Project Report

on
“Private Wealth Management”
SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE
DEGREE OF B.COM. (HONS.) Batch (2016-19)

Under the Guidance of

Ridhima Sharma

Submitted By:
ABHISHEK JAIN
Roll No. 0021778816
B.COM. (HONS.) 2015-18
Semester VI-A

Vivekananda Institute of Professional Studies

(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi)
Vivekananda Institute of Professional Studies
AU Block (Outer Ring Road)Pitampura
Delhi – 110034

1
 INDEX

Topic Page No

Declaration/Certificate 3-4

Acknowledgement 5

Executive Summary 6

Chapter 1:Introduction 7

Chapter 2:Review of Literature 22

Chapter 3:Research Methodology 40

Chapter 4:Data Analysis 47

Chapter 5:Summary & Conclusions 54

References/Bibliography 58

Annexures 63

2
 DECLARATION

This is to certify that the Summer Project titled “Private Wealth Management” is an
academic work done by Abhishek Jain under the guidance of Abhishek Jain
submitted in the partial fulfilment of the requirements for the award of degree of
Bachelor of Commerce with Honours at Vivekananda Institute of Professional Studies,
New Delhi. This is the original piece of work and has not been submitted elsewhere.

Abhishek Jain has given an undertaking that the information presented in the project
has not been submitted earlier.

(Signature of Faculty)

(Ridhima Sharma)

Faculty, VIPS

3
 Certificate from Guide

This is to certify that the Project titled “Private Wealth Management” is an academic
work done by “ABHISHEK JAIN” submitted in the partial fulfillment of the
requirement for the award of the Degree of Course from Vivekananda Institute of
Professional Studies.  It has been completed under the guidance of Ridhima Sharma
(Faculty Guide). The authenticity of the project work will be examined by the viva
examiner which includes data verification, checking duplicity of information etc. and it
may be rejected due to non-fulfillment of quality standards set by the Institute.

Signature of the Faculty Guide

(Dean V.S.B.S.)

4
 ACKNOWLEDGEMENT

I take this opportunity to express my profound gratitude and deep regards to my guide
Ridhima Sharma for his exemplary guidance, monitoring and constant
encouragement throughout the course of this project. The blessing, help and guidance
given by (him/ her) time to time shall carry me a long way in the journey of life on
which I am about to embark.
Last but not least, my sincere thanks to my parents and friends for their wholehearted
support and encouragement.

Abhishek Jain

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 EXECUTIVE SUMMARY

This report provides an analysis and evaluation of the Risk Perceptions of individuals
for suggesting ideal financial options available under his/her genre, via Globe Capital
Market Limited. Methods of analysis include trend, horizontal and vertical analyses
under convenience sampling as well as ratios/percentages such as Composition
Ratio/Percent, Risk ratios/Percent, etc.. Other calculations include rates of return on
Equity and Total Assets , and Net Asset Value (NAV) to name a few. All calculations
can be found in the Report. Results of data analysed show that all ratios are Varied. In
particular, comparability of nature of investor’s perceptions for risk taking is
heterogeneous in terms of future goals, liquidity, investments, and financial
management. The report finds the prospects of the individuals in its current position
are not optimal.

The major areas of weakness require further investigation and remedial action by
spreading awareness.

Recommendations discussed include:

a) Improving the scale of awareness.

b) improving/increasing campaigns.

The report also investigates the fact that the analysis conducted has limitations. Some
of the limitations include:
Forecasting figures may not define the population and the size of sample is limited,
nordo the current economic conditions are taken into account, data limitations-as
enough information is not provided or enough detail i.e. micro details are not
known,Therefore, the results are based on data collected and not the population as a
whole.

6
Chapter
-1“Introducti
”

on”

7
 CHAPTER 1 - INTRODUCTION

1.1 Introduction

For Risk analysis and Financial planning, the undertaker of this post must first be
satisfied with his job. An unsatisfied employee would not be able to assess the
customers risk accurately.

Job satisfaction can be defined as an employee's attitude towards the job. It is not same
as motivation, rather it is concerned with the attitude and internal state of an individual
regarding a particular job. More specifically, job satisfaction can be explained as
an employee's general attitude towards the job. It is a pleasurable feeling that results
from an employee's perception of achieving the desired level of need or satisfaction.
Job satisfaction fulfills an individual's psychological and physiological needs through
organizational process. It is a multidimensional attitude which is made up of the
attitude towards pay, promotions, co-workers, supervision, the work environment and
so on. High job satisfaction implies that the employees are liking the job, whereas, low
job satisfaction relates to the disliking of the job by individuals

A Business is highly influenced withits customers and hence the customers must be
treated as the centre of the market. All the business variables such as enhancements,
profit, status, image, etc of the organization depends on customers. Under the work
profile of analysing the risk and financial planning, an employee must cater to the
customers and must ensure that they are satisfied with the services provided/offered.
Hence, the Private Wealth Management is to be considered as a matter of concern.

Private Wealth Management is a part of customer’s experience that exposes a

supplier’s behaviour on customer’s expectation. Customer’s perception of the supplier
helps the customer choose among the supplier on basis of money value and how well
the delivered products suit all the desired requirements. The supplier’s servicing role
never diminishes after the delivery, a customer seeks high values post marketing
services which could help them use and customize the delivered product more
efficiently and keep a check over the increased level of satisfaction. If he is satisfied
with the post marketing services then there are good chances for supplier to retain the
customers to enhance repeated purchases and make good business profits.

Also, every firm must have a proper working capital management system. Working
capital management (WCM) is defined as the management of short-term liabilities and
short-term assets. The process is used continuously to operate and generate cash flow
to meet the need for short-term obligations and daily operational expenses.

The primary goal of working capital management is to sufficiently maintain the

operations of a company. WCM focuses on areas such as inventory and managing
accounts receivable/payable. Another method of determining the performance of

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WCM is the use of ratios, such as working capital ratio, inventory ratio, and collection
ratio. These ratios are used in WCM to determine the weaknesses and strengths of an
organization.  Effective working capital management means that business owners will
maintain working capital levels as low as possible while still having an adequate
amount to run the business. At the point of sale, a buyer will look at historical levels to
determine an appropriate amount of non-cash working capital to leave in the business
post acquisition. The vendor will usually be able to remove excess cash from the
business prior to sale. 

If the average non-cash working capital has been maintained at a low level historically,
then buyers will usually ask for a comparable level. The same is true if inefficiently
high levels of working capital have been maintained. On sale, the level of working
capital will have a direct impact on the total cash proceeds that vendors will receive. 

As to multiply income, people are investing their hard earned money into various
schemes, due to which they are exposed to various types of risk. These risks can
include financial loss from investing in the stock market, or of any other sort. A large
unforeseen event has the ability to drain all of our financial resources, ruining the way
of life and undermining our financial plan. Managing risk helps mitigate potential
financial losses and ensures that our way of life can remain unaffected by unavoidable
events.

With less awareness and knowledge about the drawbacks of such investments or not
knowing the right time, or trading tricks, people tend to feel lost. To help them
overcome that feeling, and to assist them while they invest their income, risk analysers
and financial planners come to light. They assess the risks on behalf of the individuals,
they study the patterns of various investment schemes and give out planned results to
the client so they can effectively and rather safely multiply their money.

I took this particular for my study as nowadays the Indian stock market i.e. BSE and
NSE are booming. The stock market is bullish making people interested in investments
as it makes them believe that it could earn them more money. This topic has a lot of
scope and potential and would help us analyze and help judging the pattern of
investments in the growing market.

To know exactly, how and where people invest and analysing risk of each individual is
difficult, so to make it handy, I chose sampling method via questionnaires to judge the
risk associated with the financial investment made by the people. I chose a non
probability sampling method at convenience to understand and prepare the project
report. All the questionnaire responses are completely authentic in nature with zero
level of biasness, i.e they are free from any bias and errors. Each opinion and dialect
has been recorded in order to make the report more illustrative and comprehensive.

9
1.2 Mutual Fund

A Mutual Fund pools the money of people with certain investment goals. The money
invested in various securities depending on the objectives of the mutual fund scheme
and the profits (or loss) are shared among investors’ in proportion to their investment.
Investments in securities are spread across a wide cross-section of industries and
sectors. Diversification reduces the risk because all stocks may not move in the same
direction in the same proportion at the same time. Mutual fund issues units to the
investors’ in accordance with quantum of money invested by them. Investors’ of
mutual funds are known as unit holders. The profits or losses are shared by the
investors’ in proportion to their investment. The mutual funds normally come out with
a number of schemes with different investment objectives which are launched from
time to time. A mutual fund is required to be registered with Securities and Exchange
Board of India (SEBI) which regulates securities markets before it can collect funds
from the public.

A Mutual fund is a trust that pools the savings of a number of investors’ who share a
common financial goal. The money collected from investors’ is invested in capital
market instrument such as shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized are shared by its unit’s
holder in proportion to the number of units owned by them. Thus a Mutual Fund is the
most suitable investment to the common man as it offers an opportunity, to invest in a
diversified, professionally managed basket of securities at relatively low cost.

A mutual is a set up in the form of trust, which has sponsor, trustee, assets
management company (AMC) and custodian. Sponsor is the person who acts alone or
in combination with another body corporate and establishes a mutual fund.

The sponsor is not responsible or liable for any loss or shortfall resulting from the
operation of the schemes beyond the initial contribution made by it towards setting up
of Mutual Fund.

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1.3 Net Asset Value

The net asset value, or NAV, is the current market value of a fund's holdings, usually
expressed as a per-share amount. For most funds, the NAV is determined daily, after
the close of trading on some specified financial exchange, but some funds update their
NAV multiple times during the trading day. Open-end funds sell and redeem their
shares at the NAV, and so process orders only after the NAV are determined. Closed-
end funds (the shares of which are traded by investors’) may trade at a higher or lower
price than their NAV; this is known as a premium or discount, respectively. If a fund is
divided into multiple classes of shares, each class will typically have its own NAV,
reflecting differences in fees and expenses paid by the different classes. The most
important of the calculation is the valuation of the assets owed by the funds. Once it is
calculated, the NAV is simply the net value of assets divided by the number of units
outstanding. The detailed methodology for the calculation of the asset value is given
below. Net Asset value =Sum of market value of shares/debentures + Liquid
assets/cash held (if any) +Dividends/interest accrued-Amount due on unpaid assets
-Expenses accrued but not paid.

1.4 How do mutual funds work in India?

Mutual funds in India work in much the same way as mutual funds in the
United States. Like their American counterparts, Indian mutual funds pool
the investments of many shareholders and invest them in a variety of
securities depending on the goals of the fund. Also like U.S. funds, there
is a wide range of different fund types available for purchase depending
on the needs and risk tolerance of any given investor. Mutual funds are a
popular investment option in India because, like American funds, they
offer automatic diversification, liquidity and professional management.
Regulations
Mutual funds in India are regulated by the Securities and Exchange Board of India
(SEBI). Indian mutual funds are subject to stringent requirements about who is eligible
to start a fund, how the fund is managed and administrated, and how much capital a
fund must have on hand. To start a mutual fund, for example, the fund sponsor must
have been in the financial industry for at least five years and have maintained positive
net worth for the five years immediately preceding registry.

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1.5 Different Types Of Funds
 Money Market Funds
The money market consists of safe (risk-free) short-term debt instruments, mostly
government Treasury bills. This is a safe place to park your money. You won't get
substantial returns, but you won't have to worry about losing your principal. A
typical return is a little more than the amount you would earn in a regular checking
or savings account and a little less than the average certificate of deposit (CD).
 Income Funds
Income funds are named for their purpose: to provide current income on a steady
basis. These funds invest primarily in government and high-quality corporate debt,
holding these bonds until maturity in order to provide interest streams.
 Bond Funds
Bond funds invest and actively trade in various types of bonds. Bond funds are
often actively managed and seek to buy relatively undervalued bonds in order to
sell them at a profit. These mutual funds are likely to pay higher returns than
certificates of deposit and money market investments, but bond funds aren't
without risk. Because there are many different types of bonds, bond funds can vary
dramatically depending on where they invest.
 Balanced Funds
The objective of these funds is to provide a balanced mixture of safety, income and
capital appreciation. The strategy of balanced funds is to invest in a portfolio of
both fixed income and equities. A typical balanced fund will have a weighting of
60% equity and 40% fixed income. The weighting might also be restricted to a
specified maximum or minimum for each asset class, so that if stock values
increase much more than bonds, the portfolio manager will automatically rebalance
the portfolio back to 60/40.
 Equity Funds
Funds that invest primarily in stocks represent the largest category of mutual funds.
Generally, the investment objective of this class of funds is long-term capital
growth. There are, however, many different types of equity funds because there are
many different types of equities. A great way to understand the universe of equity
funds is to use a style box, an example of which is below.
 Global/International Funds
An international fund (or foreign fund) invests only in assets located outside your
home country. Global funds, meanwhile, can invest anywhere around the world,
including within your home country. It's tough to classify these funds as either
riskier or safer than domestic investments, but they have tended to be more volatile
and have unique country and political risks.
 Specialty Funds
This classification of mutual funds is more of an all-encompassing category that
consists of funds that have proved to be popular but don't necessarily belong to the
more rigid categories we've described so far. These types of mutual funds forgo
broad diversification to concentrate on a certain segment of the economy or a
targeted strategy.
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 Index Funds
Index funds are passively managed funds that seek to replicate the performance of
a broad market index such as the S&P 500 or Dow Jones Industrial Average
(DJIA). An investor might consider an index fund if they subscribe to the logic that
most active portfolio manager cannot beat the market on a regular basis. Since an
index fund merely replicates the market return it also benefits investors in the form
of low fees. Index funds have been increasing in popularity since Vanguard
pioneered the way for passive indexing in mutual fund form.
 Exchange Traded Funds (ETFs)
A twist on the mutual fund is the exchange traded fund, or ETF. These ever more
popularinvestment vehicles pool investments and employ strategies consistent with
mutual funds, but they are structured as investment trusts that are traded on stock
exchanges, and have the added benefits of the features of stocks. For example,
ETFs can be bought and sold at any point throughout the trading day. ETFs can
also be sold short or purchased on margin. ETFs also typically carry lower fees
than the equivalent mutual fund.

1.6 What Is a Systematic Investment Plan? How Does It Work?

A Systematic Investment Plan or SIP is a smart and hassle free mode for investing
money in mutual funds. SIP allows you to invest a certain pre-determined amount at a
regular interval (weekly, monthly, quarterly, etc.). A SIP is a planned approach
towards investments and helps you inculcate the habit of saving and building wealth
for the future.
A SIP is a flexible and easy investment plan. Your money is auto-debited from your
bank account and invested into a specific mutual fund scheme. You are allocated
certain number of units based on the ongoing market rate (called NAV or net asset
value) for the day. Every time you invest money, additional units of the scheme are
purchased at the market rate and added to your account. Hence, units are bought at
different rates and investors benefit from Rupee-Cost Averaging and the Power of
Compounding.

1.7 Benefits Of Systematic Investment Plan

a. Disciplined Saving - Discipline is the key to successful investments. When you

invest through SIP, you commit yourself to save regularly. Every investment is a step
towards attaining your financial objectives.
b. Flexibility - While it is advisable to continue SIP investments with a long-term
perspective, there is no compulsion. Investors candiscontinue the plan at any time. One
can also increase/ decrease the amount being invested.
c. Long-Term Gains - Due to rupee-cost averaging and the power of
compounding SIPs have the potential to deliver attractive returns over a long
investment horizon.

13
d. Convenience - SIP is a hassle-free mode of investment. You can issue a standing
instruction to your bank to facilitate auto-debits from your bank account
1.8 Company Profile

About Globe Capital -

 Globe Capital is one of the most admired financial solutions provider in India,
Operating in capital market for more than 20 years
 It works on the simple philosophy that “No matter which direction the wind blows,
Money must grow”
 The company is well respected for maintaining highest ethical standards and
demonstrating sound judgment in executing the responsibility of clients’ money
 Globe Capital accounts for majority of exchange clearing volumes in its F&O
Segment
 Globe Capital Market is one of the leading clearing member in currency and F&O
Segment of all major exchanges in India
 India’s leading Depository Participant with NSDL and CDSL
 Since inception of commodity exchanges in India Globe Commodities has been a
leading player in market.

Globe Capital Market Ltd. Is financial services group committed to help

achieve financial goals. Company’s wide range of services and a
diversified client base is an outcome of expertise in guiding through the
financial markets.

It’s growing network of more than 3000 offices across 400+ locations in
India and overseas offices through a subsidiary in DUBAI. The company
offers diverse services including Equities, Commodities & Currencies
Markets Intermediation, Portfolio Management Schemes (PMS),
Depository Services, Mutual fund and IPO distribution, Qualified
Depository Participant (QDP) services, Securities Lending and Borrowing
Services, Corporate Advisory and International Broking, etc.

14
Company account for a substantial share of NSE clearing volumes in the
Equity and Currency derivative segments and are also India's leading
Depository Participants with NSDL and CDSL.

The main expertise is in serving clients to clients objectives has earned

the trust of reputed names in the finance industry. TRG Advisors India
Private Limited, formally known as Citi Venture Capital Inv (CVCI), a
private equity fund managed by a wholly owned subsidiary of Citigroup
Inc., owns a 20% stake in Globe Capital Market Ltd.

3000+ 400+ 20+

Representative Cities years of
office existence

27 40+ 11
years of Satisfied India
management International & Exchanges
experience Domestic memberships
Institutional

2 Citi Ventures True Indian

International Representatives MNC
Exchanges on Board with subsidiary
memberships in Dubai

15
 Thier Core Values-

 Always Be Client Centric:  Clients' interests always come first. lf we serve our clients
well, our own success will follow.
 Always Be Transparent:Integrity and honesty are at the heart of our business. We
maintain highest ethicalstandards and demonstrate sound judgment in executing the
responsibility.
 Always Be Prudent:We apply wise financial and business strategies. Our clients rely
on our experience,judgment and analysis for their hard earned wealth to grow.
 Always Be Foresighted:Long term relationship with our clients is more important
than short term gains. Alwaysanticipate change and be prepared.

Their Ethos-

 Vision: To be the Finest: To become the leading and the most respected Financial
Solutions Company adhering to our value and be uncompromising on our purpose
 A Mission Undeterred: No matter what the size of our client is,No matter what the
market condition is,No matter what the asset nature is,We will always be driven by the
sole mission for our clients that their “Money Must Grow”

The Group and its Subsidiaries –

16
 Key Business –

 Broking: Trading in Equities & their Derivatives, Commodities and their Derivatives
& Currency pair Derivatives, through online and offline platforms are offered to
Individuals, Corporate, NRIs, HNIs and Institutional Investors.
 Clearing Services:Trusted clearing services in F&O segment in NSE, BSE and MCX.
Commodity segment in MCX, NCDEX, ICEX & DGCX and Currency Derivatives
segment in NSE, MCX-SX, BSE. Globe is one of the largest clearing houses in
country contributing clearing volumes in Equity, Commodities and Currency segments
of various exchanges.
 NBFC:Globe Fincap Limited as a non banking financial company (NBFC) registered
with RBI is a subsidiary of Globe Capital Market Limited; offers loan against shares,
purchase of shares & commodities and various other loans.
 International Services:As a member of DGCX, through our subsidiary, we offer
trading in bullion, metals and currencies.
 Portfolio Management:As a SEBI registered PMS, we offer Discretionary Portfolio
Management services and Non-Discretionary Portfolio Management services
 Research:Comprehensive techno-fundamental research offering detailed company
reports, sector reports, earning previews, management interaction reports, IPO analysis
and daily, weekly and monthly newsletters
 Depository Services :We are trusted by a large number of individuals, corporates and
trading members for availing depository services with NSDL and CDSL. We are
empanelled with MCX and NCDEX for holding commodities Demat accounts.
 Mutual Funds:Distribution of all mutual fund schemes & SIPs of all reputed fund
houses based on sound research to generate positive returns.
 M&A Arbitrage :Globe Capital specializes in dealing with arbitrage events in the
market

17
Business Transformation and Diversification –

Clearing Market Share –

Contributionof 28 %approximately , to the volume of exchanges , today Globe has a

large market share in clearing business and is competing neck to neck with Axis &
ICICI Bank , ILFS & Stock Holding Corporation of India in exchange clearing
Volumes.

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 Client Value Proportion –

 Strong Operational Abilities

 StrongFinancial Performance
 Experienced Top Management
 Financial Prudence
 Strong IT Backbone

Our Associations –

 Capital & Currency Markets : National Stock Exchange (NSE), Bombay Stock
Exchange (BSE), MCX-SX
 Commodity Derivatives :Multi Commodity Exchange (MCX), National Commodities
& Derivatives Exchange (NCDEX), National Multi-Commodity Exchange of India
Limited (NMCE), Indian Commodity Exchange Limited (ICEX), ACE Derivative and
Commodity Exchange(ACE)
 Commodity Spot :NCDEX Spot Exchange (NCDEX Spot)
 Depository:National Securities Depository Limited (NSDL), Central Depository
Services Limited (CDSL), Empanelment with MCX & NCDEX for Commodities
 International :Dubai Gold & Commodity Exchange (DGCX) (Registered with ESCA,
Dubai), Bahrain Financial Exchange (BFX)

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1.5 Industry Profile

India has a diversified financial sector undergoing rapid expansion, both in terms of
strong growth of existing financial services firms and new entities entering the market.
The sector comprises commercial banks, insurance companies, non-banking financial
companies, co-operatives, pension funds, mutual funds and other smaller financial
entities. The banking regulator has allowed new entities such as payments banks to be
created recently thereby adding to the types of entities operating in the sector.
However, the financial sector in India is predominantly a banking sector with
commercial banks accounting for more than 64 per cent of the total assets held by the
financial system.

Mergers and acquisition (M&A) activity in India rose 125 per cent year-on-year to
US$ 32.5 billion across 445 deals during January-September 2016. Domestic M&A
deal value stood at US$ 7.3 billion across 137 deals during July-September 2016,
which is around 65 per cent of the total M&A deal value of US$ 11.3 billion during the
quarter.

Private equity (PE) investments in real estate sector in India have increased 22 per cent
in the first nine months of 2016 to reach Rs 283 billion (US$ 4.24 billion), as
compared to the same period in 2015.

Funds mobilised by Indian companies through non-convertible debentures (NCDs)

increased sixteen-fold to Rs 23,901.4 crore (US$ 3.58 billion) during April-September
2016 led by growing investor appetite.@

The assets under management (AUM) of the mutual fund (MF) industry grew 45 per
cent to Rs 17.89 lakh crore (US$ 268.35 billion) during March 2016 to February
2017.@@ Mutual fund asset base in India increased by Rs 3.71 trillion (US$ 55.65
billion) to reach a total corpus of around Rs 17 trillion (US$ 255 billion) in 2016,
which is the highest growth recorded in the last seven years.

The Indian life insurance industry has begun to recover and is likely to report 12-15
per cent growth in FY 2016-17.! India’s life insurance sector is the biggest in the world
with about 360 million policies, which are expected to increase at a Compounded
Annual Growth Rate (CAGR) of 12-15 per cent over the next five years. The insurance
industry is planning to hike penetration levels to five per cent by 2020, and could top
the US$ 1 trillion mark in the next seven years. The total market size of India's
insurance sector is projected to touch US$ 350-400 billion by 2020.

In 2016, 2.4 million new demat accounts were opened by Indians, the highest number
of account openings since 2008, led by higher number of initial public offerings (IPOs)
and greater interest in mutual fund investments. SBI, the second largest issuer of credit
cards in India, has reported issuance of 115,000 new cards in December 2016, post
demonetisation, taking its total card issuance to 4.75 million.
20
Prime Minister of India, Mr Narendra Modi has stated that the BHIM (Bharat Interface
for Money) mobile application reached the mark of 10 million downloads indicating
the widespread acceptance of the app. India's digital payments industry is expected to
grow by 10 times to reach US$ 500 billion by 2020 and contribute 15 per cent of Gross
Domestic Product (GDP).

21
Chapter –2
“Review of
Literature”

22
 CHAPTER 2 – REVIEW OF LITERATURE

2.1 INTRODUCTION

The review of literature helps to understand the importance, background and present
situation related to the subject selected for the research work. The attempt is made to
take the review of available literature published in the form of books, journals, thesis
and newspapers. The studies have covered the investment practices, investment
attitudes, financial literacy, risk perception, importance of financial planning, planning
practices etc. While browsing through literature, it is observed that many
researchers/scholars have extensively and excellently reviewed the western financial
planning literature. This review of literature is intended to present the existing status of
financial planning. The entire review has been done as below in two different groups.
The literature review is made through various books, articles, national and
international journals, reputed daily newspapers. The literature review mainly focuses
on variety of case studies as well as thoughts of esteemed researches on the issues of
asset management. It also gives the idea about the periodic changes that occur during
the process of financial management. The literature review also focuses the limitations,
problem associated with financial management and future scope in the same. In the
light of this literature review the present study has been planned properly. Studies
related to 1) Portfolio Management and Common traits 2) Studies on underlying
factors determining or influencing investor behaviour.

2.2 STUDIES RELATED TO PORTFOLIO MANAGEMENT

FINANCIAL SOCIALIZATION AND FINANCIAL BEHAVIOR

(Soyeon Shim Æ Bonnie L. Barber Æ Noel A. Card, 2010) , pointed that ―Financial
socialization is a process consisting of four levels that connect anticipatory
socialization during adolescence to young adults‘ current financial learning, to their
financial attitudes, and to their financial behavior. A total of 2,098 first-year college
students (61.9% females) participated in the survey, representing a diverse ethnic
group (32.6% minority 17 participation: Hispanic 14.9%, Asian/ Asian American 9%,
Black 3.4%, Native American 1.8% and other 3.5%). Structural equation modeling
indicated that parents, work, and high school financial education during adolescence
played substantially greater than the role played by work experience and high school
financial education combined. Data also supported the proposed hierarchical financial
socialization four-level model, indicating that early financial socialization is related to
financial learning, which in turn is related to financial attitudes and subsequently to
financial behaviour.

23
SELF RATED EXPERTISE AND FINANCIAL BEHAVIOR

Self-rated expertise is one of the major hurdles before the development of financial
planning profession. An investor never seems to be bothered for asking for a
professional help as he would consult a medico in case of medical problem. (Murphy,
2010) found out that while most respondents feel both that financial planning is
important and that they are interested in developing a financial plan, very few feel that
they have the necessary skills and knowledge to prepare their own plan. ―In addition,
the participants indicated a strong preference for professional personal financial
planning advice. Less than 13 percent have prepared a comprehensive personal
financial plan. When asked to identify the one professional from whom they would
seek advice, certified financial planners were the preferred resource.

RISK PERCEPTION, FINANCIAL PRODUCT AWARENESS AND PORTFOLIO

SELECTION

Risk perception is one of the key factors influencing portfolio selection. In the present
section risk perception and its association is understood. Also the awareness towards
different products among various sections of society has been also described.

The study of Joyce etal (2010) revealed that the level of education influence general
and financial product awareness among youths. Also, males were found to have higher
levels of financial awareness compared to females.

When discussing client behaviour under risky circumstances, it is helpful to distinguish

between "risk perception" and "risk tolerance." Both factors contribute to a decision
when facing risk, and it is helpful to know whether a client is not acting (or acting)
because of (1) misperception of the risk or (2) a reluctance (or eagerness) to make a
risky decision. Risk tolerance is a fairly stable construct which is hardly affected by
any financial crisis, whereas on other hand risk perception is fairly subjective and
changes according to the situation.

(SuyamPraba, 2011)classifies the respondent in various risk categories and objectives

and pattern of investment in different age groups, education and occupation groups.
She reports that respondents whose age group is below 35 years save for wealth
creation and are moderate in risk taking attitude and have invested in insurance.

Among the respondents whose age is between 36 and 54 Years save for Children‘s
education and are conservative in risk taking attitude and have invested in insurance
and pension/provident. Among the respondents whose Age is above 55 Years save to
meet contingency and retirement. They are moderate in risk taking attitude and
majority of them have invested in insurance, bank & gold.(Ibid, 7)

As far as effect of education on investment objective, investment vehicle and risk

taking is considered that respondents who are graduated save for wealth creation are
moderate in risk takers and have invested in insurance Respondents who are Post
Graduated savings objective is wealth creation. They are moderate risk takers and
24
some of them have invested in insurance & bank. School Level educated respondents
save for retirement and to meet contingency. They are conservative risk takers and
have nil knowledge about MF. They have invested in pension/ provident fund. Among
the respondents who are Diploma holders save to meet contingency.100% are
moderate risk takers and most of them have invested in insurance.(Ibid, 8)

Among the respondents whose annual income is below Rs1.00 Lakh save to create
wealth and to meet contingency. They are conservative risk takers and have invested in
insurance. Among the respondents whose annual income is between Rs 1.00 and 2.00
Lakhs save to create wealth and for contingency management. Among the respondents
19 whose annual income is between Rs 2.01 and 3.00 Lakhs, 45% of their savings
objective is to create wealth, 38% are moderate risk takers and 28% are conservative
risk takers. Among the respondent whose annual income is above Rupees 3.00 Lakhs,
41% of their savings objective is to create wealth 41% are moderate risk takers and
41% are conservative risk takers. (Ibid, 9)

Investors‘ major saving objective is wealth maximization, contingency management

and Children welfare. Investors reveal that most of them are unlikely to meet their
financial goals: be it for their retirement or children‘s education. This is because they
don‘t have a proper financial plan. Very few respondents plan their savings well in
advance every month. Mostly investments are made in a random fashion. Sometimes
there would be a goal in mind, but even in those cases there won‘t be any follow up. In
most cases, people don‘t bother to review their investments periodically and make
additional investment if needed to realize their goals.

Most of the respondents invest in Insurance, deposited in Bank and invested in MF.
The most preferred savings avenue is Bank Deposits among all respondents. Insurance
ranks second, mutual fund ranks third preferred investment avenue. The investors‘
behavior is basically influenced by the external factors like psychological and
sociological factors.(Ibid, 9).

FINANCIAL LITERACY

Financial literacy proves to be a major block for investors who do prefer safer avenues
of investment as they lack basic knowledge of financial markets. The financial literacy
has been measured in different terms by various authors.

(Tomas Dvoraka, 2010)designed and administered a financial literacy test tailored to a

specific defined contribution plan and found that participant knowledge is particularly
low among women, low income and low education employees. They also find some
evidence that personal contributions lead to more knowledge.

Prior research indicated workers including many college students were ignorant
regarding their own finances, future wealth, and retirement planning although in their
business courses they learn the importance of managing and maximizing other
peoples‘ wealth.

25
Chen and Volpe (1998) showed than men tend to know more about insurance and
personal loans compared to women who usually are more knowledgeable in financial
areas such as spending and saving, taxes and personal financial planning.

(Lyons, 2005) stated that some of reasons minority groups such as immigrants remain
unbanked and consequently financially illiterate is due to financial constraints (e.g., do
not have enough money, poor credit history), the costs associated with an account are
too high (e.g., high minimum balances, high fees and service charges), and limited
access and availability to financial institutions (e.g., hours or locations are
inconvenient).

Roij (2010) devised two special modules for De Nederlandsche Bank (DNB)
Household Survey to measure financial literacy and study its relationship to stock
market participation. They find that the majority of respondents display basic financial
knowledge and have some grasp of concepts such as interest compounding, inflation,
and the time value of money. However, very few go beyond these basic concepts;
many respondents do not know the difference between bonds and stocks, the
relationship between bond prices and interest rates, and the basics of risk
diversification. Most importantly, they find that financial literacy affects financial
decision-making: Those with low literacy are much less likely to invest in stocks.

Hussein indicates that the financial literacy of UAE investors is far from the needed
level. The financial literacy level is found to be affected by income level, education
level, and workplace activity. High-income respondents hold high educational degrees,
and those who work in the field of finance/banking or investment had as expected a
higher financial literacy level than others. Whereas, financial illiteracy exists
regardless of the age of the respondents a significant difference in the level of financial
literacy was found as well between the respondents according to their gender.
Specifically, women have a lower level of financial literacy than men. Finally, the
results indicate that there is a significant relationship between financial literacy and
investment decisions. The most influencing factor that affects the investment decision
is religious reasons and the least affecting factor is rumours.

In general it can be found that researchers have correlated financial literacy with
gender, race, socioeconomic status, financial inclusion. The present study has helped to
21 understand financial literacy by measuring the investor awareness towards various
sets of financial products and risk perception towards these products in Indian context.

SOURCES OF FINANCIAL INFORMATION

26
There are various sources of financial information disseminating information about
available products in financial markets. The selection of authentic and trusted source of
information may affect investor return on investment. The present section discusses
about various information sources and their usage. (Yang, 2006) Studied factors
associated with the extent of search for saving and investment information using the
2001 Survey of Consumer Finances.

Those households with income in the 2nd quintile were more likely to search for
investment information than those in the bottom quintile. Additionally, it was found
that as age increased, the extent of search decreased. In terms of marital status, couples
and single female-headed households were more likely to search for investment
information than single male household heads. Also that those who were most likely to
engage in extensive search efforts for information on saving and investing were
generally regular savers, typically deal with above average numbers of financial
institutions and have higher levels of risk tolerance.

(Chang, 2005) Asserted that race and age characteristics were influential in
determining the sources of information to which households turn in certain financial
decision-making processes. ―The type of financial advice sought was generally
associated with characteristics such as education, net worth, financial assets and an
overall perception of the value of such advice. Those who used the highest number of
sources for information were those who used paid professionals. Those who use free
information sources such as bankers were also more likely to consult financial
literature and the Internet .As once income rose above the $75,000 threshold the
differences in the likelihood of using an investment advisor vs. any other source of
financial information became statistically significant Households making more than
$75,000 were more likely than their lower income counterparts to use a financial
advisor for savings and investment decisions.

Chang (2005) found that the use of a paid professional increased with education, liquid
assets, age, race (Black), and the financial risk tolerance of the individual. Chang
(2005) found that as overall wealth increased the likelihood of using more than one
financial advisor increased while the likelihood of using someone within the
respondents‘ ―network‖ decreased.

SEBI – NCAER SURVEY (2000) was carried out to estimate the number of
households, the population of individual investors, their economic and demographic
profile, portfolio size, and investment preference for equity as well as other savings
instruments. This is a unique and comprehensive study of Indian Investors, for; data
was collected from 3, 00,000 geographically dispersed rural and urban
households.Some of the relevant findings of the study are: Households preference for
instruments that match their risk perception; Bank Deposit has an appeal across all
income class; 43%of the non-investor households equivalent to around 60 million
households estimated) apparently lack awareness about stock markets; and, compared
with low income groups, the higher income groups have higher share of investments in

27
Mutual Funds (MFs) signifying that MFs have still not become truly the investment
vehicle for small investors.

IIMS Data works (2007) conducted Invest India Income and Savings Survey among
321 million paid up workers between the ages of 18 and 59. This survey provides 360
degree view of the financial behavior and future investment intentions of the Indian
workforce. Findings were there is a significant correlation between educational levels
and financial behavior, except in the case of bank accounts and deposits, which seem
popular across people of varying educational backgrounds.

SAVINGS

Most studies of financial planning and investing have used demographic indicators
(e.g., age, gender, income) to predict individual differences in saving.

A MAX NEW YORK LIFE – NCAER STUDY (2008) How India Earns, Spends and
Saves India saves but does not invest. India saves for long-term goals such as
emergencies, education and old age, but does not invest in long-term instruments.
Indian 23 households have a strong saving habit. While income level is an important
factor in influencing the saving patterns of households, variations in savings behavior
are equally decided by education level and occupation.

FINANCIAL EDUCATION AND FINANCIAL BEHAVIOR

Financial literacy denotes one‘s understanding and knowledge of financial concepts

and is crucial to effective consumer financial decision making. Programs that educate
to improve financial literacy ―provide individuals with the knowledge, aptitude and
skills base necessaryto become questioning and informed consumers of financial
services and manage their finances effectively‖ (Mason & Wilson, 2000, p. 5).
Financial education can include any program that addresses the knowledge, attitudes,
and/or behavior of an individual toward financial topics and concepts.

PRO SOCIAL MUTUAL FUND INVESTMENT BEHAVIOR

Moreover, there was proof of a non-altruistic motive for investing in SRI as consumers
who perceive that financial return of SRI is equal or better than ‗‗regular‘‘ mutual
funds, invested a greater proportion of their portfolio in SRI profiled mutual funds.
Furthermore, the results showed that women and better-educated investors were more
likely to invest a greater proportion of their investment portfolio in SRI. Overall, the
findings indicate that both financial perceptions and pro-social attitudes are connected
to consumer investment in SRI. (Nilson, 2004)

TRANSACTION PREFERENCES

28
The interviews confirmed the high importance of self-determination, reflected in the
majority of the individuals (57%) preferring self-directed information collection and
decision-making. The increased importance of friends and family and associated
changes in the sociological structures of households can be perceived in the
willingness of more than half of all individuals (53%) to take financial decisions
together with their partner.

INHERITANCE OF MONEY RETENTION ATTITUDE

Positive health ratings, strong affection for the adult child, and money retention
attitudes were associated with frequent emotional support. Small household size
predicted frequent financial transfers. Results indicate the importance of values,
resources, demands, and relationships in predicting resource transfers from older
parent to adult child. (Ceilia Ray Hayhoe, 2007).

PERCEPTION OF FINANCIAL WELL BEING

Women in non traditional families (single mothers, cohabiters, and stepfamilies) had
significantly greater worries about their financial futures than women in first
marriages. Single mothers were less likely to say that they had their financial house in
order and were more likely to express concern that their money would not last through
retirement. Cohabiting women were significantly more likely to express fears about
becoming a burden. All three groups were more likely than women in first marriages
to agree that long-term care insurance is a necessity. Women, who were older, were
more educated had higher income, and who contributed more money to the household
income had more positive perceptions of their financial situation. (Jan Wilson, 2010).

PSYCHOLOGICAL FACTORS AND FINANCIAL BEHAVIOR

Little is known about the psychological mechanisms that underlie financial planning
for retirement. Most studies of financial planning and investing have used
demographic indicators (e.g., age, gender, income) to predict individual differences in
saving. In the present study, a model of planning is tested in which psychological
indicators (future time perspective, retirement goal clarity, and self-rated financial
knowledge) are posited to mediate the relationship between demographic indicators
and saving behaviours. Path analytic techniques were used to test the model, based on
data from 265 middle-aged working adults. Analyses revealed substantial support for
the role of psychological factors in the retirement planning process. Findings have
theoretical implications for the development of psychologically based models of
planning, as well as applied 25 implications for those who seek to understand the
psycho motivational forces that underlie tendencies to plan and save. (Douglas, 2007)

FINANCIAL EDUCATION AND BEHAVIOR

29
Financial education with regard to old-age provision can be successful if it reaches
consumers in their environment at life-stages where important decisions need to be
made. To achieve that considerable efforts have to be taken in terms of funding and
organizational set-up. However, evaluation is necessary to prove the effectiveness of
the education especially for vulnerable consumer groups. If evaluation reveals that
these groups cannot be targeted effectively or that consumers are not taking action
subsequently to attending financial education, there might be a case for changing
behavior through the institutional set-up of pension schemes (i.e., through automatic
enrolment) and using financial education as a supportive policy instrument. (Andreas
Oehler, 2008)

BARGAINING THEORY AND FINANCIAL BEHAVIOR

Traditional models assume that household decisions are made based on pooled
resources and common preferences. In contrast, bargaining models hypothesize that
household decisions depend on the relative bargaining power of spouses. According to
bargaining models, if women are more risk averse, then households should exhibit less
financial risk taking as the bargaining power of the wife increases. Results of an
analysis of household financial risk taking in a sample of dual-earner, married
households from the 2004 Survey of Consumer Finances are more Consistent with
decision making based on pooled resources rather than on the relative bargaining
power of spouses.(nancy Ammon Jianakolopose, 2008) .

Researchers and practitioners have suggested that demographic, socioeconomic, and

attitudinal factors can be used to differentiate individuals into risk-tolerance for risk
taking categories. While there are research data to support these beliefs, there is a need
to examine these assumed? relationships in more detail ( (Botwinick, 1984).

(Carducci, 1998) reported the findings from a study that attempted to identify
personality factors that determine financial risk taking in everyday money matters.
Carducci and Wong concluded that persons fitting the Type A personality trait tended
to take greater risks than those more closely aligned with the Type B personality
profile. They suggested that socioeconomic factors, such as income, might have played
a part in explaining their findings. Specifically, it was determined that persons
identified as Type A personalities were likely to maximize their achievements through
additional risk taking in the attainment of increased incomes, higher status
occupations, and increased educational attainment. (Grable J E, 1997)suggests that the
investigation of factors that determine financial risk taking and risk tolerance can be
expanded beyond the testing of purely psychological factors. Specifically,
demographic, socioeconomic, and attitudinal characteristics need to be examined to
determine how these factors influence a person's willingness to take financial risks in
"everyday money matters."

GENDER DIFFERENCES IN INVESTMENT BEHAVIOR

30
In general, women invest less money and invest their money in less risky investments
compared to men. Some explanations for this behavior include lower earnings, lower
financial knowledge, lower comfort levels with math, or smaller retirement benefits
(Anonoymous, 1998). Women may also differ from men in their access to information,
as well as the ability or inclination to use available information Although women have
become more interested in, and better informed about, investments the NASD Investor
Literacy Research stresses that women still miss basic market knowledge have lower
levels of math comfort ( (Hayes, 1998) prefer traditional print media to software or the
Internet to gather financial information and favor stable, easy-to-manage investments..
The self-serving attribution bias is greater among men than among women, with men
tending to emphasize their successes rather than their investment failures Men are also
more likely to spend more time and money on security analysis. Men make more
transactions, rely less on their brokers, anticipate higher possible returns, and believe
that returns are more highly predictable than women Both men and women expect
their own 27 portfolios to outperform the market, but men expect to outperform by a
greater margin than do women (Barber, 2001).

ACQUISITION AND ASSIMILATION OF FINANCIAL KNOWLEDGE TO

INFLUENCE FINANCIAL BEHAVIOR

First, it does appear that all socialization agents play an important role to a certain
degree in aiding these Hispanic Americans in learning and developing financial skills
throughout their life. The results also show that these financial skills are cognitively
developed and socially learned as individuals engage in the socialization process
throughout their different life-cycle stages Almost all informants mentioned that they
learned and developed their financial behaviours from their parents. However, fathers
and mothers seemed to influence children‘s financial perspectives differently. That is,
those who live with both parents tended to learn financial skills from their father. The
father plays an important role related to knowledge of financial portfolios (e.g., stocks,
bonds, and CDs). Interestingly, the role of religion and the Catholic ideology seems to
have an impact on how these informants learn and cope with their financial situations.
However, the Catholic ideology seems to have a limited influence on their financial
behaviours, as only one informant mentioned Catholicism specifically. Although some
of the informants mentioned that they are very religious, the role of the religious seems
almost insignificant in influencing their financial management. Peer influence is also
somewhat significant among these informants with respect to the acquisition and
development of their financial knowledge. These informants tend to have their own
perspectives related to financial management, even though some of them accept that
their peers have influenced their finances. In addition, the results of the current study
are somewhat in line with Singh et al.‘s (2003) study, suggesting that these informants
were likely to learn how to manage their finances through media such as TV and the
Internet. Related to the second research question, it is interesting to note that while
most of these informants mentioned that having ―good‖ values (such as being driven
by goals, working hard, having a sense of integrity, and being a rational spender) could

31
contribute to healthy finances, possessing ―bad‖ values such as materialism and
vanity could, in turn, contribute to unhealthy finances. Such values are directly or
indirectly learned and are acquired through 28 interactions with socialization agents
(Bush, Smith, & Martin, 1999), which in turn have proved to guide and influence their
financial behaviours (Shim, Warrington, &Goldsberry, 1999). Interestingly, while
these informants tend to acquire ―good‖ values in managing healthy finances from
their family, they tend to acquire ―bad‖ values from outside their family (e.g., peers,
media).

It is also interesting to note that those with business majors are likely to be more
knowledgeable about their financial skills as compared to those with other majors, i.e.,
art, sociology, and music business majors were also willing to learn about financial
portfolios (e.g., investments in stocks and bonds) either through taking classes,
researching online, or learning from acquaintances. (KittichaiWatchravesringkan,
2008)

RISK TOLERANCE AND PORTFOLIO CONFIGURATION

(James E. Corter, 2006) Investigated a new instrument designed to assess investment

risk tolerance, the Risk Tolerance Questionnaire (RTQ). RTQ scores were positively
correlated with scores on two other investment risk measures, but were not correlated
with a measure of sensation-seeking (Zuckerman, 1994), suggesting that investment
risk tolerance is not explainable by a general cross-domain appetite for risk.
Importantly, RTQ scores were positively correlated with the riskiness of respondents‘
actual investment portfolios, meaning that investors with high risk-tolerance score tend
to have higher-risk portfolios. Finally, respondents with relatively more investment
experience had more risk-tolerant responses and higher-risk portfolios than less
experienced investors.

The consumer's decision to accumulate financial wealth is made in an environment in

which predatory risks are significant. The threat of redistributive actions such as
taxation and transfers, regulation and price controls, litigation, divorce, crimes of all
sorts exposes household savings to risks. The household decision-maker is influenced
at two junctures: in the decision to save, saving rates may be reduced by shorter
horizons and more uncertainty and in the choice of portfolio, where predatory risks
reduce the attractiveness of financial assets in favor of real assets such as housing,
consumer durables, equity or human capital. Financial assets are among the most
vulnerable of assets. In the short term, the interest rate on financial assets relative to
expected returns on other assets is the single most important determinant of portfolio
choices. Other than relative returns, passive factors which automatically cause
portfolio changes as a result of changes in asset valuations are probably far more
important than active portfolio reallocations. However, interstate differences in the F/K
ratio are more likely to be due to long-term, structural economic factors and household
preferences. Again in this decision, age is important, since older persons may tend to
liquidate their equity and real property holdings leaving them only with financial

32
assets. Other factors relate to the nature of the choices offered by the capital markets:
the price of houses, the extent of development of the financial markets. More
economically advanced communities and rich and more sophisticated households
within them have more equity investments but relatively less assets tied up in housing,
leaving only middle income groups with large holdings of financial assets. Finally,
household preferences are important, since conservatism in economic affairs may lead
to less borrowing to finance equity and real assets and more investment in financial
saving. (COURBOIS, 1991).

(Anil Deolalikar, 1998)examined the impact of the birth of a boy relative to the birth of
a girl (i. e., the ―gender shock‖) on the savings, consumption and income of rural
Indian households. They find that the gender shock reduces savings for medium and
large farm households, although there is no evidence that the shock affects savings for
the landless and the small farm households. They also estimate the effect of the shock
on income and consumption for the former group in order to determine the source of
the drop in savings. The results indicate that the fall in savings subsequent to the
gender shock arises from its effect on consumption in the year following the birth, and
from its effect on income in other years.

Everyone has to manage his or her personal finance in one way or another. Some tend
to save a lot, some like to collect information before each purchase, some like to
follow their gut feelings. Private investors are not a homogeneous group but rather
individuals with various financial practices combined with different levels of
experience, anxiety and interest in financial matters (Gunnarsson, 1997).

The heterogeneous market is divided into smaller more homogeneous groups to meet
specific needs with a corresponding business model (Jenkins and McDonald, 1997).
Market segmentation relies, in the financial industry, largely on socio-demographic
information to define segments for specific services (Harrison, 2000).

(Brigitte Funfgeld, 2009)expose five underlying dimensions: anxiety, interests in

financial issues, decision styles, need for precautionary savings, and spending
tendency. They demonstrate that our respondents can, based on these dimensions, be
classified into five distinct groups by cluster analysis where from cluster I to V, the
need for action for a better handling of financial matters increases: for example, the
―Gut-feeling followers‖ show a intuitive way of decision taking, disinterest in
financial subjects and a lack of awareness for the need of provision which make it
difficult to argue for or to initiate remedial action. Each cluster raises key issues in
meeting their needs and allows for guidance to design and adapt instruments to assist
in specific financial requirements. Linear regression further reveals that the clusters
highlight socio-demographic characteristics and help generate a better understanding,
although one socio-demographic factor alone does not offer enough information to
detect cluster membership we segment the investors based on the revealed dimensions
in attitudes (e.g., level of anxiety), together with the self-stated finance-related
behavioral pattern (e.g., spending tendency). They further demonstrate that by

33
segmenting private investors on the basis of their self stated financial attitudes and
behavior, a yield of clearly interpretable profiles can be realized. Cluster analyses,
based on the results of factor analysis, indicate that private investors can be divided
into five clusters with specific characteristics in their financial day-to-day behavior and
certain related socio-demographic variables (e.g., gender, age, and education). Each
cluster raises key issues in meeting its needs and the use of adequate financial
instruments. From cluster I to V, the need for action to improve the handling of
financial matters increases. Socio-demographic variables show patterns of distribution
in the clusters, e.g. men are found more in the rational cluster, less in the more
irrational ones. In contrast, women are found to fall more into both extremes.

(Hussein A. Hassan Al-Tamimi, 2009)indicate that the financial literacy of UAE

investors is far from the needed level. The financial literacy level is found to be
affected by income level, education level, and workplace activity. High-income
respondents hold high educational degrees, and those who work in the field of
finance/banking or investment had as expected a higher financial literacy level than
others. Whereas, financial illiteracy exists regardless of the age of the respondents, a
significant difference in the level of financial literacy was found as well between the
respondents according to their gender. Specifically, women have a lower level of
financial literacy than men. Finally, the results indicate that there is a significant
relationship between financial literacy and investment decisions. The most influencing
factor that affects the investment decision is religious reasons and the least affecting
factor is rumors.

(Chen, 1998)examined the personal financial literacy of 924 college students from 13
campuses located in the USA. In addition, they investigated the relationship between
the financial literacy level and gender, age, nationality, race, income, work experience,
academicdiscipline and class rank. The results of the study indicated that subgroups of
academic discipline, class rank, and years of work experience were significantly
different in terms of financial literacy level. Non-business majors, students in the lower
class ranks, and those with little work experience had lower levels of financial literacy.
In addition, women were far less literate than men, and foreign students were less
knowledgeable than the US citizens.

(Volpe, 2002)argued that online investors should have more knowledge than normal
investors to succeed in the securities markets, because they are more likely to be
surrounded by financial misinformation and manipulation. The authors demonstrated
that the level of financial literacy varied with people‘s education, experience, age,
income, and gender.

Particularly, women had much lower financial literacy than men and older participants
performed better than younger participants. As well, online traders had higher
knowledge than others. Moreover, investors with higher income had more knowledge
in investment 32 than those with lower income, and investors with college or higher
degree performed better than those with low education.

34
Mirshekary and Saudagaran (2005) assessed how different users of financial
statements use the information items disclosed in the annual reports, as well as the
importance of different sources of information in making investment decisions. In
general, respondents ranked the annual reports as the main influential source of
information. The second most influential source of information was oral information
and the third was published daily share price.

On the other hand, the respondents ranked the least influential factors in sequence of
importance: advice of friends and acquaintances, tips and rumors, and stockbrokers‘
advice.

(Mirshekary, 2005)concluded that the annual reports are used regularly in Iran as a
basis for making investment decisions.

(ACNielsen Research, 2005)conducted a national survey of adult financial literacy in

Australia. The main results of this survey indicated that the lowest levels of financial
literacy were associated with people who have lower education, unemployed or
unskilled workers, and people with low income, single people, and those at both
extremes of the age profile. On the other hand, the 2005 results showed an overall
improvement in the financial literacy of Australians.

The first research on the financial literacy level of the Singapore population was
carried out in 2005 by the Money SENSE Financial Education Steering Committee,
established by the government. The survey measured whether Singaporeans are
knowledgeable about common financial products and services and whether they have
been making effective decisions in managing their finances. The research revealed that
Singaporeans have a healthy attitude toward basic money management, financial
planning, and investment matters. Most Singaporeans save, monitor their spending,
and have done some basic financial planning. (Singapore, 2005)

(Volpe R. a., 2006)surveyed 212 benefit administrators in charge of personal finance

programs in the US-based companies in order to specify important personal finance
issues for working adults and assess their level of knowledge. The results revealed that
the least important areas were estate planning and investment.

Specifically, the least important topics were having knowledge of mutual fund
prospectuses, mutual fund fees, and expense ratios. The participants also indicated that
working adults were actually least knowledgeable about the same topics that they
viewed as least important. In general, the benefit administrators indicated that the level
of knowledge of working adults was relatively low.

(Al-Tamimi, 2006)investigated the most and least influencing factors on the UAE
investor‘s behavior by surveying 343 individual investor. The most influencing factors
were, in order of importance: corporate earnings get rich quickly, stock marketability,
past performance of the firm‘s stock, government holdings, and the creation of the
organized financial markets. In addition, two factors had unexpectedly the least

35
influence, namely religious reasons and family member opinions. However, the author
did not consider the relationship between financial literacy and investment decision,
which will be dealt with in the current study.

(Maditinos, 2007) examined the techniques and methods used by six different groups
of Greek investors: official members of the Athens Stock Exchange, mutual fund
management companies, portfolio investment companies, listed companies, brokers,
and individual investors. The results revealed that on average the participants ranked
their instinct/experience as the most important factor followed by fundamental analysis
and the movement of foreign financial markets. Noise in the market and portfolio
analysis was considered the least important.

Five sets of general conclusions emerge from this literature review. The first refers to
the low level of financial literacy regardless of the stage of economic development of
the country.

The second refers to the relationship between financial literacy and demographic
variables. The researchers discovered a strong relation between financial literacy level
and gender, education, income level, and experience. There is evidence provided by 34
researchers those women are less literate than men in financial matters.

Besides, that, less educated individuals and those at the lower end of the income
distribution are less literate about financial matters. The third refers to the relation
between the financial literacy level and investment decisions. It has been proven that
highly literate investors prefer and use different criteria when making an investment
decision than low-literacy investors. Highly literate investors prefer to use financial
publications, whereas low-literacy investors relay more on advice from family, friends,
and stockbrokers. The fourth refers to the relationship between the factors that
determine the investment decision and the investor type, portfolio size, and investment
strategy. Individual investors rely on advice from friends, stockbrokers, rumors, their
instinct/experience, and newspapers/media.

INVESTOR REACTION TO CORPORATE ANNOUNCEMENTS AND

INVESTMENTS

Two conflicting behavioural models, under reaction and overreaction, have been
proposed to explain long-run abnormal returns following a variety of corporate events.
We test hypotheses that distinguish between these two models. We find that across
four different corporate events, long-run abnormal returns exhibit a pattern that is most
consistent with investor under reaction to short-term information available prior to the
event and to the information conveyed by the event itself. The pattern in long-run
abnormal returns is inconsistent with the overreaction model as well as with a model
that postulates investor under reaction to short-term information and overreaction to
long-term trends. (P Raghvendru Rau, 2004)

AUDITED FINANCIAL STATEMENTS AND RETAIL INVESTMENTS

36
(Hodge, 2003)suggest that the SEC's concerns are valid: Perceived earnings quality for
all publicly traded firms has declined over time, as has perceived auditor independence
and the perceived reliability of audited financial information. In contrast, the perceived
relevance of audited financial information has increased. In addition, results reveal that
lower perceptions of earnings quality are associated with greater reliance on a firm's
audited financial statements and fundamental analysis of those statements when
making 35 investment decisions. This result suggests either (1) lower perceptions of
earnings quality lead investors to examine more thoroughly a firm's audited financial
statements, or (2) more thorough analysis of a firm's financial statements leads
investors to lower their assessments of the firm's earnings quality.

(Shanthikumar, 2003)tried to answer the question: Are small investor naïve? They
found that large investors generate abnormal volumes of buyer-initiated trades after a
positive recommendation only if the analyst is unaffiliated. Small traders exert
abnormal buy pressure after all positive recommendations, including those of affiliated
analysts.

(Krishnan, 2002)analyzed the factors influencing the decisions of investor who use
analysts‘ recommendations to arrive at a short-term decision to hold or to sell a stock.
The results indicate that a strong form of the analyst summary recommendation report,
i.e., one with additional information supporting the analysts‘ position further, reduces
the disposition error for gains and also reduces the disposition error for losses

(Epstein, (1994))examined the demand for social information by individual investors.

The results indicate the usefulness of annual reports to corporate shareholders. The
results also indicate a strong demand for information about product safety and quality,
and about the company's environmental activities. Furthermore, a majority of the
shareholders surveyed also want the company to report on corporate ethics, employee
relations and community involvement.

(De Bondt, 1985)published a paper about behavioral finance in which they asked the
following question: ―Does the stock market overreact? The article gave evidence to
support the hypothesis that cognitive bias (investor overreaction to a long series of bad
news could produce predictable mispricing of stocks traded on the NYSE.

Individual investments behavior is concerned with choices about purchases of small

amounts of securities for his or her own account. Investment decisions are often
supported by decision tools. It is assumed that information structure and the factors in
the market systematically influence individuals‘ investment decisions as well as
market outcomes. The researcher confirmed that there seems to be a certain degree of
correlation between the factors that behavioral finance theory and previous empirical
evidence 36 identify as the for the average equity investor. The researcher found out
that the most important factors that influence individual investment decisions were:
reputation of the firm, firm‘s status in industry, expected corporate earnings, profit and
condition of statement, past performance firms stock, price per share, feeling on the
economy and expected divided by investors. (Ambrose Jagongo, 2014).
37
Expected utility theory views individual investment decision as a trade-off between
immediate consumption and future one. Individuals maximize their utility based on
classic wealth criteria making a choice between consumption and investment though
time. Individuals do not always follow the classical theory of economics. Recent
theories of Investment behavior show that investors do not behave rationally, rather
several factors influences the investment decision. The study is based on the responses
of equity investors selected by convenience sampling method in the cities of Vadodara
and Ahmadabad. This study considers the theory of irrationality and of individual
investors and investigates the factors that influence the Investment Behavior for Equity
investment. Various statistical tools were used for data analysis purpose. The analysis
showed that the investors are very conscious about their investment. The stagnant
mode of share market in current time period affected a lot to the investment decisions
of individual investors. (Jariwala Harsha, 2012)

(Mittal, 2008)explored the relationship between various demographic factors and the
investment personality exhibited by the investors. Empirical evidence suggested that
factors such as income, education and marital status affect an individual‘s investment
decision. Further the results revealed that investors in India can be classified into four
dominant investment personalities namely casual, technical, and informed and
cautions.

(Akintoye, 2006) identified profitability, risk, liquidity, dividends, returns, monetary

and physical policies, industry factors and management and staff composition as the
factors considered by individual GFJMR Vol. 5 July-December, 2012 9 investors
when buying shares.

From the mean score of the statements, it was concluded that the most influencing
variable from the customers‘ point of view is ―Market capitalization of company
followed by ―Past performance of the company‖. Whereas, the least influencing
variable is ―Conversation of views with professional colleagues‖ followed by
―Fluctuations in the indices of the major markets‖. The value of Cronbach‘s alpha of
0.921 is acceptable and desirable confirming that the scale is reliable enough to be
used. From KMO and Bartlet test it was also found that the factor analysis is
appropriate for the data. Through factor analysis, eight factors were extracted from 36
statements used for the study. Total 67.513% of variance can be explained by these
extracted factors. These factors are

1) Firm image,

2) Personal financial position

3) Advocate recommendation,

4) Track Record,

5) Relevance to the community,

38
6) Neutral information,

7) Economic Factors, and

8) Individual dynamics.

It was also concluded that educational qualification is an important aspect that

influence the investment decision

The main findings of the above studies can be summarized as follows:

1. There is no support for the overreaction hypothesis.

2. Investor over-reaction to a long series of bad news could produce predictable

mispricing of stocks

3. Classical wealth – maximimization criteria are important to investors.

4. The recommendations of brokerage house, individual stock brokers, family

members and co-workers go largely unheeded

5. A strong demand for information about product safety and quality, and about the
company's environmental activities

6. There exist strong forms of the analyst summary recommendation report, i.e., one
with additional information supporting the analysts‘ position further, reduces the
disposition error for gains and also reduces the disposition error for losses. (Al-
Tamimi, 2006). The present study shall help to identify and highlight various factors
influencing retail investor decision to trade or invest in equity market further
sustaining earlier research in 38 this field especially in the Indian context. Further it
shall also rank these factors according to their relative importance and further identify
the influence on these variables. Moreover the identification, ranking and investigating
these factors in the context of socio demographic attributes shall help the competent
authorities to design and deliver various tools for ensuring enhanced retail
participation in equity markets.

39
Chapter - 3
“Research
Methodology”

CHAPTER 3 – RESEARCH METHODOLOGY

40
 Before defining “Research Methodology”, let us determine “Research”,

 Research always starts with a question or a problem.

 Its purpose is to find answers to questions through the application of the scientific
method.
 It is a systematic and intensive study directed towards a more complete knowledge of
the subject studied.

Research is divided into two broad categories:

a) Basic research: Known as ‘Fundamental Research’. This research addresses itself to

more fundamental questions and not to the problems with immediate commercial
potential.
b) Applied research: known as ‘Decisional Research’. This research proceeds with a
certain problem and it provides solution and outcome of each alternative.
It is further divided into two categories:
 Problem solving research: it is concerned with a particular issue or a problem and is
usually proprietary in character. It is undertaken by a firm or an outside consultant on
its behalf.
 Problem oriented research: it is concerned with a class of issues or problems in which
several other firms may be interested.

41
 Research Methodology is the systematic, theoretical analysis of the methods applied
to a field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge. Typically, it encompasses concepts
such as paradigm, theoretical model, phases and quantitative or qualitative techniques.

A methodology does not set out to provide solutions - it is, therefore, not the same as a
method. Instead, a methodology offers the theoretical underpinning for understanding
which method, set of methods, or best practices can be applied to specific case, for
example, to calculate a specific result.

It has been defined also as follows:

 "the analysis of the principles of methods, rules, and postulates employed by a

discipline";

 "the systematic study of methods that are, can be, or have been applied within a
discipline";

 "the study or description of methods".

For research to be carried forward, a method is to be taken into account. This project
report is of exploratory kind. Thus, method of sampling is selected. To be more
specific, convenience sampling is selected for ease in data collection.
Before we understand what sampling is, first we need to understand what sample is.

A sample is a portion of population. It is a subset of a statistical population whose

characteristics are studied to know the information about the whole population. When
dealing with the people, it can be defined as the set of respondents selected from the
population for the purpose of the study.

Sampling is a process used in statistical analysis in which a predetermined number of

observations are taken from a larger population. The methodology used to sample from
a larger population depends on the type of analysis being performed, but may
include simple random sampling or systematic sampling.

42
 Probability sampling: A sampling procedure in which each element of the population
has a fixed probabilistic chance of being selected for the sample.
Various types of probability sampling techniques are Simple random sampling, cluster
sampling etc..
 Non probability sampling: sampling techniques that do not use chance selection
procedures. Rather, they rely on the personal judgment of the researcher.
Various types of non probability sampling techniques are snowball, judgmental etc.

One such non probability sampling method is Convenience Sampling. Convenience

sampling attempts to obtain a sample of convenient elements. The selection of
sampling units is left primarily to the interviewer. Often, respondents are selected
because they happen to be at the right place at the right time. It is the least expensive
and least time consuming method of all sampling techniques. The sampling units are
accessible, easy to measure and cooperative.
Examples of the convenience sampling can be “people on the street” interviews, tear-
out questionnaires included in a magazine etc.

The next big question is what is data that is collected through these samples?

Data is defined as the raw facts and figures collected from various sources, which can
be expressed in a quantitative form, for a specific purpose. When the data is processed
and organized in order to draw a meaningful conclusion, then it is known as
information.

Data can be collected basically from two sources:

43
1) Primary sources
2) Secondary sources

Secondary data is the data that has already been collected by some other agency and
which has already been processed. For example population census data collected by
government when further used for research purposes etc.

Primary data is the first hand data or the original data which are collected for the first
time for a specific purpose. Such data are published by authorities who are themselves
responsible for their collection. There are several methods for collecting primary data
such as observation method, interviews and questionnaires and schedules.

Questionnaire method: it is one of the most popular and common method for collecting
primary data. It comprises of a list of questions arranged in a sequence pertaining to
the investigation. Under this method, questionnaires are generally sent personally or by
post to various informants with a request to answer the questions and return the
questionnaire. After receiving the questionnaires the informants read the questions and
record their responses in the space meant for the purpose on the questionnaire.

Merits :

 This method can be used in case where informants are spread over a vast geographical
area.
 Respondents can take their own time to answer their questions. So the researcher can
obtain data by this method.
 This is a cheap method because its mailing cost is less than the cost of personal visits.
 This method is free from bias of the investigator as the information is given by the
respondents themselves.
 Large samples can be covered and thus the results can be more reliable and
dependable.

44
 Thus, to conclude, my project report is based on primary data collected through non-
probability method of sampling, on convenience basis. The following information
regards my project-

 For fulfilling the aim of the research, I firstly understood the meaning of various
concepts such as risk perception, financial planning etc..
 Then a questionnaire was designed in order to evaluate the risk perception of people so
that their risk profile can be maintained and suitable products can be suggested to them
for their financial planning.
 This questionnaire was further given to respondents in order to gain authentic
information.
The respondents taken into consideration were chosen on the basis of convenience
sampling the individuals from the office premises and from the neighbourhood.
 The sample size was taken was 50.
 The data collected was then sorted, edited, tabulated, analysed and interpreted.
 A report was finally generated and the result delivered .

# Objectives of the Study

a) To analyse the risk perception of various individuals,
b) To categorize investors into various risk slabs,
c) To offer/provide tailor made investment alternatives that suits individual needs.

# Scope of Study

 Risk Management and Insurance Planning

 Investment and Planning Issues

 Retirement Planning

 Education Planning for kids and the family members

 Cash Flow and Liability Management

 Planning to ensure financial independence at retirement

 Managing cash flow risks through ideal risk management techniques

 Planning for the reduction of tax liabilities and the freeing-up of cash flows for
other purposes

 Planning for the creation, accumulation, conservation and distribution of assets

45
 Moving beyond pure product selling to understand and service the core needs
of the client

 Planning, creating and managing capital accumulation to generate future capital

and cash flows for reinvestment and spending

The above mentioned objectives were fulfilled by using authentic primary sources of
data collection i.e. questionnaires (with a sample size of 50), and compiling investor’s
data of the current scenario and for future references and planning.
The period of the study lasted for about eight weeks under the finance department of
Globe Capital Market Limited.

46
 Chapter– 4
“Data
Analysis”

47
 Data Analysis

 Savings

- According to the survey conducted about 67% of the people saved only
0-20% of their earnings. It shows a very low savings induced culture in
the society.

 Investment

- The above graph depicts that about the half of the population only
invested 0-10% of their income.

48
 Investment Monitoring

- According to the survey conducted about half of the population

monitored their investments very occasionally, signaling a huge sector for
private wealth managers.

 Investment Period

- About 46% of the investors concerned kept their investments for a period
of 1-5 years.

49
Client Acquisition And Private Wealth Management

After conducting the survey, I went on a field trip and analyzed the
investment habits and past investments of the potential clients. After
analyzing the past investment and risk appetite, I developed a
comprehensive financial plan for the concerned client.

Out of the various schemes I scrutinized for the purpose of investment

planning , the following schemes gave good return over long periods :-

1.

50
2.

3.
DATA INTERPRETATION

This chapter is the most important part of the study, wherein the required established
theoretical concepts/tools/techniques are applied to the data presented in Chapter-IV
and inferences are drawn

It can be inferred from the study that we can come to certain conclusions about the risk
perception of individuals, The study conducted and the data analyzed and interpreted
gives certain outputs which cover the areas of analyzing the risk perception for
offering the ideal financial product to the individuals. The data reveals that there are a
large variety of opinions among the investors The data also provides us with
information that helps us to come to various conclusions and interpretations some of
them include that all the individuals studied here prefer wealth creation but keeping a
nominal value of risk. This data hence provides that there are many different
individuals with different levels of risk perception but ultimately they want wealth
creation in forms of expected returns.

51
The data shows the various factors that influence the risk perceptions amount to the
level of income, investor’s current age, investor’s expenses, size of the investors
family, investor’s marital status, type of occupation, and gender.

This data also shows various correlations among various variable factors that may be
responsible for certain preferences and their interrelations such as relationship between
the level of income, savings and the investment scale i.e. higher the income , higher the
saving resulting in higher investments. The one with the higher income scale expects
higher rate of returns and can be accounted to the risk taking category on the other
hand the one with the low level of income is not ready to take risk, etc.

The individuals who expect higher rate of return are from the category of high risk
takers, the ones who expect the moderate rate of returns amount to the lower risk
takers than higher ones and the individuals who expect stable returns even if the return
rate is low contents to the risk averters. The one who is highly passionate about his risk
taking ability demanded higher rate of return.

The data interpretation is hence the most important part of this study as it helps us in
coming to certain conclusions which can be seen in the next chapter of this report.

The data collected above shows difference in composition of population as well as

difference in their income level , their expenditure level their age getop and many more
variables.

Here an interpretation may be given as there exists low level of awareness among
various investors. Especially in the field of risk pooling and mutual funds.A high
percentage of individuals keep their money in banks and at most employ their
money/funds under the insurance sector. People are not ready to take higher risk but
they want higher rate of returns in short term.

Mostly the high risk takers are bachelors and on the other hand it can be seen that
married people are risk averts or fall under Investors do not have faith in the market
and tend to keep the money with themselves being more liquid.

The concept of time value of money is not known to many.Usually people tend to
invest very less proportion of their income which needs to be changed because to
multiply one’s income the investment amount must be accordingly.

It must be kept in mind that these interpretations are only the one extracted out of the
data obtained and is free from any biasness. The data collected here is the actual
response of the individuals of the survey.

52
Chapter - 5
53
 “Summary &
Conclusions”

CHAPTER 5 –SUMMARY AND CONCLUSIONS

This section of the project report gives out the concluding details of the whole project
work by defining the parameters and the areas which are studied and analyzed over the
period of time. All the conclusions are supported by facts and figures i.e. all the
illustrative statistics are hereby included to this section of the project report for
providing a brief overview of the study conducted. This section of the project report
also provides various suggestions and scope for further study.

It can be concluded that the study gave a lot of key insights to the real life experience
and was successful in providing optimum outcomes brought out under controlled
environmental settings. Hence, it contains certain limitations too which are mentioned
under section 6.2.

54
 5.1 Results ofthe Study:

The study conducted and the data analyzed and interpreted gives certain conclusions
which cover the areas of analyzing the risk perception for offering the ideal financial
product to the individuals. The report reveals that there are a large variety of opinions
among the investors, but this is one of the main limitations that the individuals lack in
the level of awareness about the various items available to them , lack of knowledge
resulting to lower levels of confidence (more of the limitations are mentioned the
section 6.2). The report also provides us with information that helps us to come to
various conclusions and interpretations some of them include that all the individuals
studied here prefer wealth creation but keeping a nominal value of risk. This report
hence provides that there are many different individuals with different levels of risk
perception but ultimately they want wealth creation in forms of expected returns.

The individuals who expect higher rate of return are from the category of high risk
takers, the ones who expect the moderate rate of returns amount to the lower risk
takers than higher ones and the individuals who expect stable returns even if the return
rate is low contents to the risk averters. The one who is highly passionate about his risk
taking ability demanded higher rate of return.

This report shows various correlations among various variable factors that may be
responsible for certain preferences and their interrelations such as relationship between
the level of income, savings and the investment scale i.e. higher the income , higher the
saving resulting in higher investments. The one with the higher income scale expects
higher rate of returns and can be accounted to the risk taking category on the other
hand the one with the low level of income is not ready to take risk, etc.

The report concludes that various factors that influence the risk perceptions amount to
the level of income, investor’s current age, investor’s expenses, size of the investors
family, investor’s marital status, type of occupation, and gender.

5.2 Limitations:

This section of the report enlists various limitations which must be taken into account.
These are:

a) The data i.e. the sample size was small. Hence, the derived results may be far away
from the actual picture.
b) Less time was taken for the completion of the project report.
c) There were time constrains for analyzing the previous studies i.e. the literature review.
d) The sampling method taken was a non probability method.
e) There exists scope of data influence/ biasness.
f) The research relies over the questionnaire responses and doesn’t take into
consideration various other factors that may influence ones opinion.

55
 Besides carrying these limitations the research here may be proved very useful and can
be used for analyzing thinking patterns of various individuals as well as justifying
conclusions of various fields

5.3 Suggestions, Scope for further Study & Conclusion:

Under this section of chapter VI Suggestions based on results of the study are
provided. The scope for extension of the study to new geographical areas, segments,
time with larger data, is mentioned under this heading. Finally, the conclusion
covering findings of the work, whether the stated objectives of the work are achieved
with full justification, recommendations, limitations, directions for future development
are given.

5.3.1 Suggestions:

Some of the suggestions that may be kept in mind for further improved study are:

a) Increasing the sample size and trying to derive results of the study using a different
method which may provide more accurate results near to the actual picture.
b) More time could be invested in terms of filing a new report, one must give more time
to the study of past research papers and must work on the review of literature with full
loyalty and dedication.
c) An individual should increase/decrease; modify the questions according to the desired
outcome generation.

5.3.2 Scope for further Study & Conclusion:

This section of the project provides with the scope for further study and gives useful
conclusions. The areas which are mentioned here under the section of suggestions may
be taken into account for a new level of study or a new field/area of exploration.

The scopes for the further study are listed below:

 Estimating Financial Requirements

 Deciding Capital Structure
 Selecting a Source of Finance
 Selecting a pattern of investment
 Proper Cash Management
 Implementing Financial Controls
 Proper Use of Surpluses

56
 This project reveals that:

a) There exists low level of awareness among various investors. Especially in the field of
risk pooling and mutual funds.
b) A high percentage of individuals keep their money in banks and at most employ their
money/funds under the insurance sector.
c) People are not ready to take higher risk but they want higher rate of returns in short
term.
d) Mostly the high risk takers are bachelors and on the other hand it can be seen that
married people are risk averts or fall under ,
e) Investors do not have faith in the market and tend to keep the money with themselves
being more liquid.
f) The concept of time value of money is not known to many.
g) Usually people tend to invest very less proportion of their income which needs to be
changed because to multiply one’s income the investment amount must be
accordingly.

The current scenario of the Indian market suggests a dire need to spread awareness
regarding upcoming and existing investments schemes and concepts in the financial
market.

57
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62
 “Annexures”

QUESTIONNAIRE

Dear Sir/Madam,

I am conducting a survey on “Private Wealth Management”. I request

you to kindly give your valuable time to fill this questionnaire.

*I assure you that data provided will be kept confidential.

63
 1. Name: _____________

2. Contact Number: ____________

3. E-mail Address: ___________________

4. Gender: _______________

5. Age Group:

o 20-25 years
o 25-30 years
o 35-40 years
o 40 above
6. Occupation:

o Business
o Service
o Others:________
7. Income Group (pa):

o 0-5 lakh
o 5-10 lakh
o 10-15 lakh
o 15-20 lakh
o 20 lakh and above
8. What percentage of your income do you save?

o 0-10%
o 10-20%
o 20-30%
o 30-40%

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o 40-50%
9. What are your saving objectives?

o Children education
o Retirement plan
o Home purchase
o Children Marriage
o Health care
o Other
10. What percentage of your income do you invest?

o 0-10%
o 10-20%
o 20-30%
o 30-40%
o 40-50%
11.What is your investment objective ?

o Wealth creation
o Tax saving
o Earn return
o Future Expense
12. Which of the following options have you invested before?

o Insurance
o Real estate
o Banks
o Mutual funds
o Post office

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o Government Securities
o Equities/Shares
o Gold
o Others: __________

13. Which factors do you consider before investment?

o Safety of principal
o High return
o Low risk
o Maturity Period

14. How often do you monitor you investment?

o Daily
o Monthly
o Occasionally

15. What is the time period you prefer to invest?

o Short term (0-1 years)

o Medium term (1-5 years)
o Long Term (>5 years)

16. On the scale of 1 to 10, how would you rate your risk taking ability?

1 2 3 4 5 6 7 8 9 10
( 1 being the most conservative and 10 being the aggressive)

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