Mt Interim Report[1]

A Project Report On: Need of financial advisors for mutual fund investors (With special reference to HDFC) Interim report SUBMITTED BY:

ANAMIKA SINGH Enrollment No. 7nbbi021

Under the guidance of: Mrs. Anupama mishra

Assit. Manager of Faculty ICFAI Bhilai Axis Bank

Mrs. subhulakshmi

CONTENTS:

serial

Page

no

Topic

2 3 4 5

certificate by faculty guide Acknowledgement executive summary company overview

7

mutual funds basics

9

financial planning for investors

14

Systematic Investment Plan (in details)

17

research report

DECLARATION

no. 5 6 7 8—17 21—31 32

39-41

50

I, Miss ANAMIKA SINGH do hereby declare that the project report titled “NEED OF FINANCIAL ADVISORS FOR MUTUAL FUND INVETORS” is a genuine research work undertaken by me and it has not been published anywhere earlier.

Date : Anamika Singh Place: ICFAI Bhilai

Prof. Mrs. Subhulakshmi ICFAI NATIONAL COLLEGE BHILAI

Certificate by the faculty guide:

This is to certify that the project report entitled “Need of financial advisors for Mutual Fund Investors” at HDFC

is a bonafide record of work done by

Anamika Singh, and submitted in partial fulfillment of the requirements of MBA program of ICFAI National College, Bhilai.

Acknowledgement

Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from HDFC Mutual Fund overwhelmed me during the project. My sincere gratitude to Dr. Rajeev Verma (Center Head, ICFAI, Bhilai), for providing me with an opportunity to work with HDFC Mutual Fund. I am highly indebted to Mr. AMIT SRIVASTAV., Faculty Guide of security analysis, who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way. I also thank Prof. Mrs. Subhulakshmi , faculty guide, ICFAI, Bhilai who has sincerely supported me with the valuable insights into the completion of this project.

Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project.

Executive summary:

This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into two parts:  The first part gives an insight about the mutual funds and its various aspects. It is purely based on whatever I learned at karvy. One can have a brief knowledge about mutual funds and all its basics through the project. Other than that the real servings come when one moves ahead. Some of the most interesting questions regarding mutual funds have been covered. Some of them are: why has it become one of the largest financial intermediaries? How investors do chose between funds? Most popular stocks among fund managers, most lucrative sectors for fund managers, a special report on Systematic Investment Plan, does fund performance persists and the topping of all the servings in the form of portfolio analysis tool and its application. All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the datas have been well analyzed with the help of charts and graphs.

 The second part consists of datas and their analysis, collected through a survey done on 200 people. It covers the topic” need of financial advisors for mutual fund investors”. The data collected has been well organized and presented. Hope the research findings and conclusions will be of use. It has also covered why people don’t want to go for financial advisors? The advisors can take further steps to approach more and more people and indulge them for taking their advices.

Organization overview

Introduction:

“Success is a journey, not a destination.”

HDFC Asset

Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000.

Success sutras of HDFC: The success story of HDFC is driven by 8 success sutras adopted by it namely trust,

integrity,

dedication, commitment, enterprise,

hard work and team play, learning and innovation, empathy and humility. These are the values that bind success with HDFC. Vision of HDFC: To be dominant player in Indian Mutual Fund space , recognized for its high level of ethical and professional conduct and commitment towards enhancing investor interests.

Mission statement:

“Our mission is to be a leading and preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising , and technology driven organization which will set the highest standards of service and business ethics.”

Company overview:

HDFC Asset Management Company Limited (AMC) HDFC Asset Management Company Ltd (AMC) was incorporated under the Companies Act, 1956, on December 10, 1999, and was approved to act as an Asset Management Company for the HDFC Mutual Fund by SEBI vide its letter dated July 3, 2000. The registered office of the AMC is situated at Ramon House, 3rd Floor, H.T. Parekh Marg, 169, Backbay Reclamation, Church gate, Mumbai - 400 020. In terms of the Investment Management Agreement, the Trustee has appointed the HDFC Asset Management Company Limited to manage the Mutual Fund. The paid up capital of the AMC is Rs. 25.161 crore. The present equity shareholding pattern of the AMC is as follows : Particulars

% of the paid up equity capital

Housing Development Finance Corporation Limited

60

Standard Life Investments Limited

40

Hierarchical Structure in diagram:

The above diagram shows the hierarchy of HDFC Mutual Fund. It can be easily depicted from the diagram that the regional head is the supreme in the eastern region, under whom the various zonal heads operate and under these zonal heads, the branch heads operate. Between each level o the hierarchy, there exists a coordinator, who acts as the facilitator between the different heads.

HDFC Mutual Fund Services: Mutual funds have servings for everybody. Whichever type of investor you are, you will surely get a mutual fund meeting your requirements.

But investing in mutual funds is no child’s play therefore HDFC mutual fund advisory services is there to guide in each and every step of investment in mutual funds so that the dream of wealth creation doesn’t turns into nightmares. Its offerings includes: products of all the 33 major AMCs, research report about all the existing funds as well as NFOs, customized mutual fund portfolios designed for individual as well as institutional customers, it not only design the portfolios rather it offers continuous portfolio revision too depending on changing market outlook and evolving trends, it further gives access to its online consolidated portfolio statement. Thus HDFC with its various offerings makes the investor feel safe in this dynamic environment of the Indian financial market.

HDFC Computershare mutual fund services offers investors services, distributor services and client services. It can be said that HDFC is dedicated towards providing quality service to all these three facets of the investment process. HDFC being an intermediary is well registered with the Association of Mutual Funds of India (AMFI). HDFC has got the registration no [ARN 10994] for mutual funds, which is mentioned on every form. After the procurement of forms from various AMCs, the forms are passed on to its various zonal and branch offices (as per their requirements) and then further processing is done either directly or through sub-brokers. HDFC operates through its sub- brokers, associates and its excellent pool of own direct employees. The employees are offered salary by HDFC whereas the sub- brokers and associates get certain commission. The main source of earning for HDFC is the brokerage offered by the various AMCs known as pay-in. The amount offered may vary from AMC to AMC. Also, the franchisees have to pay a certain amount every month. Now HDFC also pay

a certain amount to the sub brokers and associates known as pay-out. The payout is decided according to the procurement done by them. Recruitment: HDFC has an enviable pool of dynamic employees. Its people power has a great contribution in making it the No. 1 financial intermediary. All the employees of HDFC dealing in mutual funds have to go through AMFI test. The recruitment process is at par with the industry standards, it is mostly done through campus recruitment from reputed B- schools. Other than that, it also recruits through direct interviews and GDs as per their requirement. HDFC never compromises with quality that’s the reason it is excelling by providing quality services to all the investors, clients, AMCs etc. associated with it.

Mutual funds

it’s all about mutual funds: Mutual funds: A mutual fund is a professionally-managed firm of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. In other words we can say that A Mutual Fund is a trust registered with the Securities and Exchange Board of India (SEBI), which pools up the money from individual / corporate investors and invests the same on behalf of the investors /unit holders, in equity shares, Government securities, Bonds, Call money markets etc., and distributes the profits. The value of each unit of the mutual fund, known as the net asset value (NAV), is mostly calculated daily based on the total value of the fund divided by the

number of shares currently issued and outstanding. The value of all the securities in the portfolio in calculated daily. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the fund’s NAV.

NAV = Net assets of the scheme No. of shares currently issued and outstanding Net assets of the scheme = (Market value of invest. + Receivable + other accrued income + other assets – accrued expenses – other payable – other liabilities) Advantages of a MF –

Mutual Funds provide the benefit of cheap access to expensive stocks

–

Mutual funds diversify the risk of the investor by investing in a basket of assets

–

A team of professional fund managers manages them with indepth research inputs from investment analysts.

–

Being institutions with good bargaining power in markets, mutual funds have access to crucial corporate information, which individual investors cannot access.

History of the Indian mutual fund industry: The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases. First Phase – 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. 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. The first scheme launched by UTI was

Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management. 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 Canbank 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. Third Phase – 1993-2003 (Entry of Private Sector Funds) 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. Fourth Phase – since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes

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. consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

Categories of mutual funds:

Mutual funds can be classified as follow:  Based on their structure: •

Open-ended funds: Investors can buy and sell the units from the fund, at any point of time.

•

Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of

the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.  Based on their investment objective: Equity funds: These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years. It can be further classified as: i) Index funds- In this case a key stock market index, like BSE Sensex or Nifty is tracked. Their portfolio mirrors the benchmark index both in terms of composition and individual stock weightages. ii) Equity diversified funds- 100% of the capital is invested in equities spreading across different sectors and stocks. iii|) Dividend yield funds- it is similar to the equity diversified funds except that they invest in companies offering high dividend yields. iv) Thematic funds- Invest 100% of the assets in sectors which are related through some theme. e.g. -An infrastructure fund invests in power, construction, cements sectors etc. v) Sector funds- Invest 100% of the capital in a specific sector. e.g. - A banking sector fund will invest in banking stocks. vi) ELSS- Equity Linked Saving Scheme provides tax benefit to the investors.

Balanced fund: Their investment portfolio includes both debt and equity. As a result, on the riskreturn ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes:

i) Debt-oriented funds -Investment below 65% in equities. ii) Equity-oriented funds -Invest at least 65% in equities, remaining in debt.

Debt fund: They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs. i) Liquid funds- These funds invest 100% in money market instruments, a large portion being invested in call money market. ii)Gilt funds ST- They invest 100% of their portfolio in government securities of and T-bills. iii)Floating rate funds - Invest in short-term debt papers. Floaters invest in debt instruments which have variable coupon rate. iv)Arbitrage fund- They generate income through arbitrage opportunities due to mis-pricing between cash market and derivatives market. Funds are allocated to equities, derivatives and money markets. Higher proportion (around 75%) is put in money markets, in the absence of arbitrage opportunities. v)Gilt funds LT- They invest 100% of their portfolio in long-term government securities. vi) Income funds LT- Typically, such funds invest a major portion of the portfolio in long-term debt papers. vii) MIPs- Monthly Income Plans have an exposure of 70%-90% to debt and an exposure of 10%-30% to equities. viii)FMPs- fixed monthly plans invest in debt papers whose maturity is in line with that of the fund. Investment strategies:

1. Systematic Investment Plan: under this a fixed sum is invested each month on a fixed date of a month. Payment is made through post dated cheques or direct debit facilities. The investor gets fewer units when the NAV is high and more units when the NAV is low. This is called as the benefit of Rupee Cost Averaging (RCA) 2. Systematic Transfer Plan: under this an investor invest in debt oriented fund and give instructions to transfer a fixed sum, at a fixed interval, to an equity scheme of the same mutual fund. 3. Systematic Withdrawal Plan: if someone wishes to withdraw from a mutual fund then he can withdraw a fixed amount each month.

Risk v/s. return:

Working of a Mutual fund

The entire mutual fund industry operates in a very organized way. The investors, known as unit holders, handover their savings to the AMCs under various schemes. The objective of the investment should match with the

objective of the fund to best suit the investors’ needs. The AMCs further invest the funds into various securities according to the investment objective. The return generated from the investments is passed on to the investors or reinvested as mentioned in the offer document. Regulatory Authorities: To protect the interest of the investors, SEBI formulates policies and regulates the mutual funds. It notified regulations in 1993 (fully revised in 1996) and issues guidelines from time to time. SEBI approved Asset Management Company (AMC) manages the funds by making investments in various types of securities. Custodian, registered with SEBI, holds the securities of various schemes of the fund in its custody. According to SEBI Regulations, two thirds of the directors of Trustee Company or board of trustees must be independent. The Association of Mutual Funds in India (AMFI) reassures the investors in units of mutual funds that the mutual funds function within the strict regulatory framework. Its objective is to increase public awareness of the mutual fund industry. AMFI also is engaged in upgrading professional standards and in promoting best industry practices in diverse areas such as valuation, disclosure, transparency etc.

Documents required (PAN mandatory): Proof of identity :1.photo PAN card 2. In case of non-photo PAN card in addition to copy of PAN card any one of the following: driving license/passport copy/ voter id/ bank photo pass book. Proof of address (any of the following ) :latest telephone bill, latest electricity bill, Passport, latest bank passbook/bank account statement, latest Demat account statement, voter id, driving license, ration card, rent agreement. Offer document: an offer document is issued when the AMCs make New Fund Offer(NFO). Its advisable to every investor to ask for the offer document and read it before investing. An offer document consists of the following:

Standard Offer Document for Mutual Funds (SEBI Format) Summary Information Glossary of Defined Terms Risk Disclosures Legal and Regulatory Compliance Expenses Condensed Financial Information of Schemes Constitution of the Mutual Fund Investment Objectives and Policies Management of the Fund Offer Related Information. Distribution channels: mutual funds posses a very strong distribution channel so that the ultimate customers doesn’t face any difficulty in the final procurement. The various parties involved in distribution of mutual funds are:

1.Direct marketing by the AMCs: the forms could be obtained from the AMCs directly. The investors can approach to the AMCs for the forms. some of the top AMCs of India are; Reliance ,Birla Sunlife, Tata, SBI magnum, Kotak Mahindra, HDFC, Sundaram, ICICI, Mirae Assets, Canara Robeco, Lotus India, LIC, UTI etc. whereas foreign AMCs include: Standard Chartered, Franklin Templeton, Fidelity, JP Morgan, HSBC, DSP Merill Lynch, etc. 2.broker/ sub broker arrangements: the AMCs can simultaneously go for broker/sub-broker to popularize their funds. AMCs can enjoy the advantage of large network of these brokers and sub brokers.eg: HDFC being the top financial intermediary of India has the greatest network. So the AMCs dealing through HDFC has access to most of the investors. 3.Individual agents, Banks, NBFC: investors can procure the funds through

individual agents, independent brokers, banks and several non- banking financial corporations too, whichever he finds convenient for him. Performance measures: Equity funds: the performance of equity funds can be measured on the basis of: NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualized Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage. Debt fund: likewise the performance of debt funds can be measured on the basis of: Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return and Expense Ratio. Liquid funds: the performance of the highly volatile liquid funds can be measured on the basis of: Fund Yield, besides NAV Growth, Total Return and Expense Ratio.

Financial planning for investors( ref. to mutual funds): Investors are required to go for financial planning before making investments in any mutual fund. The objective of financial planning is to ensure that the right amount of money is available at the right time to the investor to be able to meet his financial goals. It is more than mere tax

planning. Steps in financial planning are: Asset allocation. Selection of fund. Studying the features of a scheme. In case of mutual funds, financial planning is concerned only with broad asset allocation, leaving the actual allocation of securities and their management to fund managers. A fund manager has to closely follow the objectives stated in the offer document, because financial plans of users are chosen using these objectives.

Systematic investment plan (in details) We have already mentioned about SIPs in brief in the previous pages but now going into details, we will see how the power of compounding could benefit us. In such case, every small amounts invested regularly can grow substantially. SIP gives a clear picture of how an early and regular investment can help the investor in wealth creation. Due to its unlimited advantages SIP could be redefined as “a methodology of fund investing regularly to benefit regularly from the stock market volatility. In the later sections we will see how returns generated from some of the SIPs have outperformed their benchmark.

Research report Objective of research;  The main objective of this project is concerned with getting the opinion of people regarding mutual funds and what they feel about availing the services of financial advisors.  I have tried to explore the general opinion about mutual funds. It also covers why/ why not investors are availing the services of financial advisors.  Along with it a brief introduction to India’s largest financial intermediary, KARVY has been given and it is shown that how they operate in mutual fund deptt Scope of the study: The research was carried on in the Eastern Region of India. It is restricted to BHILAI where it has got 1 branch offices . I have visited people randomly nearby my locality, different shopping malls, small retailers etc. Data sources: Research is totally based on primary data. Secondary data can be used only for

the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites and some special publications of HDFC. Sampling:  Sampling procedure: The sample is selected in a random way, irrespective of them being investor or not or availing the services or not. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the measures of central tendencies like mean, median, mode. The group has been selected and the analysis has been done on the basis statistical tools available.  Sample size: The sample size of my project is limited to 200 only. Out of which only 135 people attempted all the questions. Other 65 not investing in MFs attempted only 2 questions.  Sample design: Data has been presented with the help of bar graph, pie charts, line graphs etc.  Limitation:  Time limitation.  Research has been done only at Bhilai.  Some of the persons were not so responsive.  Possibility of error in data collection.

 Possibility of error in analysis of data due to small sample size.

Data analysis:  Have you ever invested/ interested to invest in mutual funds? YES NO

135 65

 .what is the most important reason for not investing in mutual funds? (only for

above 65 participants)

Lack of knowledge about mutual

25

funds Enjoys investing in other options Its benefits are not enough to

10 18

drive you for investment No trust over the fund managers

12

 .where do you find yourself as a mutual fund investor? Totally ignorant Partial knowledge of MFs Aware of only scheme in which invested Good knowledge of MFs

28 37 46 24

 .where from you purchases mutual funds? Directly from the AMCs Brokers only ( large intermediaries) Broker/ sub-brokers Other sources

33 28 59 15

 Which feature of the mutual funds allure you most? Diversification Professional management Reduction in risk and transaction

42 29 34

cost Helps in achieving long term goal

30

 According to you which is the most suitable stage to invest in mutual funds?

Young unmarried stage Young Married with children stage Married with older children stage Pre retirement stage

55 32 21 27

 Are you availing the services of personal financial advisors?

Yes No

87 48

 Which expertise of the personal financial advisor is demanded most?

Portfolio review & investment recommendation Planning to achieve specific financial goals Managing assets in retirement Access to specialists in areas such as tax

43 35 30 27

planning

 What is the major reason for using

financial advisors?

Want help with asset allocation Don’t have enough time to make

42 23

own decision To explain various investment

37

options Want to have surety about

33

financial goals

 What is the major reason for not using financial advisor?

Have access to all resources needed Believe advisors are too expensive Unsure how to find a trustworthy advisor Want to be in control of own investments

18 53 21 43

Research findings and conclusions:  At the survey conducted upon 200 people, 135 are already mutual fund investors or are interested to invest in future and the remaining 65 are not interested in it. So there is enough scope for the advisors to convert those 65 participants into investors through their convincing power and great communication skills.  Now, when those 65 people were asked about the reason of not investing in mutual funds, then most of the people held their ignorance responsible for that. They lacked knowledge and information about the mutual funds. Whereas just 10 people enjoyed investing in other option. For 18 people, the benefits arousing from these investments were not enough to drive them for investment in MFs and 12 people expressed no trust over the fund managers’ decision. Again the financial advisors can tap upon these people by educating them about mutual funds.  Out of the 135 persons who already have invested in mutual funds/ are interested to invest, only 18% have sound knowledge of MFs, 34% people are aware of only the schemes in which they have invested. 27% possess partial knowledge whereas 21% stands nowhere in knowledge about MFs.

 33 participants buy forms directly from the AMCs, 28 from brokers only, 55 from brokers and sub-brokers even then 15 people buy from other sources. The brokers and sub brokers have the maximum reach so they should try to make those investors aware f the happenings, even the AMCs should follow it.  When asked about the most alluring feature of MFs, most of them opted for diversification, followed by reduction in risk, helps in achieving long term goals and helps in achieving long term goals respectively.  Most of the investor preferred to invest at a young unmarried stage. Even 32 persons were ready to invest at a stage of young married with children but person with older children avoid investing due to increased expenses. But again the number rose to 27 at pre-retirement stage.  Out of them 87 were already availing the services of financial advisors whereas 48 didn’t. When asked about the expertise of financial advisors which they liked most? 43 of them favored portfolio review and investment recommendation, followed by planning to achieve long term goals, managing assets in retirement and access to specialists in area such as tax planning.  42 participants regarded asset allocation as the major reason for going for financial advisors. 37 of them needed them to explain them the various investment options available.33 of them wanted to make sure that they were saving enough to meet their financial goals. While just 23 gave the reason- lack of time.

 When asked about one reason for not availing the services of financial advisors, about 53 of them pointed the advisors as expensive. 43 of them wished to be in control of their own assets.21 of them said that they find it difficult to get trustworthy advisors. Whereas 18 of them said they have access to all the necessary resources required.

 Exhibit 1 Questionnaire:  .have you invested /are you interested to invest in mutual funds? Yes [ ]

No [ ] (plz. attempt the next

question)

 .what is the most important reason for not investing in mutual funds? Lack of knowledge about mutual funds

[ ]

Enjoys investing in other options

[ ]

Its benefits are not enough to drive you for investment [ ] No trust over the fund managers

[ ]

 .where do you find yourself as a mutual fund investor? Totally ignorant

[ ]

Partial knowledge of mutual funds

[ ]

Aware only of any specific scheme in which you invested [ ] Fully aware

[ ]

 .where from you purchase mutual funds? Directly from the AMCs [ ] Brokers only Brokers/ sub-brokers

[ ] [ ]

Other sources

[ ]

 .which feature of the mutual funds allure you most? Diversification Professional management

[ ] [ ]

Reduction in risk and transaction cost [ ] Helps in achieving long term goals

[ ]

 . According to you which is the most suitable stage to invest in mutual funds? Young unmarried stage

[ ]

Young Married with children stage [ ] Married with older children stage [ ] Pre-retirement stage

[ ]

 . are you availing the services of personal financial advisors? YES [ ]

NO [ ]

 .which expertise of the personal financial advisor is demanded most? Portfolio review & investment recommendation [ ] Planning to achieve specific financial goals Managing assets in retirement Access to specialist in areas such as tax planning

[ ] [ ] [ ]

 .what is the major reason for using financial advisors? Want help with asset allocation [ ] Don’t have time to make my own investment decision

[

] To explain various investment options

[ ]

Want to make sure I am investing enough to meet my financial goals [ ]

 .what is the major reason for not using financial advisor? Have access to all resources needed to invest on own [ ] Believe advisors are too expensive

[ ]

Unsure how to find a trustworthy advisor

[ ]

Want to be in control of own investment

[ ]

Bibliography: Websites: www.the-finapolis.com www.hdfc.com www.mutualfundsindia.com www.valueresearchonline.com www.moneycontrol.com www.morningstar.com www.yahoofinance.com www.theeconomictimes.com www.rediffmoney.com www.bseindia.com www.nseindia.com www.investopedia.com

journals & other references: HDFC–the finapolis HDFC- business associates manual The Economic Times Business Standard The Telegraph Business India Fact sheet and statements of various fund houses.