NEED OF FINANCIAL ADVISOR FOR MUTUAL FUND INVESTOR

A Study
On
³
Need of financial advisor for Mutual Fund Investors´

(Conducted At BIRLA MUTUAL FUND Pvt. Ltd, pune

From 16 St may to 16th July. 2010)

A project report submitted to in the partial fulfillment of requirement of the award of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

Manish Tiwari

PGDM (Sem-2nd)

Roll no: 44

Under the guidance of

Dr. thirumagal pillai

Indira Institute of management

Submitted To:

POST GRADUATE DIPLOM A IN M ANAGEM ENT

 ACKNOWLEDGEMENT
“The only place where success comes before work is in the dictionary.’’

It is great exposure for me using my theoretical knowledge which I have learnt till 2nd semester of
post graduate diploma in management (P.G.D.M) in my project work which I have done at Birla Sun
Life Mutual Fund Pvt. Ltd. It is great pleasure to use knowledge in practical way in our tenure of training.

I like to first heartily thanks to INDIRA INSTITUTE OF MANAGEMENT PUNE (IIMP)

for including project in our P.G.D.M syllabus. It is helpful to learn real situation of industry and
helpful for increasing in our practical knowledge.

I thankful to Dr. thriumagal pillai , faculty of Indira Institute of management For giving me
chance to do my project work

I am very thankful to Mr. Chirag Patel, Branch Manager of Birla Sun Life Mutual Fund
Pvt. Ltd. As without his help and guidance this project is not possible, he share his good
knowledge and guide in my project work. I am also thankful to all staff member of Birla Sun Life
Mutual Fund Pvt. Ltd.
I am thankful to my project guide Mr. Nishant Modi for guiding during my project tenure. As he
helps me whenever I need and spare her valuable time. Without her this project is not possible.

I am thankful to my parents and my friends as they always motivate me and help me

directly or indirectly in my project work.

MANISH TIWARI.
 DECLARATION
I MANISH TIWARI , hereby declare that the project report entitled “NEEDOF FINANCIAL
ADVISOR FOR MUTUAL FUND INVESTORS” under the guidance of Dr. THRIUMAGAL PILLAI
Submitted in partial fulfillment of the requirements for the award of the degree of POST
GREDUATE DIPLOMA IN MANAGEMENT to INDIRA INSTITUTE OF MANAGEMENT,
PUNE is my original work ± research study ± carried out during 16stMAY, 2016 to 16 th July, 2016 and
not submitted for the award of any other degree/diploma/fellowship or other similar titles or
prizes to any other institution/organization or university by any other person.

Signature,
( MANISH TIWARI )
(P.G.D.M 44)
 INDEX
Chapter Page
Contents
No. No.
1 INTRODUCTION AND RATIONALE OF THE STUDY
Introduction to the Title
Significance of the study/project
2 INDUSTRY/ SECTOR PROFILE
Overview of the Industry/Sector
Contribution of the Sector towards GDP
Trend of industry performance for last three year
Majaor Players in the Industry
PEST/STEPIN Analysis
3 COMPANY PROFILE
Composition of Board
Mission, Vision and Values of the Company
Geographical Presence
Marketing Organisation
Product Categories
Customer Segments
Distribution Channels
Business Performance
Major Achievements
SWOT Analysis
4 LITERATURE REVIEW
5 OBJECTIVES AND SCOPE OF PROJECT
6 RESEARCH METHODOLOGY
7 ANALYSIS AND FINDINGS
Data Tabulation
Graphical Interpretation
Findings with explanation
8 CONCLUSIONS
9 KEY LEARNINGS
10 BIBLIOGRAPHY/ REFERENCES
11 GLOSSARY
12 ANNEXURES
13 QUESTIONNAIRE
 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 Birla Sun Life Mutual Fund. 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(SIP), 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 data have been well analyzed with the help of charts and graphs.

The second part consists of data 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 finding sand 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.
 C O MP A N Y P R O F I L E

Of

B I R L A S U N L I F E MU T U A L F U N D
The Aditya Birla Group is one of India's largest business houses. Global in vision, rooted in
Indian values, the Group is driven by a performance ethic pegged on value creation for
its multiple stake holders. The Group's operations span 66 state of the art, straddling India,
Thailand, Malaysia, Indonesia, Egypt, Philippines, Canada, Australia and China. A US $28 billion
corporation with a market cap. Of US $31.5 billion and in the League of Fortune 500, the Aditya Birla
Group is anchored by an extraordinary force of 100,000 employees, belonging to 25 different
nationalities. Over 50 per cent of its revenues flow from its operations across the world. The Aditya Birla
Group is a dominant player in all its areas of operations viz; Aluminum, Copper, Cement,
Viscose Staple Fiber, Carbon Black, Viscose Filament Yarn, Fertilizers, Insulators, Sponge Iron,
Chemicals, Branded Apparels, Insurance, Mutual Funds, Software and Telecom. The Group has
strategic joint ventures with global majors such as Sun Life (Canada), AT&T (USA), the Tata
Group and NGK Insulators (Japan), and has ventured into the BPO sector with the acquisition of
Trans Works, a leading ITES/BPO company.

Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse
range of wealth accumulation and protection products and services to individuals and corporate
customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key
markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the
Philippines, Japan, Indonesia, India, China and Bermuda. Since its inception in 1994, Birla Sun
Life Mutual fund has emerged as one of India's leading Mutual Funds managing assets of a large
investor base. The fund offers arange of investment options, which include diversified and sector
specific equity schemes, fund of fund schemes, hybrid and monthly income funds, a wide range of debt and
treasury products and offshore funds.
Birla Sun Life Asset Management Company Ltd. (BSLAMC), the investment managers of Birla
Sun Life Mutual Fund, is a joint venture between the Aditya Birla Group and the Sun Life
Financial Services Inc. of Canada. The joint venture brings together the Aditya Birla Group s
experience in the Indian market and Sun Life s global experience.

No. of schemes 71
No. of schemes including options 218
Equity Schemes 63
Debt Schemes 106
Short term debt Schemes 17
Equity & Debt 10
Money Market 0
Gilt Fund 16
Corpus under management

Rs.49983.17 Crs. as on Feb 28, 2015

Key Personnel
Donald Stewart (Chairman),
A Balasubramanian (CEO),
Ashok Suvarna (COO),
Abhay Palnitkar (CFO),
Sanjay Singal(CMO),
Bhavdeep Bhatt ( Head Products),
Chandrashekhar Chavan (Head HRD),
Rama Vasantharajan ( Hd Compliance &Risk)

Fund Managers
Ajay Garg , Ankit Sancheti , Atul Penkar , Maneesh Dangi , Navneet Munot, Nishit Dholakia ,
Prasad Dhonde , Sanjay Chawla , Satyabrata Mohanty, Sunainada Cunha , Vineet Maloo .
BSLAMC follows a long-term, fundamental research based approach to investment. The
approach is to identify companies, which have excellent growth prospects and strong
fundamentals. The fundamentals include the quality of the company’s management,
sustainability of its business model and its competitive position, amongst other factors. Birla Sun
Life Asset Management Company has one of the largest team of research analysts in the
industry, dedicated to tracking down the best companies to invest in. Birla Sun Life AMC strives
to provide transparent, ethical and research-based investments and wealth management services.
As of 30 June 2016, the birla Sun Life Financial group of companies had total
assets under management of CDN $ 846 billion.

Vision
To be the most trusted name in investment and wealth management, to be the preferred employer
in the industry and to be a catalyst for growth and excellence of the asset management business
in India.

M is s ion
 Achieving superior and consistent investment results.
 Creating a conducive environment to hone and retain talent.
 Providing customer delight.
 Institutionalizing system-approach in all aspects of functioning.
 Upholding highest standards of ethical values at all times.

Values
 Integrity
 Commitment
 Passion
 Seamlessness
 Speed
Track Record
With a proven track record of over 20 years, Birla Sun Life Mutual Fund has been catalysts
towards the growth of the private sector asset management business.

Investment Philosophy
Birla Sun Life Mutual Fund follows a long-term, fundamental research based approach to
investment. The approach is to identify companies, which have excellent credit-worthiness and
strong fundamentals. The fundamentals include the quality of the company's management,
sustainability of its business model and its competitive position, amongst other factors. Birla Sun
Life Asset Management Company (BSLAMC) has one of the largest team of research analysts in
the industry, dedicated to tracking down the best companies to invest in. BSLAMC will always strive to
provide transparent, ethical and research-based investments and wealth management services.

Geographical Reach
Today, BSLAMC is present in 111 locations, including 74 branches.

Product Offerings
Birla Sun Life Mutual Fund offers a range of investment options, which include diversified and sector
specific equity schemes, fund-of-fund schemes, hybrid and monthly income funds, a wide range
of debt and treasury products and offshore funds. BSLAMC also provides Private Wealth
Management services.
 BIRLA SUN LIFE MUTUAL FUND’S
DIFFERENT SCHEMEs
EQUITY SCHEMES
Birla Sun Life Advantage Fund
Birla Sun Life Dividend Yield Plus
Birla Sun Life Tax Plan
Birla Sun Life Index Fund
Birla Sun Life India GenNect Fund
Birla Sun Life India Opportunities
Fund
Birla Sun Life Midcap Fund
Birla Sun Life MNC Fund
Birla Sun Life Basic Industries fund
Birla Sun Life Buy India Fund
Birla Sun Life Equity Fund
Birla Sun Life Frontline Equity Fund
Birla Sun Life New Millennium fund
Birla Sun Life Tax Relief’96
Birla Sun Life Top 100 fund
DEBT SCHEMES
Birla Sun Life Short Term Opportunities Fund
Birla Sun Life Dynamic Bond fund
Birla Sun Life Gilt Plus- liquid Plan
Birla Sun Life Gilt Plus-PF Plan
Birla Sun Life Gilt Plus- Regular Plan
Birla Sun Life Income Plus
Birla Sun Life Govt. Securities(Long Term)
Birla Sun Life Govt. Securities(Short Term)
Birla Sun Life Income Fund- Half Yearly Dividend
Birla Sun Life Income Fund- Quarterly Dividend
Birla Sun Life Liquid Plus-Institutional Monthly
Dividend
Birla Sun Life Liquid Plus-Retail Monthly
Dividend
Birla Sun Life Short Term Fund- Monthly Dividend
MARKRTING DEPARTMENT
Marketing is a comprehensive term & it includes all resources & set of activities necessary to
direct & facilitate the flow of goods & services from producer to consumer in the process of
distribution.³Marketing is the human activity directed at satisfying needs & wants through
exchange process. Marketing is the process of planning, pricing, distribution of goods, ideas;
services create exchanges that satisfy individual & organizational goals.

PRODUCT PLANNING
A product planning is a company plan for marketing its products. Product planning means
planning for the product that is to decide what type of products to be produced or what needs or
requirements the product should satisfy. In Birla Sun Life Mutual Fund, product planning is done very
carefully. They first contact Advisors & ask, for the what type of product customers want means
Debt based, Equity Based or Low risk Product etc then they prepare few samples & give to
Advisors. As per the suggestions & Response of customers they prepare the new Schemes.

STRATEGIES RELATED PRODUCT

In developing a marketing strategy of individual products, the seller has to comfort many
decision. There are four elements related to the products. The brief study of these elements will
complete the concept. These four elements are:
1. Branding
2. Packing & labeling
3. Promotion
4. After sales service

First one is Brand. Branding is the art and corner stone of marketing. A brand identifies the
seller or marketing. It can a name, trademark, logo or other symbol under trademark law, the seller is granted
exclusive right to the use of brand name.

Second element is packing and labeling. Many marketers are of view that packing is a
fifth P along with price, product, place and promotion. Packing includes the activities of
designing and producing the container or wrapper for product while the label identifies the
product. ³Birla Sun Life Mutual Fund´ also gives much important to the packing and labeling.

Next is Promotion. Today promotion is one of the most important tools for stay in
competition. Birla give full attention on this segment because Mutual Fund Industry is totally
service based company and required high promotion to attract the investors.

BIRLA prepare and distribute its new schemes regularly with some exclusive paper
advertisement. Because in this industry the past performance is only measure of performance of
company and it only show through paper Advertisement.

It also distributes Seasonal Gifts to their Advisor for promoting their product and
motivates them. Example: Give free Umbrella in Monsoon under ³MonsoonDhamaka´ Schemes
to attract the advisor for promote BIRLA’s products. In this business the actual work of company
start after sales of product i.e. After Sales Services. After Sales Services include how company
response to their Clint. BIRLA is known for their After Sales Services.
 Birla send monthly valuation report of their Clint through currier.
 Birla solved any Query within 48 hours.
 Birla also continues suggest good schemes to their current Clint.
 Birla give Statement of their (Clint) investment free of costs.

PERSONNEL (HR) DEPARTMENT
Personnel management is the most important area of any business organization. The main aim of
personnel management is to manage the personnel at work. It is concern with employees both as
individual as well as group. The aim being to get better results with their collaboration and
activity involvement in the organization activity. ’’Personnel management means quite simply
the task of dealing with human relationship within an organization’’. Personnel management is
that phase of management which deals with the effective control and use of manpower as distinguished
from other sources of power´

ORGANISATION STRUCTURE
Organization is a group of people working together co-operating under authority, towards
achieving benefit the participants and the organization. Every organization has goals
and objectives. In Birla Sun Life Mutual Fund, there is a separate personnel department
for achievement of goals. Personnel management is a most important part in an organization. All
the functions related with personnel department. Personnel manager has got higher status in the
organization.

RECRUITM ENT
Recruitment is the process of selection for prospective employees simulating them to
apply for job in the organization. In other words it is linking activity bearing to gather with jobs,
selection jobs. Recruitment makes it possible to acquire the number and type of people
necessary to ensure the continued operation of the organization.

“Recruitment is a process of searching for prospective employee and stimulating

encouraging them to apply for jobs in an organization.”

There are two sources of requirement:

1. Internal Sources

 Promotion
 Transfer
 Demotion

2. External Sources
 Advertisement
 Employment
 On Campus Requirement
 Employee Recommendation
 In “Birla Sun Life Mutual Fund” they are using internal sources as well as external
sources. Their policy for external sources is such that first they give advertisement in the
newspaper and they have also contact with employment exchange through these source first of
all collect application, separated and then after appropriate candidates are called for the
interview.

SELECTION
After creating if application of required number of employees secured through different
sources of recruitment the selection process begins. The main purpose of selection process of
selection process is it find the right man for each job. The efficiency and profitability of the
concern depends mainly on proper selection of the personnel.
Company select employees through commercial made of three numbers. One is the work
manager, second is of manager and the third is the head department in which company exists.

MUTUAL F UNDs
 INTRODUCTION
A Mutual fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is invested by the fund manager indifferent types of
securities depending upon the objective of the scheme. These could range from shares to
debentures to money market instruments. The income earned through these investments and the
capital appreciation realized by the scheme is shared by its unit holders in proportion to the number of
units owned by the (pro rata).Thus a Mutual fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed portfolio at a
relatively low cost. Anybody with an invest able surplus of as a few thousand rupees can invest
in Mutual Funds. Each Mutual Fund scheme has a defined investment objective and strategy.

A mutual fund is the ideal investment vehicle for today's complex and modern financial
scenario. Markets for equity shares, bonds and other fixed income instruments, real estate,
derivatives and other assets have become mature and information driven. Price changes in these
assets are driven by global events occurring in faraway places. A typical individual is unlikely to
have the knowledge, skills, inclination and time to keep track of events, understand their
implications and act speedily. An individual also finds it difficult to keep track of ownership of
his assets, investments, brokerage dues and bank transactions etc.

A mutual fund is answer to all these situations. It appoints professionally qualified and
experienced staff that manages each of these functions on a full time basis. The large pool of
money collected in the fund allows it to hire such staff at a very low cost to each investor. In
effect, the mutual fund vehicle exploits economies of scale in all three areas ± research,
investments and transaction processing. While the concept of individuals coming together to
invest money collectively is not new, the mutual fund in its present form is a 20th century phenomenon.
In fact, mutual fund gained popularity only after the Second World War. Globally, there are
thousands of firms offering tens of thousands of mutual funds with different investment
objectives.

Today, mutual funds collectively manage almost as much as or more money as compared to
banks

Mutual Funds now represent perhaps the most appropriate investment opportunity for most
investors. As financial markets become more sophisticated and complex, investors need a
financial intermediary who provides the required knowledge and professional expertise on
successful investing. As a result, in the birthplace of mutual funds - the U.S.A. - the fund industry has
overtaken the banking industry: more fund sare under mutual fund management than deposited with banks.

In India with more person getting interested to earn more from their saving to minimize the
effect of growing inflation mutual funds are becoming one the best way to achieve the required
solution. Despite the fact that mutual funds are still a new financial intermediary in India, they
have started opening up many exciting investment opportunities for the Indian investor.

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 = Total value of the fund

Number of shares currently issued and outstanding

RISK ASSOCIATED WITH THE INVESTMENT IN THEMUTUAL FUNDS

Savings are invested in various investment opportunities for earning better returns. The
returns of the investment depend upon the risk of such investment. All investments involve some
risk. The objective of any investor is to minimize the risk and maximize returns. The value of
financial assets depends on their return and risk patterns.

Risk can be defined as “the chance factor in trading in which expected or perspective advantage,
gain, profit or return may not materialize”

The actual outcome of investment may be less than the expected outcome. The greater is
the variability in the possible outcome, the greater is the risk. Generally, the variance and the
standard deviation of return are used as the alternative statistical measures of the risk of the
financial asset. Similarly, co-variance measured the risk of the assets, relative to other assets in a
portfolio. Some risks can be controlled by the investors. Others cannot be controlled, and they
are to be borne by the investor compulsorily.

DIFFERENT TYPES OF RISK IN MUTUAL FUNDs

Risk is an inherent aspect of every form of investment. For mutual fund investments,
risks would include variability, or period-by-period fluctuations in total return. The value of the
scheme’s investment may be affected by factors affecting capital markets such as price and
volume, volatility in the stock markets, interest rates, currency exchange rates, foreign
investment, changes in government policy, political, economic or other developments.

Market Risk

At times the prices or yields of all the securities in a particular market rise or fall due to
broad outside influences. When this happens, the stock prices of both an outstanding, highly
profitable company and a fledgling corporation may be affected. This change in price is due to
“market risk”.
Inflation Risk

Sometimes it is referred to as ³loss of purchasing power´. Whenever the rate of inflation

exceeds the earnings on your investment, you run the risk that you will actually be able to buy less, not more.

Credit Risk

In short, how stable is the company or entity to which you lend your money when you invest? How
certain are you that it will be able to pay the interest you are promised, or repay your principal when the
investment matures?

PERFORMANCE OF MUTUAL FUND IN INDIA

Let us start the discussion of the performance of mutual funds in India from the concept of mutual fund
took birth in India. The year was 1963, Unit Trust of India invited investors or rather to those
who believed in savings, to park their money in UTI mutual fund. And their idea of this investment was
good.

For 30 years it goaled without a single second player . Though the 1988 year saw some new mutual fund
companies, but UTI remained in a monopoly position.

The performance of mutual funds in India in the initial phase was not even closer to
satisfactory level. People rarely understood, and of course investing was out of question. But yes, some 24
million shareholders were accustomed with guaranteed high returns by the beginning of liberalization of
the industry in 1992. This good record of UTI became marketing tool for new entrants. The
expectations of investors touched the sky in profitability factor. However, people were miles
away from the preparedness of risks factor after the liberalization.

The Assets under Management of UTI was Rs. 67bn. by the end of 1987. Let me concen rate about the
performance of mutual funds in India through figures. From Rs.67bn. the Assets under Management rose to Rs.
470 bn. in March 1993 and the figure had a three times higher performance by April 2004. It rose as high as Rs.
1,540bn.

The net asset value (NAV) of mutual funds in India declined when stock prices started
falling in the year 1992. Those days, the market regulations did not allow portfolio shifts into
alternative investments. There were rather no choices apart from holding the cash or to further
continue investing in shares. One more thing to be noted, since only closed-end funds were
floated in the market, the investors disinvested by selling at a loss in the secondary market.

The performance of mutual funds in India suffered qualitatively. The 1992 stock market
scandals, the losses by disinvestments and of course the lack of transparent rules in the where
about rocked confidence among the investors. Partly owing to a relatively weak stock market
performance, mutual funds have not yet recovered, with funds trading at an average discount of
1020 percent of their net asset value.
The supervisory authority adopted a set of measures to create a transparent and competitive
environment in mutual funds. Some of them were like relaxing investment restrictions into the
market, introduction of open-ended funds, and paving the gateway for mutual funds to launch
pension schemes.

The measure was taken to make mutual funds the key instrument for long-term saving. The more
the variety offered, the quantitative will be investors.

At last to mention, as long as mutual fund companies are performing with lower risks and higher
profitability within a short span of time, more and more people will be inclined to invest until
and unless they are fully educated with the dos and don’ts of mutual funds.

ORGANISATION OF MUTUL FUND