924
2013 3 326 543 2 153 072 734 778 475 578
2014 3 947 899 2 433 546 828 433 510 659

2.9 DEVELOPMENTS IN THE GLOBAL INSURANCE MARKET:

The global insurance industry is one of the largest sectors of finance. It ranges
from consumer to corporate and industrial insurance, and even reinsurance, or
insurance of insurance. The major insurance markets of the world are obviously
the US, Europe, Japan, and South Korea. Emerging markets are found throughout
Asia, specifically in India and China, and are also in Latin America.

With the internet and other forms of high-speed communication, companies and
individuals are now able to purchase insurance and related financial products from
almost anywhere in the world. Increasing affluence, especially in developing
countries, and a rising understanding of the need to protect wealth and human
capital has led to significant growth in the insurance industry.

Given the evolving and growing socio-economic conditions worldwide, insurance

companies are increasingly reaching out across borders and are offering more
competitive and customized products than ever before. Over the past ten years,
global insurance premiums have risen by more than 50%, with annual growth rates
ranging between 2 and 10%.In 2004, global insurance premiums amounted to $3.3
trillion. The majority of insurance comes from developed nations such as most of
Europe, the US, and Japan. In 2004, premiums in North American amounted to
$1,217 billion, while the European Union generated $1,198 billion, and Japan
produced $492 billion. The UK amounted to $295 billion.

The four biggest generators of insurance premiums comprised almost two-thirds

of premiums for 2004, the US and Japan amount to half, while they only make up

24
7% of the world’s population. In contrast, the emerging markets that make up 85%
of the world’s population produced only 10% of the premiums.

Some of the leading global insurance companies are:

• Zurich Financial Services,

• AXA

• Aviva

• ING Group
• American International Group (AIG)
• Nippon Life Insuranc
• Swiss Re
• Allianz Re
• Axis Capital Holdings
• MetLife

• China Life Insurance

2.10 PEST ANALYSIS

25
A PEST analysis is concerned as to how the external environmental influences
the business.
The acronym stands for the
Political
Economic
Social
Technological
Such issues that could affect the strategic development of a business. Identifying
PEST influences is a useful way of summarizing the external environment in
which a business operates.

Political Forces:

• Political Stability.

26
 • Price and Tax Regulations.

• Legal Regulations.

• Wage Regulations etc.

Economic Forces:

• Economic growth.

• Inflation Rate.

• Interest Rates.

• Type of Economic situation in the country etc.

Social Forces:

• Society and Culture.

• Education and awareness among the general mass

• Attitude of the customers towards the changing generation

Technological Forces:

• Recent Technological Development.

• Technological Impact on the Product.

• Costs etc.

• New technological innovations

27
 CHAPTER 3

COMPANY PROFILE

28
3.1 COMPANY PROFILE:

Allegro Advisors is a leading Indian full service investment bank that builds value
across a spectrum of clients, including the government, corporations, financial
institutions, high net-worth individuals and professionals.

MISSION

To help accumulate, grow and manage the wealth of high net worth individuals,
professionals, family groups and businesses.

Allegro’s Value advantage:

Independent

Allegro is an independent, unbiased advisor to its clients. Our advice is free from
the compulsions associated with representing manufacturers of financial products.
It is unaffected by the limitations of operating in a compartmentalized business
group. We, therefore, have the credibility and operational edge to be independent
while consistently placing our client's interest first.

Informed

The diverse experience and skills of our team together with top sources of market
and industry information, enables us to provide the best advice to our clients -
corporate, institutions or individuals. Our methodology, people development,
analysis and research processes are of the highest standard. We make it our
business to be fully informed about our client needs, while closely following
products and industry trends.

29
Innovative

Solutions at Allegro are the result of innovative tools and investment ideas that
seamlessly integrate business lines based on trends, expertise and a time-tested
approach to being custodians of our clients' financial interests. Alternative
investment strategies, the focus on restructuring debt or our pioneering initiative to
advise corporations on public offerings, bear testimony to Allegro's ability to offer
solutions that are out-of-the-box.

We believe there are no packaged, off-the-shelf solutions. Every recommendation

made by our team fits into a customized plan that is outlined at the
commencement of a relationship. Each proposal is backed by proprietary, focused
research, fund management expertise and the lowest client-to-advisor ratio in the
industry.

3.2 PRODUCT AND SERVICES OF THE COMPANY:

Allegro's Services are broadly classified into:

• Capital Markets advisory services.

• Corporate Finance Services including equity and debt placement, debt
restructuring and Mergers &Acquisitions
• Investment Advisory Services covering retail and corporate investment and
wealth management services, Portfolio Management Services, Secondary
market execution services and Insurance Advisory Services.
• Asset Management that involves building a INR 1 billion restructuring
fund.

30
The above-mentioned services provided by the four verticals of the company:

• Investment banking.
• Private banking
• Investment management
• Retail

INVESTMENT BANKING:

Companies investment banking expertise ranges across domestic and cross border
mergers & acquisitions, capital raising, debt restructuring and Initial Public
Offerings. Allegro's global, cross-industry expertise and strong associations with
financial institutions, venture capitalists and industry leaders, positions us to offer
comprehensive advisory expertise to Indian corporations seeking to grow in
domestic and international markets.

Allegro's investment banking team brings close to a million hours of experience in

advising on transactions both in Indian and international markets. Our strategic
partnership with Close Brothers Group, amongst the largest international
investment banking advisory groups in the mid market segment, enables the
company to offer Indian corporate houses a global full service advisory platform.

Over the past five years, Allegro has advised on transaction in excess of Rs 75
billion across service lines and geographies, with marquee clients that include
Biocon, Indian Seamless Group, AIG, Royal Orchid Group, You Telecom, etc.

Under investment banking the main functions of the company are:

• Fund raising and capital markets.

• Mergers and acquisitions.

31
 • Distressed assets.

FUND RAISING:

Company bring to bear their extensive relationship with financial institutions to

address the unique needs of the clients.

Equity placements:

• Strategic assessment, business plan finalization, assistance in presenting

investment considerations.
• Transaction structuring
• Identifying and approaching funds
• Pricing strategy and negotiations

Debt placement:

• Assessing debt capacity

• Optimizing capital structure
• Reviewing potential credit ratings attainable
• Lender negotiations
• Pricing strategy and negotiations

Capital markets:

Company leverage their deep understanding of capital markets and relationship

with financial institution to provide quality advice to our clients on transaction
such as IPO advisory, private placements etc.

32
 IPO Advisory:

• Business plan finalization.

• Review and finalise corporate and issue structure.
• Appoint intermediaries, IPO documents.
• Assists in marketing and road show.
• IPO launch and post IPO support including research and investment
relations.

Private placement:

• Strategic assessment.
• Identifying and approaching investors.
• Pricing strategy and negotiations.

Mergers and acquisition:

Company’s merger team have a deep understanding and experience of investment

banking which helps them to identify targets, structure and execute transaction
across a spectrum of industries.

Acquisition /Joint venture assistance:

• Target identification and evaluation.

• Transaction structuring
• Due Diligence assistance.
• Pricing strategy and negotiations.

Divestitures:

• Strategic assessment and business plan finalization

• Buyer identification

33
 • Pricing strategy
• Bid evaluation and negotiation

Sell side advisory:

Buy-outs offer complex situation where typically expectation of the seller, equity
and debt financiers, management/buyers need to be married. Having worked on
two of the largest buy-outs in the country, which involved some of the most
prominent financiers, now company is in apposition to offer considerable expertise
in strategic and tactical advice on buy-outs.

• Identify select list of prospective financial partners based on experience in

similar transactions and financial.
• Identify and evaluate options for structuring the buy-out with prospective
financial partners.
• Assist with bid strategy
• Negotiate terms and conditions with the financiers.

Allegro is widely acknowledged as the leader in distressed assets advisory and has
advised on some of the most high profiles deals in India.

Debt take-out

• Assisting in business plan.

• Assessing capital structure
• Identifying and negotiating with mezzanine and distressed debt financiers
• Structuring the transaction to meet sponsor and company requirements

Debt restructuring:

• Assisting in business plan finalization.

• Assessing capital structure.

34
 • Negotiating with existing lenders on restructuring package.
• Project management.

PRIVATE BANKING:

With a mission to help accumulate, grow and manage the wealth of high net worth
individuals, professionals, family groups and businesses, Allegro's Private
Banking Practice offers personalized financial planning and legal advisory
services. Our advice covers investments across asset classes and ranges from
capital markets, debt instruments, real estate, private equity opportunities, to select
corporate finance requirements. For clients with multiple asset managers and a
diverse portfolio, we offer a holistic 'Fund of Funds' approach that is in complete
synergy with the unbiased nature of our advice. We also collaborate with
specialists for estate advisory, tax and legal services, so becoming a "family
office" to our clients. Pioneers of independent lifecycle management services in
India, Allegro runs the largest fee paying investment advisory service in the
country. Our advice covers the entire spectrum of an individual's financial need,
from investment planning and execution to tax planning and compliance. Goals,
set across a perpetuity, are assiduously worked upon by advisors keeping in mind
the gradual and limited growth in corpus and the risk profile of this segment.

INVESTMENT MANAGEMENT:

Allegro’s investment management group is responsible for managing assets on a

discretionary basis across retail, high net worth and corporate clients. Allegro
Capital Pvt Ltd is registered as a Portfolio Manager with the securities and
Exchange Board of India (Registration No:INP000002437). On this platform
Allegro has created distinct investment strategies to suit a wide variety of client

35
goals and risk preference that are able to constitute core elements of most assets
allocation strategies. These strategies encompass most of the liquid asset classes
including equities, mutual funds fixed income and precious metals, among others.
The investment management group aims to bring institutional quality investing to
all our clients.

RETAIL:

very Allegro branch offers over 18 different categories of financial products from
over a 100 companies representing the entire spectrum of what's available
anywhere in India. Stock Broking, Life & General Insurance, Mutual Funds, Gold
traded funds, IPO's, Loans & Advances, Money transfer, Private Banking,
Portfolio Management Services, Real Estate & Property Management Services
and International Investments Products are on offer to every customer who walks
into a branch , but without bias of a company and in a seamless borderless manner.
The customer gets choice, comparisons and advice on what is best suited to him or
her.

This approach keeps the clients financial interest at the centre of its business
model and is at a complete variance of the existing approach of most financial
institutions such as banks and insurance companies to "sell" their products,
whatever the need of the client. For instance, if the customer walks into an Allegro
branch with INR 10000, he or she can invest the money in a mutual fund, in
insurance, in shares, in gold, or RBI bonds with no pressure to choose the kind of
products or the company it comes from. Advisors, specialized in the range of asset
classes would help customers look at options and choose a product that is best
suited to their requirements.

Allegro represents leading financial brands and services of India and in the
locations we are present in. Mutual funds from all Asset Management companies

36
including Reliance, HDFC, Fidelity, ICICI etc, Gold ETF's, PMS products,
Broking on the NSE, Home loans from HDFC Ltd and International investment
products from Close Brothers are just some of the investment products on offer.

The financial supermarket branches are now spread across Kerala, Karnataka,
Tamil Nadu and Andra Pradesh. The All India phase 1 launch will be complete by
March 2008.

3.3 BUSINESS STRATEGY:

A Fundamental Basis

Allegros portfolios have a strong grounding in research, both at a macro level, as

well as down to specific securities. The investment process is in general a
combination of top down and bottom up processes. The former essentially focuses
on identifying, and allocating capital to the economic themes and trends that are
likely to be profitable over the next six to twelve months while the objective of the
latter is security and trade selection that will implement, most effectively, those
themes and trends to which capital has been allocated. Overlaid over this
philosophy is a robust portfolio and risk management process that controls market
and credit risk and ensures that client portfolios are not exposed to risks beyond
what is reasonably allowable for the strategy.We focus on real numbers and
analysis rather than merely judgement and employ analysts dedicated to
quantitative research, portfolio construction and management

Risk Management

We believe that operational and settlement risks are equally critical to the process
of generating returns and have put in place strong operations and technology
processes to ensure that such risks are monitored and accounted for. We partner
with financially strong and well capitalized institutions in the financial services

37
and technology space for our third party requirements in order to be able to
provide quality services to our clients

Process and people

We do not believe in clustering business around star managers - instead we put our
faith in time tested investment and portfolio management processes that stay true
to investment goals. While we believe that our people are biggest asset, our faith is
in the processes that a team has put together, not a single individual.

Transparent and Client Aligned

Last, but not least, we believe in a transparent approach to our business and
implement this via disclosures, reporting and where necessary, explanation of our
views and strategy and their risks and limitations.

Our belief is that we should succeed only when our clients do, so our charging
structure of a management fee to cover essential management expenses along with
a performance fee that rewards us when our clients perform over a minimum
return keeps our goals aligned with those of our clients.

38
 CHAPTER 4
ANALYSIS AND
INTERPRETATION

39
4 ANALYSIS AND INTERPRETATION:
A Questionnaire was prepared in order to collect the primary data from the
respondents that are the perspective customers.
Following were the data obtained after collecting through primary data collection
in order to analyze the research problem “PERCEPTION OF CUSTOMERS
REGARDING PERSONAL FINANCIAL PLANNING”. The method used to
analyze the various aspects is the PERCENTAGE ANALYSIS method.

4.1 DEMOGRAPHIC RESULTS:

A ) GENDER

GENDER

female
26%

sex
male 74
female 26
male total 100
female

male
74%

40
Interpretation :
From the survey conducted it is infer that out of the sample size of hundred ,
• 74% of the respondents were male and

• 26% of them were female.

ANALYSIS:
• This reveals the fact that the male population is more aggressive in
knowing the market situation and its growth trends.

• Where as the female population who are proffesionals , were only ready to
grasp the knowledge in the equity market.

• The reason for this huge variation could lack of curiosty to seek more outer
knowlegde among women as compared to men.

• Another raeson could be lack of time.Usually women are more dedicated

towards their family life hence they do not have sufficient time to know
about the market.

B) QUALIFIACATION

41
 QUALIFICATION

Graduate
Post Graduate
Qualification
Graduation 56
Post Post
Graduate
44% Graduate
Graduation 44
56% Total 100

Interpretation:
The above diagram gives us an inference of the qualification level of the
respondents.From the sample size of hundred:
• 56% of respondents are graduates

• 44% of them are post graduates

The graduates were mainly from the commerce background,with few from the
science and few from the arts background.Where as the postgraduates were the
people who hav done their masters.majority were MBA’s ,with some
MBBS,Engineering and some of them were also CA’s.

ANALYSIS:
The basic reason why majority of the respondents were graduates ,because of the
fact that
• In a country like India the level of education among people has still not
reached the upper level.

• People believe that being a graduate means securing full knowledge .

42
 • Also many are there who wants to gain knowledge about the equity
market ,but since they are not well versed with the subject they are unable
to do so.

• Only the specialized ones are aware of online trading,rest have zero
knowledge about stocks and shares.

C) OCCUPATION

Occupation
Business 15
Manager 26
Student 10
Others 49
Total 100

Interpretation:
From the above diagram it can be well interpreted that out of the hundred
respondents:
• 15% are people who have their own business

• 26% are company managers

• 10% ,that is a handful of them are college going students

43
 • 49% and more are people who are profeessionals from diffrent areas such
as some of them are doctors,engineers.CA’s ,lawyers.teachers,financial
advisors etc...

ANALYSIS:
The main reason for this kind of segregation could that different income group
people spent and invest their money differently .Each and every individual has a
different perception with regards to PFP.
• The business class has a perception of gaining more and more profits and
earn revenues from the equity market.They keep on circulating their own
money.

• A larger section of the graph is occupied by the managerial class

people.This may be due to the fact that they are having good knowledge of
the equity and hence believe in changing themselves according to the
changing trends.

• The result also shows that a handful of the respondents are students.This
sows their interest and curiosity towards this particular area.

• The largest pillar comprises of people who are professionals.It very clearly
signifies that people who are curious,have an appetite for knwoledge,and
also risk bearers.Their perception would be entirely differnt frm the other
class people

D) AGE

44
 AGE
20-30 70
32-40 21
41-50 9
Total 100

41-50
AGE
9%

32-40
21%

20-30
70%

Interpretation :
Looking at the chart above we can infer that out of the hundred samples which
were surveyed :
• 70% belonged to the age group between 20-30 years

• 21% belong to the age group of 32-40 years

• 9% belonged to the age group of 41-50 years.

45
ANALYSIS :
If we analyse the above given situation we can see that perception of customers
towards the equity market also varies according to the variation in age groups.
• People who are under the age group of 20 -30 years are those who are
always curios,and eager to know about something new.Majority people are
young managers and young business men.

• The basic reason for the variation in perception could be because according
to growth in age people become more and more family oriented.

• They want to save money for the family rather than taking risk and
investing in equity and other such kind of investments.

• Hence forth people of higher age groups show a dcreasing perception

towards equity.

E) ANNUAL INCOME

Income
0-5L 73
5-10L 24
10-15L 3
Total 100

Interpretation :

46
When we interpret the annual income of the sample size of hundred respondents
we can find out that:
• 73% of them have an annual income upto 5 lac.

• 24% of them have an annual income of 5-10 lac

• 3% of them have an annual income of 10-15lac

ANALYSIS:
After the survey what analysis can be done is that:
• People who trade and invest in finacial products are people who do not
have a high income profile.

• In order to earn more and get good returns they invets in the equity.

• Where as the higher income group people are not so much interested in
investing in equity. They rather invest in property, real estates and
purchasing of assets.

• Such porsch people have sufficient wealth which they do not feel to
invest.According to them equity and such stuff are a waste of time and
money both.

F) SOURCE OF INCOME

Source of Income
Salary 67
Business 27
Ancestral 0
Property 47
Others 6
Total 100
Interpretation:
Giving an inference of the above data from the sample size of hundred we can
say that:
• 67% of the people earn their revenue from their salary

• 27% of them get their income frm business.

• 6 % get from other relevant sources.

ANALYSIS:
If we analyse the given data we can find out that :
• Most of the people who are earning a salary are more ready to invest in the
market.They believe that even if they invest their salary is fixed.

• Whereas people whose source of income is business and other such sources
feel that they have a bulk of money which they would like to retain for their
future ‘s security.

48
 • Overall we can say that people‘s perception is highly affected by the
income source .

• If they have a secured source of income they go for investments in equity

or else they would be happy in keeping the money in their pocket.

4.2 ANSWERS TO QUESTIONNARE:

1. Q 1. Do you have personal financial planning?

30%
Availing PFP

YES NO
Yes 70%

70%
No 30%

Interpretation:
Looking at the diagram above we can say that ,out of the hundred respondents:
• 70% of respondents are availing the facility of personal financial planning.

• 30% of repondents are srill not availing this facility.

49
ANALYSIS:
Analysing the market survey which was conducted on a sample size of hundred
the response was :
• The above 30% of respondents not having any type of PFP are basically
those people who have started their carrear recently .

• 70% respondents having PFP are combination of people.

• Some are working from quite a long time and some are with 3 to 4 years of
experiances.

• People not having PFP are also showed their intrest for it and respoded
positively when asked about “will they go for it in future?”

Q 2. Who take cares of your personal financial planning?

NO. OF
RESPONSES
Self 45
spouse 15
family 20
I have a dedicated person
20

50
 45
40
35
30
25
20
15
10
5
0
Self Spouse Family I have dedicated
person
Interpretation:
From the survey conducted we can infer that out of the sample size of hundred ,
• 45% of respondents were managing their financial planning themselves.

• 15% of respondents are dependent upon their spouse’s.

• 20% of respondents have given this responsibility to their family member.

• 20% respondents have dedicated proffesional for this purpose.

ANALYSIS:
• The above scenario reveales that majority of the people are
interested in doing their personal financial planning themselves.

• Only 20 % of respondents are having proffesional for this purpose so

we can infere from this still people are not ready to take the service of
personal financial advisors for this purpose.

• But one possible reason for the above mentioned scenario can be
people has given this responsibility to their family members.

51
Q 3. Do you have full life cover?

Fully covered
80%

Yes Yes 20%

No

20% No 80%

Interpretation:
• Only 20% of people are fully covered

• 80% were not fully covered

ANALYSIS:
• Still the concept of full life cover is not that known to investors.

• The concept of full life cover is based upon the human life value model.

Human Life Value = Disposable income * No. of working years left.

• Human life value is the amount of money which replaces income to the
family in the event of premature death of the family head.

• It is based upon the income of the bread winner meant for the
family/\dependents.

52
Q4.Which type of insurance plan do you have?

INSURANCE
PLANS
ULIP 34
Term 13
Endowment 3
Mixed 20
Don't know 30

INSURANCE PLANS
40
35
30
25
20
15
10
5
0
ULIP Term Endowment Mixed Don't know
Interpretation:
• 34% respondents are having ULIPS.

• 13% are having term plans.

• Only 3% are availing endowment plans.

• 20% are having mixture of all plans.

• Whereas 30% are not aware of which type of plan they are using.

53
 ANALYSIS:
• The main noticeable point here is 30% insurance holders were not
aware of the terms like ULIP, term, endowment etc.

• Its reveals the fact that we still lacks a lot in terms of financial
literacy .

• Then if consider the respondents who know these differences majority

are having unit link plan.

• The huge amount of money following in into the market through these
ULIPs is itself proves the fact that it is a most popular insurance plan among
the customers.

• But if can infer from these responses that still awarness among the
customers needed to be improve.

Q5 In which financial product do you have maximum investment and why?

35

30 Types
25
Insurance 14
20
equity 20
15 dept 20
10 bank deposit 11
5
post office
0 deposits 30
Insurance Equity Dept Bank Deposit Post office Other
deposits
other 5
Interpretation:
Out of the hundred people who were interviewd :
• 14% people are having their maximum investment in the form of insurance
cover.

• 20% are real investors as their portfolio gives equity maximum weightage .

54
 • Bank deposits are also not that far when it comes to customer preference
and thus 11% respondent voted for it.

• But with 30% customer preference post office deposits are winner.

ANALYSIS:
• The above reveliations proves the assumtion of investors are risk
averse.

• 5% of people went for others means their majority of investment are

not in the form of insurance, equity, bankdeposits or post office, but in this
category also there was a union in the form of people having maximum
investment in the form of gold. So we can infere that gold is also a preffered
investment destination.

• Equity and dept with 20% each also reveales the changing
preferences of indian customers.

• Insurance as a investment tool lagging behind and needs more

customer attention.

Q6 Break up of your financial planning. (in %ge)

ANALYSIS:
Taking an overview of the interpretation obtained we can analyse that:
• Every one are not that specific about diversified investment.

• Only few people have some investment in all areas given as option.

• Every one in some or other are having insurance.

55
Q7. Are you happy with the services provided by your company?

Service provided

not satisfied
25%
Fully satisfied
34%

partially
satisfied
41%
Interpretation:
When such a question was asked the responses received were that:
• Only 34% of them were fully satisfied with the services provided by the
respective companies.

• Around 25% people were they who were not at all satisfied

• Rest 41% people were such who had a different opinion .They were
partially satisfied..

ANALYSIS:
It can be well analysed from the above interpretation that
• Even if people are trading in different companies they are not at all satisfied
with the services and charges which the companies charge.

56
 • Very small percent are fully satisfied.Majority of them are partially
satisfied.This is because if they are satisfied with their charges then they are
dissatisfied with the services provided and visa versa.

• The above concept depends on how a particular customer is treated by the

respective company’s.

• Also the approach and response was a major criteria for this answer where
people individualy judged

Q 8. What is the main objective of your personal financial planning?

SECURITY 10
45
40
35 PERSONAL 10
30
25
INTEREST
20 BUSINESS 15
15
10 FOR PROFIT 20
5
TAX BENEFIT 45
0
· · · · To · Tax
Security. Personal Business earn profits benefit
Interest

Interpretation:
When the customers were asked about the purpose of their PFP they gave the
followinfg answers.:
• 10% said they are doing it for future security purpose.

• People doing it for personal interest also got 10% voting.

• 15% people doing it as their core business.

• 45% are doing it for tax benefit.

57
ANALYSIS:
• As we can see 45% people voted that they are doing PFP for the sake of
tax benefit so we can infer that the government plans to increase
investments in the market by giving tax rebates has actually proved
successful.

• As only 20% people are doing it for profit we can say that still people
don’t real upon it much.

• The percentage of people doing investment just for personal interest is

also no that less so we can assume here that the number of people doing
investment to have an experience is also improving.

• As more number of people doing it for tax benefit government can

influence investment by making changes in rules and regulation and it
will definitely going to work.

Q 9 ) Have you got good returns from the stock market in your earlier days?
Ans )

RETURNS

Returns
Good Returns 20
Low Returns Good Returns Average Returns 51
29% 20%
Low Returns 29
Total 100

Average
Returns
51%

58
Interpretation:
Talking about returns people were not raedy to speak much.Still out of the sample
size of hundred.:
• 20% people got good returns from the equity

• 29% got low returns

• 51% which is the major prtion ,people received average returns.

ANALYSIS:
When this question was asked to the respondents they did not take much time and
said that :
• Investing in equity would never give 100% returns.

• It depends on the speculations made by the people which is also not 100%.

• Hence from the above facts we can analyse that trading involves high
risks.If we go with high risks we may or may not get high returns.

• Also speculation is a major factor which drives all this .

• Maximum people who are trading ,have never got full returns.Their
satisfaction level is low.

• Trading involves lots of risks and other market factors which avoids
gaining returns.

• Also the goverment funds when induced in the market ,makes the market
go up hence it becomes an improtant criteria for investment.

59
Q 10 ) . What suggestions would you like to give others regarding PFP?
Ans )

SUGGESTIONS
Suggestions
Avail
Don't Avail Service 67
Service Don’t Avail
33%
Servise 33
Total 100

Avail
Service
67%

Interpretation :
Talking about the giving opinion to others ,following was the result obtained
from the hundred respondents.
• 67% people said customers should go for PFP .

• 33% of the respondents suggested not to avail the service.

ANALYSIS:
• To give a broader and better prospect about PFP people just said that it is
always good to learn more, and earn revenues. Nevertheless, if it is
uncertain then one should have a perfect knowledge of the subject before
going into such business.

• People said that those who are in this trading business can always go ahead
and avail the service if and only if they have the appetite to digest the risk
factor.

60
• And those really cannot digest this risk and feel that it is just a waste of
time and money both said that it is just a useless to invest in these factors
and they should not avail the service.

CHAPTER 5
FINDINGS,
RECOMMENDATIONS
AND CONCLUSIONS

61
5.1 FINDINGS :
Based on questionnaire following are the findings:
• Youngster those freshly started working are still don’t belief on the
experts advice of early start of financial planning.
• But they do showed interest for the same and said that they will go
for it in future.
• The percentage of millionaires is increasing in India according to
current data it has been increased by 50%. So in such a scenario more people
will go for financial planning.
• Based on above point we can also tell that financial planning may be
able to become a very lucrative career option in coming days.
• Findings also suggest that the concept of human life value is hardly
known to people and that’s why they don’t have full life cover.
• I also come to know that there a lot many long selling is happening
because of lack of awareness into this matter.
• I would also like to draw attention towards the lack academic
attention towards PFP. Experts has been telling that its should be provided as
a professional course in universities,

5.2 RECOMMENDATIONS:
Based upon my findings I would like to give following recommendations:
• Personal financial planning is a very important to achieve our future
financial goals and that is why every earning individual should go for it.

62
 • Even while going for investment investors should go for diversified
investments to reduce risk..
• People should consider other investment option tools with safe options such
as bank deposits, post office deposits etc as other investment option can
give much higher returns compare to above mentioned
• Before going for insurance policies investors should consider all aspects of
it such as what is their requirement and after how many years, they want
returns and is that policy is fulfilling all these requirements.
• If people are investing big amount money they should take professional
consultation to avoid extra risk exposure.
• People should go for investment not only for tax benefits but with intention
of returns.
5.3 CONCLUSION:
To conclude I would like to say that personal financial planning is a very good
practice to improve the standard of living of the people and every earning person
should go for it. Its helps in achieving financial goals and provides financial
independence. Due to lack of awareness, people are not able to get full advantage
of PFP and with that even insurance sector need to improve. so that investors can
trust insurance companies. Indian insurance industry is one of the booming
sectors. In a nutshell, I would like to conclude by saying that:
• Personal financial planning (PFP) is a fairly new and growing discipline.
• PFP deserves academic recognition as well as additional academic research
in this area is required.
• A course such as Certified Financial planner requires more attention and
credence.
• Insurance sector needs to provide after sales service to achieve customer
satisfaction.

63
• Awareness is required so that people will go for PFP not only for tax
benefits but also to secure their future.

64