Bringing industry, finance & people

together.
 “Wealth Management Business
&
Comparative analysis of structured products with
other products”.

By: Atul Abhiseck Singh.

Registration No: 08/016.

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Karvy Intro
Objective
Research Methodology and Scope
Wealth Management Outlook and Value chain.
Market Participants
Product Classes
Karvy WM: Client Profiling & Segmentation
Karvy Financial Planning & Business development model
Competitor Analysis
Structured Products, Features ,Types and Comparison with other Products
Future Outlook, Challenges and Opportunities
Experience and Recommendations
 Achievements Karvy
10 reasons why Karvy.
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 1979
Inception

Corporate Registry

1985
Services

1990
Stock Broking Services

1993
Financial Products Distribution

Corporate Financial

1995
Services

Depository Services

1997 IT Enabled Services

2000

Personal Finance
Advisory Services
2001

Debt Market Services

2003

Karvy Global
Services
2004

JV with Australian
Computershare
2005

PCG group of
Hongkong has taken
20% stake in KSBL
2008

Largest financial
product distributor.
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 To understand the wealth management business and various
financial products available in the financial sector.
 Business development for wealth management division Karvy.
 Career orientation towards financial services industry.
 To interact with Affluent, HNIs and Ultra HNIs clients of Karvy.
 Experience of marketing of financial products and personal
financial planning services.
 To understand various competitors in the wealth management
domain.
 To have practical exposure to the real market scenario.
 To understand structured products concept, features and return
with risk profile.

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 Savings &
Investments Secondary
Primary Global wealth Industry research
research models statistics program

Market Context Competitive dynamics Customer preferences Forecasts

Macro Trends Distribution Retail

Economics. savings &
Best practices Financial planning Invsts.
Retail Invsts.
Structured products Product & Services Wealthy
Wealthy
Service offerings Sophistication Individuals
Individuals &
& their
their assets.
assets
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 Originated in 1990s
 WM= IC+AP+RM
 It includes:
1. Core banking type products like current account, time deposits etc.
2. Brokerage
3. Asset management-Both financial and non financial.
4. Lending products such as credit cards and mortgages.
5. Insurance and protection products
6. Advice in all shapes and forms-asset allocation & wealth structuring.
7. Other concierge type services like art storage, real estate location,
hotel, restaurant & theatre booking.

It is nothing but services provided to wealthy individuals & their families.

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 Wealth Management Process from a Client Advice Heritage

Assets
Brokers
Private banks; Trusts managers

Client
Objective Asset Product Trading Product
advisory
setting allocation selection driven
driven

Advice oriented Product

oriented

Wealth Management Process from a Product-Driven Heritage

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 Brokerages
 AMC.
 Insurance agencies
 Financial advisors/planners
 Private banker’s
 Family offices.

 Equity- direct equity, futures & options, mutual funds etc.

 Debt- bonds, WDM/RDM, fixed deposits etc.
 Alternative Investments- gold/silver, real estate, structured products,
commodities, art & antiques etc.
 Risk Management- life insurance & non life Insurance.

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  Affluent category
 HNIs
 Ultra-HNIs

Based on Life cycle stage : Based on Source of Income:

 Young unmarried  Salaried individual ( CEOs)

 Married with children  Professionals & freelancers

(Doctors, teachers, designers,
 Married with older children architects, etc.)
We also segment on the basis of:
 Assets size
 Sources of wealth and tax situation
 Advice dependency & risk tolerance

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Our Vision:

"To cater to the unique

needs and
requirements of the
mass affluent by
providing complete
financial solutions and
thereby enabling them
to transform their
dreams into reality.”

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 A personalized service - comprehensive & continuous

 Comprises of the following services :

Contingency
Planning
Investment Expenses
Planning Planning
Personal
Financial
Retirement Liability
Planning
Planning Planning

Tax Insurance
Planning Planning

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 Financial planning answers critical
questions like:
 What do I want to achieve and how?

 Am I overspending?

 Where do I invest?

 How much will I need to invest to realize my

financial freedom?

 Am I taking too much or too little risk?

 Am I doing enough with regard to tax

planning?

 Should I continue or foreclose my loan?

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After we acquire a client we follow the 4 stages:

Seamless Execution

Plan Process

Product specific
Pre-Plan Actual recommendation
Follow-Up
Interaction Plan Making through research
support

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 Stage 1

Plan Process

Product specific
Pre-Plan Actual recommendation
Follow-Up
Interaction Plan Making through research
support

• Personalized touch for understanding you better

• Assistance in filling Input Sheet
• Define and establish your ‘financial shock absorbers’
• Helping you to identify, quantify and prioritize your financial
goals

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 Stage 2

Plan Process

Product specific
Pre-Plan Actual recommendation
Follow-Up
Interaction Plan Making through research
support

• Team of experts working towards your financial future

• Giving you valuable insights through different techniques like
ratio analysis, net-worth analysis, open risk position, etc.
• Tailor-made recommendations for you

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 Stage 3

Plan Process

Product specific
Pre-Plan Actual recommendation
Follow-Up
Interaction Plan Making through research
support

Equities
Real Estate F&O

Research support
Tax Planning Commodities

Mutual Funds Insurance

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 Stage 4

Plan Process

Product specific
Pre-Plan Actual recommendation
Follow-Up
Interaction Plan Making through research
support

• Periodic litmus test to evaluate how close you are to your

financial goals
• Assessing any change in your risk tolerance levels
• Quarterly portfolio review and feedback
• Performance statement of your investments
• Review of insurance needs at important junctures of life
• Continuous research recommendations over all personal finance
products
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 Here lies the difference

Wealth management
services KARVY FINANCIAL
Portfolio management PLANNING
services
Private banking services
Have a wholesome
meal!
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 And the wholesome meal at the best price
Fee structure#

One time membership fee* Rs.5,000

Annual maintenance charge* Rs.5,000

Value additions:
 Need based review
 Investment Calendar
 Online portfolio
 Access to exclusive research report
 2517.75 man hrs. of service
 Exclusive login id

*Taxes extra
#
Subject to changes
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 Service Offering Fees Remarks
Charged

HSBC Bank WMS/ Need based None Relationship based business. Focus on
Financial planning/ PMS banking, financial & Insurance products.
PFP focus missing.

ICICI Bank Private banking/ WMS None Relationship based business. Focus on
pushing banking, financial & insurance
products only. PFP focus missing.

ABN Amro Bank WMS/ Preferred banking None Retail customers are not targeted;
Clients with investible surplus >30 lakhs
only. Focus on baking & financial
products. Main focus on MF. PFP focus
missing.

HDFC Bank Private banking, None Equity, DP, MF & F&O products pushed
Recommendation on & recommended. PFP Focus missing.
Equity, MF & Insurance

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 Service Fees Remarks
Offering Charged

Kotak Securities WMS None Relationship based business. Focus on banking,

financial & Insurance products. PFP focus missing.

Citibank WMS None A/c holders targeted, relationship based business, focus
on banking, financial & Insurance products. PFP focus
missing.

Religare PMS Performance DP,MF, Equity, Commodities, Derivatives. Portfolio

Linked management based on risk profiles. No PFP Focus.

Deutsche Bank Private Banking/ None Relationship > Rs.5 Lakhs; RM- single touch point; MF
PFP & Insurance products & recommendations offered;
Consolidated gain/loss statements provided. However
part of PFP focus missing due to lack of goal
setting.

Allegro PFP Rs. 10,000- RMs handle clients; analytical & solution driven
20,000 approach for PFP.

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Structured Products are one of the most practical and recently developed
vehicles of wealth management.

Fixed
Income
Part

Security low Risk high

return return

Optional

Part

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Returns:

It varies according to the performance of the underlying assets.

Performance
Performance
65%. Linked
Linked
Component.
Component.
According to
the market
evolution.

Performance
Performance
Linked
Linked 20%.
Component.
Component. Guranteed
.

100%. Fixed-Income
Fixed-Income
Component.
Component.
Fixed-Income
Fixed-Income
Component.
Component.
80%.

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Features:
 Capital protection guaranteed.
 Less risk then any other product.
 Return linked to the value of an asset or level of an index
 Fixed term-both capital and return.
 Can be sold before maturity but return may be less.

Types:
 Structured notes: Equity linked, Multi assets linked, Commodity linked,
FX linked, Precious metal linked notes etc.
 One touch deposit
 Wedding cake deposit
 Options & lending
 Capital series

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 Comparison of Structured Products with other Traditional Products.
Basis of Comparison/ Structured Equity Mutual Funds. Debts/FD/NSC/KVP. Bank Deposits. Alternative
Products. Products. Shares/Stocks. Investments.

Investment Objectives. Capital Protected To get maximum To get high return Capital Security and Good Lowest Return In Future
and better return /highest return in in respect to Bank return, whether market is But Capital Investment Value
than other quick time. Deposit and NSC favorable or not. Safe. will rise or to have
Investments. etc. Capital Gain.

Risk Profile. Capital Protected Highly Risky due to Risky, NAV No Risk. No Risk. Somewhat Risk is
if held till dependency on Depends on there, especially in
Maturity, So No capital and stock Market Gold Investment.
Risk. market. Fluctuations.
Time Horizon. Lock in period is No Lock in Period in Lock in Period is No Lock in Period, But No Lock in No Lock in Period.
there. Full Existing one, but yes there in Close Return Differs. Period.
Tenure For in New issued ones. ended funds.
Capital
Protection and
return.
Profiles of Investors. Mostly HNIs All Clients, But for Individuals who Who don’t want to take risk Normal No Risk HNIs who takes
those who take high want to take less and wants good return than taker Investors. some risk on future
risk and want better risk and better normal savings. predictions of
and sooner return. return than market.
normal savings.

Future Outlook. Huge, Research Pretty well, but Good for Somehow Stagnant Still Growing High Growth future
Analysts investors are more individuals, small Prospects
Predicting $ 180 averse to it right now Investors, market
Billion market growing at 26
%annually

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Future:
 Population
 Skills
 Stock Market
 Affluent, HNIs and Ultra HNIs
 Market rules regarding structured products

Challenges & opportunities:

 Client education
 Scaling up
 Unorganized sector.
 Technology support

 Regulatory reforms
 Rolodex migration
 Certification issues
 Commoditization

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Experience:
 Attended presentation by SUPERFUND, an MNC based in Singapore on structured
products.
 Patience.
 Tackle questions.

Recommendations:
 Karvy should tap both organized and unorganized market on a large scale.
 Karvy should improve its after sales service & tap the existing customer base of Karvy.
 Karvy should make its website more attractive, user friendly and informative.
 Karvy can advertise regarding wealth management, financial planning and structured
products as many people don’t have idea about it.
 There is need to make the people aware of financial planning and PMS, WM difference.
 To consider the service charges as most companies to attract customers give
discounts.
 Different pricing for different income range can be introduced

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 Amongst the Top 5 Among the Top 3
Largest Independent
Stock Brokers Depository
Distributor for
Participants
Financial Products

Largest Network ISO 9002

Amongst Top 10
of Branches & certified operations Investment Bankers
Business Associates by DNV

Adjudged as one of India’s #1 Registrar

Full fledged
The Top 50 IT Users & Securities
IT driven operations
in India by MIS Asia Transfer Agent

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 Sound research team in equities, F&O, income tax, insurance, mutual funds

 An ever expanding network of branches to provide you service at your door step

 A wide basket of products which includes:- stock broking, commodity broking,

derivatives trading, insurance broking, tax planning, mutual funds advice,
property services etc.

 Personalized service catering to your unique tastes and requirements

 Over a 2 decade of experience in the financial services spectrum

 A member of FPSB and an exclusive team of CFPs involved in the preparation of
financial plan
 An ever expanding product portfolio consisting of future products like Mint
Street, co-branded credit cards etc.
 An efficient and effective top management
 Professional management
 PASSION for making you financial successful.

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Looking forward to
making you financially
successful.

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 Any
Questions ?

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Thank YOU

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