Perception of consumers regarding personal financial planning

CHAPTER 1

INTRODUCTION TO

THE STUDY

1

1.1 INTRODUCTION

The concept of personal financial planning refers to the process of managing personal

assets in order to achieve personal economic satisfaction. Personal financial planning

can encompass a wide variety of strategies, including budgeting, investing, insurance,

career planning, and perhaps the most obvious of all retirement planning. Given the

breadth of personal financial planning, a wide variety of areas must be considered,

and several complex and interrelated decisions must be made in the process of

individual financial planning. The major planning required to be done under PFP’s are

as follows:

1) Tax planning—minimizing taxes

2) Cash flow planning—savings and spending policies

3) Investments—efficient deployment of resources for the future

4) Risk management—incorporation of insurance and other practices to establish and

limit household exposures to uncertainty

5) Retirement planning—life cycle planning for the period in which work-related

income ceases

6) Estate planning—organizing finances with concem for other household members

and other people and causes, most typically, for the period beyond the demise of the

asset holder.

HISTORY

The steady rise in the standard of living in the United States over the post-World War

II period, the increased complexity of financial instruments and taxation, and the

boost in processing power occasioned by the computer, created an environment

conducive to PFP development among the middle class. PFP, whose initial efforts

were heavily product sales oriented, began to mushroom in the early 1970s. The

College for Financial Planning (College), which provided training for the CFP degree,

began in 1972; the International Association for Financial Planning (IAFP), a trade

2

organization, was founded in the late 1960s; and the National Association of Personal

Financial Advisors (NAPFA), an organization of planners compensated solely by fees

("fee-only"), began in 1983.

1.2 OBJECTIVE OF THE STUDY:

Primary objective:

To understand the basic motive for which people are going for Personal Financial

Planning. The underlying motive can be securing future, tax benefits or to have

better returns.

Secondary objectives:

To have a better understanding of the financial services and the products.

To understand the role of insurance in personal financial planning.

1.4 RESEARCH METHODOLOGY:

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

through questionnaires and also through personal interviews.

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

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

The data collected is either Inferential or Descriptive. Hence based on the type of

data, analysis of the data is done by applying various statistical tools.

3

1.5 TOOLS USED FOR ANALYSIS:

The tools and techniques used for the collection of data is primary data and for

analysing the data the percentage analysis, Historical Trend Analysis and Cause

and Effect Analysis have been used.

1.6 SCOPE OF THE STUDY:

Personal financial planning (PFP) has grown rapidly over the past quarter century.

During that time, it has established itself as the financially related discipline that is

most useful to the average American. Yet the academic response to PFP have been

muted. Although the fields of economics and finance have both engaged in thought

and research that is close to parts of PFP, neither has dealt with the subject head-on.

Moreover, their approaches have been very different.

This research is basically to examine how much Indian people are aware of the

concept of PFP and how much they are ready accept it. This research will help in

explaining the hurdles in full growth of PFP and what necessary steps are required

for its growth.

4

1.7 LITERATURE REVIEW

Rachel, Vibhakar and Terry: (2007)

This paper highlights the opportunities lay ahead in personal financial planning as a

career option. However, the main issue in this paper the quality of services provided by

the financial service providers and the dilemma of judging their performance. This paper

addresses this dilemma by using personal financial planners as the model to develop

strategic marketing guidelines for credence service providers.

Douglas,Joel Gold and Gramlich (2010)

This paper is a survey report upon the potential liability resulting from using the

term “comprehensive financial planning by financial service providers. It tells the

responsibilities involved if any financial service provider uses this term. In this

survey, the respondents were the members of the Financial Planning Association

(FPA) and in this survey, less than a majority of respondents indicates that the

services they provide always constitute comprehensive financial planning.

However, the CFP Board deems acceptable the provision of less-than-

comprehensive planning services as long as the scope of such services are clearly

delineated.

Deena Katz ( 2010 )

This paper is a review of Q&A session in Texas University by Alpa Groups. In

this session, the basic agenda was the scope ahead in financial planning and

advisory services. The important areas covered by these pioneers of financial

advisers are as follows: financial advisors need to utilize the concept of social

networking in a true manner with full utilization of present advance technology

available. According to the speaker like medical practitioner, financial field also

requires experts for each phase of financial planning. They emphasized upon the

customer satisfaction making long relationship is a success key and one need to

understand their core competencies and capabilities to survive in this market. They

5

advice students to understand business practices acquire good marketing skills and

are able to communicate effectively with clients and manage their expectation.

SANDRA J. HUSTON (2010)

This study touches upon one of the most interesting and talk able issue of financial

literacy, but the crux of the article is not trying to measure the financial literacy

among the investors rather it is a review of studies already done and author has

tried to compare these studies to come to a conclusion how to measure financial

literacy what standards to be use. If a uniform standard can be decided upon it can

help in improving the financial literacy.

ANTOINETTE ALEXANDER (2010)

This article what should be the blue print when one is going to start a PFP

business. It talks about what technology to be used and what expertise’s are

required for good start. According to the author, one have to have a champion of

this niche service to really enforce the action plan and the ideal client for a PFP

practice has a higher income and has or will have substantial personal assets, and

most clients tend to be 55 and older.

Lewis Altfest ( 2004)

In this paper author emphasizes upon the further research on the PFP and also

argues that it should be included as a well defined academic field into the

universities. Author has tried to relate Life Cycle theory, CAPM and EMH with

PFP. He has also urged that PFP needed to be broadening from the Becker's

household model..

6

CHAPTER 2

INDUSTRY PROFILE

7

2.1 FINANCIAL SERVICES:

Financial services refer to services provided by the finance industry. The finance

industry encompasses a broad range of organizations that deal with the

management of money. Among these organizations are banks, credit card

companies, insurance companies, consumer finance companies, stock brokerages,

investment funds and some government sponsored enterprises. As of 2004, the

financial services industry represented 20% of the market capitalization of the

S&P 500 in the United States

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

companies and institutions involved with money, including businesses providing

money management, lending, investing, and insuring and securities issuance and

trading services. The following institutions are a part of the financial industry:

Banks

Credit card issuers

Insurance companies

Investment bankers

Securities traders

Financial planners

Security exchanges

2.2 HISTORY:

The term "financial services" became more prevalent in the United States partly

because of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different

types of companies operating in the U.S. financial services industry at that time to

merge. Companies usually have two distinct approaches to this new type of

business. One approach would be a bank, which simply buys an insurance

company, or an investment bank, keeps the original brands of the acquired firm,

8

and adds the acquisition to its holding company simply to diversify its earnings.

Outside the U.S. (e.g., in Japan), non-financial services companies are permitted

within the holding company. In this scenario, each company still looks

independent, and has its own customers, etc. In the other style, a bank would

simply create its own brokerage division or insurance division and attempt to sell

those products to its own existing customers, with incentives for combining all

things with one company.

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

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

the Wall Street crash in October 1929. The effects of the depression spread

across the world, especially in the heavy industries. Capital requirements

regulation, financial industry oversights and the insurance of deposit accounts

sprang out of this tumultuous period.

Black Monday (1987): On October 19, the stock markets across the world

witnessed a huge crash. This was the largest one day decline in the stock

market history. The crash started in Hong Kong, spreading to Europe and the

US. Analysts blamed computer trading systems for magnifying the losses.

Asian Financial Crisis (1990s): The Asian Financial Crisis was triggered by the

collapse of Thai baht as the government of Thailand decided to float the

national currency. The nation had a huge foreign debt at that point, driving it to

the verge of bankruptcy. The crisis rippled across the whole of Southeast Asia

and has led to many emerging market countries to reduce debts and build up

foreign currency reserves.

Stock Market Downturn (2002): Stock exchanges around the world witnessed a

significant decline in March 2002. It was attributed to the bursting of the ‘Dot-

com Bubble’, which saw major Internet companies going bankrupt.

Sub-prime Crisis (2007): Credit markets faced major crunch due to large scale

default on loans. It led to the Financial Crisis of 2008 – 2009 and resulted in

9

the bankruptcy, fire-sale acquisition and government bailouts of finance

industry giants such as Lehman Brothers, Bear Stearns, AIG, Fannie Mae,

Freddie Mac, Merrill Lynch, Wachovia, Northern Rock, Lloyds TSB, HBOS,

RBS and the entire banking system of Iceland. The world economy can expect

reduced growth rates and tighter regulations as a result of this crisis.

2.3 CURRENT SCENARIO OF THE FINANCIAL SECTOR:

With market sentiment turning positive due to the formation of a stable newly

elected government, the ripple effect is likely to felt across all the financial

services in India. The sectors, including banking and insurance, and mutual funds

are all beginning to reap the benefits of a good closure for 2008-09. In 2008-09,

the Indian economy is estimated to have grown by 6.7 per cent. According to the

latest Central Statistical Organization (CSO) data, financial services and real estate

sector rose by 9.5 per cent in the first quarter of 2009-10.

The government has taken a number of steps in recent months to revive the

economy, including slashing interest rates, lowering factory levies and more than

doubling the limit on foreign investment in corporate bonds. The financial services

space is a rapidly growing one in India. The country received US$ 45 billion in

foreign currency remittances from non-resident Indians in 2008, the highest in the

world.

April-May 2009 saw increased inflow in to equity with investors steadily turning

positive on equity according to mutual fund analysts. As per the Securities and

Exchange Board of India (SEBI), on May 15, net investment of mutual funds in

equity was around US$ 83.3 million lowering to US$ 20.5 million on May 21. As

against this, net investment of mutual funds in debt has more than tripled from

US$ 42.9 million on May 15 to US$ 134.2 million on May 31, 2009.

10

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

making liquidity available to enterprises. The total amount traded in corporate

bonds tripled from US$ 17.8 million to US$ 55.7 million during May 15 to May

21, 2009.

The largest fund house, Reliance Mutual Fund, registered 16 per cent growth in its

average assets under management (AUM) to US$ 21.6 billion in May 2009

compared to April’s figure of US$ 18.6 billion.

The second-largest fund house, HDFC Mutual Fund, grew 18 per cent to US$ 16

billion, compared with the previous month’s figure of US$ 13.4 billion.

The Spice Group is now looking for a US$ 1-billion valuation in financial services

business in the next three to five years. It has put US$ 105.2 million as seed

money for the financial services business and is roping in a Singapore-based firm

as a partner for the asset reconstruction business.

India has increased its exposure to American debt securities by over three-fold to

US$ 38.2 billion till March 2009 as against US$ 11.8 billion in March 2008,

according to the data from the US Treasury Department.

2.4 MAJOR GLOBAL PLAYERS:

According to the Global 2000 (annual report by Forbes), seven of the world’s top

10 companies belonged to the financial industry. These included Citigroup, Bank

11

of America, HSBC Holdings and JPMorgan Chase. Their combined revenues in

2007 were worth $645 billion, down from the 2006 high of $785 billion.

According to the Fortune 500 rankings, in 2006 financial services generated $257

billion in profits, a third of total Fortune 500 profits. In 2008, however, they lost a

staggering $213 billion, a total swing of $470 billion. Big players on the list, such

as Citigroup and Bank of America, may only be alive today thanks to government

money.

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

other industries. Trade and commerce across the world would come to a standstill

if there was no means to fund, pay and protect the transactions, hence the need for

governments to support the financial services industry when companies that are

‘too big to fail’ are close to collapse.

2.5 MAJOR PLAYERS IN INDIAN SCENARIO:

The top finance companies are playing a key role in the huge growth of the

financial sphere in India. The sector of finance is passing through a rapid phase of

alteration. The sustenance of the growth of economy is the primary factor for the

development of the India's financial sector. The best Financial companies in India

are the following:

Bajaj Capital Limited:

12

This is among the major Financial companies of India. The company offers best

investment advisory and financial planning. It provides institutional investors,

NRIs, corporate houses, individual investors, and high network clients with

investment advisory and financial planning services. It is also the largest provider

of finance products offered by public and private organizations, several

government bodies, investment products like bonds, mutual funds, general

insurance etc.

DSP Meriyll Lynch Limited :

It is the key player of equity and debt securities in India. It renders financial

advises to many corporations and institutions. It also offers a wide array of wealth

management and investor services along with customized advices related to

financial matters. This company is the pioneer to form research facility to research

in financial products and services, improvements and innovations. The company

also has its hand in the Government securities and holds an eminent position in the

market of equity and debt in India.

Birla Global Finance Limited :

This Indian Finance Company is a subsidiary of Aditya Birla Nuvo Ltd. Their

motto is to be the first choice of the customers as a major provider of financial

services through technology and value creation. The primary activities of the

company are Corporate Finance and Capital Market. Aditya Birla Nuvo has also

formed alliane with Sun Life Financial of Canada which has given rise to the

following financial services companies like Birla Sun Life Insurance Co Ltd.,

Birla Sun Life Distribution Co. and many others.

ICICI Group :

13

This company offers a wide spectrum of financial products and services in India.

The company provides solutions for all needs like InstaBanking,Online

Trading,Insta Insure,ICICI Bank imobile etc. The company keeps up the financial

profile healthy and diversify earnings across geographies and businesses. The

company's philosophy is to deliver high class financial services for all the cross

sections of the society. Their products are Mutual Fund,Private Equity

Practice,Securities,Life Insurance etc.

LIC Finance Limited :

It is the leading player in the finance sector of India being the biggest Housing

Finance Company of India. The function of the company is to provide finance to

individuals for repair or construction or renovation of the old or new apartment or

house. It also offers finance on the existing property for personal or business

matters. The company has 14 back offices,6 regional offices and 126 units of

marketing in India.

L & T Finance Limited:

The Larsen and Turbo group established this company in the year 1994 and now it

is a significant name in the financial sector. The company offers schemes like

funds for automobiles, funds for Agricultural Instruments,secured loans,funds for

automobiles and many others. It offers loans for a long tenure and the loans are

given in exchange of valuable items.

Karvy Group:

One of the top players in the financial sector is this group. The company has about

575 offices in 375 destinations in India. It offers services like the Mutual Funds

Services,Depository Services,Debt Market Services,Investment Banking and many

others.

2.6 INDIAN INSURANCE INDUSTRY:

14

2.6.1 HISTORY:

The insurance sector in India has completed all the facets of competition –from

being an open competitive market to being nationalized and then getting back to

the form of a liberalized market once again. The history of the insurance sector in

India reveals that it has witnessed complete dynamism for the past two centuries

approximately. 

With the establishment of the Oriental Life Insurance Company in Kolkata, the

business of Indian life insurance started in the year 1818. 

Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force for

regulating the life insurance business.

1928: The Indian Insurance Companies Act was enacted for enabling the

government to collect statistical information on both life and non-life

insurance businesses.

1938: The earlier legislation consolidated the Insurance Act with the aim

of safeguarding the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies were taken

over by the central government and they got nationalized. An Act of

Parliament, viz. LIC Act, 1956, formed LIC. It started with a capital of

Rs. 5 crore and that too from the Government of India.

The history of general insurance business in India can be traced back to Triton

Insurance Company Ltd. (the first general insurance company) which was formed

in the year 1850 in kolkata by the British. 

Important milestones in the Indian general insurance business

15

1907: The Indian Mercantile Insurance Ltd. was set up which was the

first company of its type to transact all general insurance business.

1957: General Insurance Council, an arm of the Insurance Association of

India, framed a code of conduct for guaranteeing fair conduct and sound

business patterns.

1968: The Insurance Act improved for regulating investments and set

minimal solvency levels and the Tariff Advisory Committee was set up.

1972: The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India. It was with effect

from 1st January 1973.

107 insurers integrated and grouped into four company’s viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental

Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was

incorporated as a company.

SIZE

Insurance is a US$41-billion industry in India, and grew by 36% in 2006-07

over the previous year

Life Insurance - US$35 billion industry with US$24 billion accounting for

First Year Premium (inclusive of Single Premium)

Non-Life Insurance - US$5.6-billion industry; motor and health segments

account for 56% of total business

OUTLOOK:

16

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

by 2010

Expected CAGR of over 30% p.a.

POTENTIAL

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

Nearly 80% of the Indian population is without Life, Health and Non-life

insurance

Life insurance penetration is low at 4.1% in 2006-07

Non-life penetration is even lower at 0.6% in 2006-07

The per capita spend on Life and Non-Life Insurance is US$33.2 and

US$5.2 (2006-07), respectively compared to a world average of US$330

and US$224

Strong economic growth with increase in affluence and rising risk

awareness leading to rapid growth in the insurance sector

Innovative products such as Unit Linked Insurance Policies are likely to

drive future industry growth

Investment opportunities exist in both life and non-life segments

Total estimated investment opportunity of US$14-15 billion

17

2.6.2 SOME OF THE LIFE INSURANCE COMPANIES IN INDIA

Table 1A-1

Sl. No. Insurers Foreign Partners Regn. No.

Date of Registration

Year of Operation

1. HDFC Standard Life Insurance Co. Ltd.

Standard Life Assurance, UK

101 23.10.2000 2000-01

2. Max New York Life Insurance Co. Ltd.

New York Life, USA

104 15.11.2000 2000-01

3. ICICI-Prudential Life Insurance Co. Ltd.

Prudential , UK 105 24.11.2000 2000-01

4. Om Kotak Life Insurance Co. Ltd.

Old Mutual, South Africa

107 10.01.2001 2001-02

5. Birla Sun Life Insurance Co. Ltd.

Sun Life, Canada 109 31.01.2001 2000-01

6. Tata-AIG Life Insurance Co. Ltd.

American International Assurance Co., USA

110 12.02.2001 2000-01

7. SBI Life Insurance Co. Ltd.

BNP Paribas Assurance SA, France

111 29.03.2001 2001-02

8. ING Vysya Life Insurance Co. Ltd.

ING Insurance International B.V., Netherlands

114 02.08.2001 2001-02

9. Allianz Bajaj Life Insurance Co. Ltd.

Allianz, Germany 116 03.08.2001 2001-02

10. Metlife India Insurance Co. Ltd.

Metlife International Holdings Ltd., USA

117 06.08.2001 2001-02

18

0

0.5

1

1.5

2

2.5

3

Ratio

2006 2007 2008 2009

Years

SOLVENCY RATIO OF INSURANCE INDUSTRY

2.7 Product offered by the industry :

Types of Insurance Fig F1-2

Life Insurance Non-Life Insurance(general insurance)

Property (eg.Builders risk insurance)

Aviation(eg.Private aircraft insurance)

Marine (eg. Marine hull insurance)

Miscellaneous (eg.Purchase insurance)

19

Life Insurance: The basic customer needs met by Life insurance policies are

protection and savings. Policies that provide protection benefits are designed to

protect the policyholder (or his dependents) from the financial consequence of

unwelcome events such as death or long-term sickness/disability. Policies that are

designed as savings contracts allow the policyholder to build up funds to meet

specific investment objectives such as income in retirement or repayment of a

loan. In practice, many policies provide a mixture of savings and protection

benefits.

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

present day. The following diagram and table shows the increase in premium

collection by insurance companies on yearly basis.

Year

s

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

Prm. 500944

4

557475

4

662879

3

828548

0

1058717

4

1560653

1

2013426

2

2216831

1

Fig F1-3

20

0

5000000

10000000

15000000

20000000

25000000

Rs in lakhs

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

years

Premium collection in life insurance

THE COMMON TYPE OF LIFE INSURANCE POLICIES ARE:

Endowment Assurance

Money back plan

Whole life Assurance

Unit Linked Plan

Term Assurance

Immediate Annuity

Deferred Annuity

Riders

2.8 FUTURE SCENARIO OF THE INDUSTRY:

Future Plans

21

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

projected about 500% hike in the size of domestic insurance business which will

grow to US$ 60 billion by 2010 from the current size of around US$ 10 billion as

the growing competitive age is developing a larger appetite among people for

wider insurance coverage. 

The projections of the Chamber are based on feedback that it received from its

various constituents, engaged in the insurance business, highlighting that India’s

life insurance premium as a percentage of GDP is currently estimated at 1.8%

against 5.2% in US, 6.5% in UK and about 8% in South Korea. 

Releasing the analysis, ASSOCHAM President, Venugopal N. Dhoot said that

rural and semi-urban India will contribute US $35 billion to the Indian insurance

industry by 2010, including US $20 billion by way of life insurance and the rest

US $15 billion through non-life insurance schemes. 

A large part of rural India is still untapped due to poor distribution, large distances

and high costs relative to returns. Urban sector insurance is estimated to reach US

$25 billion by 2010, life insurance US $15 billion and non-life insurance US $10

billion”, added Mr. Dhoot. 

Size of Insurance Sector (In US $ billion)

               Projections*

Category Rural & Semi-Urban** Urban Total

Life Insurance 20 15` 35

Non-Life Insurance 15 10 25

Total 35 25 60

* Projected figures by 2010

22

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

ASSOCHAM findings further reveals that in the coming years the corporate

segment, as a whole will not be a big growth area for insurance companies. This is

because penetration is already good and companies receive good services. In both

volumes and profitability therefore, the scope for expansion is modest. 

PROJECTION OF LIFE INSURANCE AND NON LIFE INSURANCE

PREMIUM 2009-14

YEAR LIFE INSURANCE NON-LIFE INSURANCE

INR m 2004 prices INR m 2004 prices

2009 1667814 1312134 429750 338101

2010 1983051 1485832 496 953 372 350

2011 2 366 576 1 688 756 572 727 408 690

2012 2 804 561 1 905 996 651 736 442 924

2013 3 326 543 2 153 072 734 778 475 578

23

2014 3 947 899 2 433 546 828 433 510 659

2.9 DEVELOPMENTS IN THE GLOBAL INSURANCE MARKET:

The global insurance industry is one of the largest sectors of finance. It ranges

from consumer to corporate and industrial insurance, and even reinsurance, or

insurance of insurance. The major insurance markets of the world are obviously

the US, Europe, Japan, and South Korea. Emerging markets are found throughout

Asia, specifically in India and China, and are also in Latin America. 

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

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

The four biggest generators of insurance premiums comprised almost two-thirds of premiums for 2004, the US and Japan amount to half, while they only make up 7% of the world’s population. In contrast, the emerging markets that make up 85% of the world’s population produced only 10% of the premiums. 

Some of the leading global insurance companies are: 

Zurich Financial Services,

AXA

24

Aviva

ING Group

American International Group (AIG)

Nippon Life Insuranc

Swiss Re

Allianz Re

Axis Capital Holdings

MetLife

China Life Insurance

2.10 PEST ANALYSIS

25

A PEST analysis is concerned as to how the external environmental influences

the business.

The acronym stands for the

Political

Economic

Social

Technological

Such issues that could affect the strategic development of a business. Identifying

PEST influences is a useful way of summarizing the external environment in

which a business operates.

Political Forces:

Political Stability.

26

Price and Tax Regulations.

Legal Regulations.

Wage Regulations etc.

Economic Forces:

Economic growth.

Inflation Rate.

Interest Rates.

Type of Economic situation in the country etc.

Social Forces:

Society and Culture.

Education and awareness among the general mass

Attitude of the customers towards the changing generation

Technological Forces:

Recent Technological Development.

Technological Impact on the Product.

Costs etc.

New technological innovations

27

CHAPTER 3

COMPANY PROFILE

3.1 COMPANY PROFILE:

28

Allegro Advisors is a leading Indian full service investment bank that builds value

across a spectrum of clients, including the government, corporations, financial

institutions, high net-worth individuals and professionals.

MISSION

To help accumulate, grow and manage the wealth of high net worth individuals,

professionals, family groups and businesses.

Allegro’s Value advantage:

Independent

Allegro is an independent, unbiased advisor to its clients. Our advice is free from

the compulsions associated with representing manufacturers of financial products.

It is unaffected by the limitations of operating in a compartmentalized business

group. We, therefore, have the credibility and operational edge to be independent

while consistently placing our client's interest first.

Informed

The diverse experience and skills of our team together with top sources of market

and industry information, enables us to provide the best advice to our clients -

corporate, institutions or individuals. Our methodology, people development,

analysis and research processes are of the highest standard. We make it our

business to be fully informed about our client needs, while closely following

products and industry trends.

Innovative

29

Solutions at Allegro are the result of innovative tools and investment ideas that

seamlessly integrate business lines based on trends, expertise and a time-tested

approach to being custodians of our clients' financial interests. Alternative

investment strategies, the focus on restructuring debt or our pioneering initiative to

advise corporations on public offerings, bear testimony to Allegro's ability to offer

solutions that are out-of-the-box.

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

made by our team fits into a customized plan that is outlined at the commencement

of a relationship. Each proposal is backed by proprietary, focused research, fund

management expertise and the lowest client-to-advisor ratio in the industry.

3.2 PRODUCT AND SERVICES OF THE COMPANY:

Allegro's Services are broadly classified into:

Capital Markets advisory services.

Corporate Finance Services including equity and debt placement, debt

restructuring and Mergers &Acquisitions

Investment Advisory Services covering retail and corporate investment and

wealth management services, Portfolio Management Services, Secondary

market execution services and Insurance Advisory Services.

Asset Management that involves building a INR 1 billion restructuring

fund.

30

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

Investment banking.

Private banking

Investment management

Retail

INVESTMENT BANKING:

Companies investment banking expertise ranges across domestic and cross border

mergers & acquisitions, capital raising, debt restructuring and Initial Public

Offerings. Allegro's global, cross-industry expertise and strong associations with

financial institutions, venture capitalists and industry leaders, positions us to offer

comprehensive advisory expertise to Indian corporations seeking to grow in

domestic and international markets.

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

advising on transactions both in Indian and international markets. Our strategic

partnership with Close Brothers Group, amongst the largest international

investment banking advisory groups in the mid market segment, enables the

company to offer Indian corporate houses a global full service advisory platform.

Over the past five years, Allegro has advised on transaction in excess of Rs 75

billion across service lines and geographies, with marquee clients that include

Biocon, Indian Seamless Group, AIG, Royal Orchid Group, You Telecom, etc.

Under investment banking the main functions of the company are:

Fund raising and capital markets.

Mergers and acquisitions.

31

Distressed assets.

FUND RAISING:

Company bring to bear their extensive relationship with financial institutions to address the unique needs of the clients.

Equity placements:

Strategic assessment, business plan finalization, assistance in presenting

investment considerations.

Transaction structuring

Identifying and approaching funds

Pricing strategy and negotiations

Debt placement:

Assessing debt capacity

Optimizing capital structure

Reviewing potential credit ratings attainable

Lender negotiations

Pricing strategy and negotiations

Capital markets:

Company leverage their deep understanding of capital markets and relationship

with financial institution to provide quality advice to our clients on transaction

such as IPO advisory, private placements etc.

32

IPO Advisory:

Business plan finalization. Review and finalise corporate and issue structure.

Appoint intermediaries, IPO documents.

Assists in marketing and road show.

IPO launch and post IPO support including research and investment relations.

Private placement:

Strategic assessment.

Identifying and approaching investors.

Pricing strategy and negotiations.

Mergers and acquisition:

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

banking which helps them to identify targets, structure and execute transaction

across a spectrum of industries.

Acquisition /Joint venture assistance:

Target identification and evaluation.

Transaction structuring

Due Diligence assistance.

33

Pricing strategy and negotiations.

Divestitures:

Strategic assessment and business plan finalization

Buyer identification

Pricing strategy

Bid evaluation and negotiation

Sell side advisory:

Buy-outs offer complex situation where typically expectation of the seller, equity

and debt financiers, management/buyers need to be married. Having worked on

two of the largest buy-outs in the country, which involved some of the most

prominent financiers, now company is in apposition to offer considerable expertise

in strategic and tactical advice on buy-outs.

Identify select list of prospective financial partners based on experience in similar transactions and financial.

Identify and evaluate options for structuring the buy-out with prospective financial partners.

Assist with bid strategy

Negotiate terms and conditions with the financiers.

Allegro is widely acknowledged as the leader in distressed assets advisory and has

advised on some of the most high profiles deals in India.

Debt take-out

Assisting in business plan.

Assessing capital structure

34

Identifying and negotiating with mezzanine and distressed debt financiers

Structuring the transaction to meet sponsor and company requirements

Debt restructuring:

Assisting in business plan finalization.

Assessing capital structure.

Negotiating with existing lenders on restructuring package.

Project management.

PRIVATE BANKING:

With a mission to help accumulate, grow and manage the wealth of high net worth

individuals, professionals, family groups and businesses, Allegro's Private

Banking Practice offers personalized financial planning and legal advisory

services. Our advice covers investments across asset classes and ranges from

capital markets, debt instruments, real estate, private equity opportunities, to select

corporate finance requirements. For clients with multiple asset managers and a

diverse portfolio, we offer a holistic 'Fund of Funds' approach that is in complete

synergy with the unbiased nature of our advice. We also collaborate with

specialists for estate advisory, tax and legal services, so becoming a "family

office" to our clients. Pioneers of independent lifecycle management services in

India, Allegro runs the largest fee paying investment advisory service in the

country. Our advice covers the entire spectrum of an individual's financial need,

from investment planning and execution to tax planning and compliance. Goals,

set across a perpetuity, are assiduously worked upon by advisors keeping in mind

the gradual and limited growth in corpus and the risk profile of this segment.

35

INVESTMENT MANAGEMENT:

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

discretionary basis across retail, high net worth and corporate clients. Allegro

Capital Pvt Ltd is registered as a Portfolio Manager with the securities and

Exchange Board of India (Registration No:INP000002437). On this platform

Allegro has created distinct investment strategies to suit a wide variety of client

goals and risk preference that are able to constitute core elements of most assets

allocation strategies. These strategies encompass most of the liquid asset classes

including equities, mutual funds fixed income and precious metals, among others.

The investment management group aims to bring institutional quality investing to

all our clients.

RETAIL:

very Allegro branch offers over 18 different categories of financial products from

over a 100 companies representing the entire spectrum of what's available

anywhere in India. Stock Broking, Life & General Insurance, Mutual Funds, Gold

traded funds, IPO's, Loans & Advances, Money transfer, Private Banking,

Portfolio Management Services, Real Estate & Property Management Services and

International Investments Products are on offer to every customer who walks into

a branch , but without bias of a company and in a seamless borderless manner. The

customer gets choice, comparisons and advice on what is best suited to him or her.

This approach keeps the clients financial interest at the centre of its business

model and is at a complete variance of the existing approach of most financial

institutions such as banks and insurance companies to "sell" their products,

whatever the need of the client. For instance, if the customer walks into an Allegro

branch with INR 10000, he or she can invest the money in a mutual fund, in

insurance, in shares, in gold, or RBI bonds with no pressure to choose the kind of

36

products or the company it comes from. Advisors, specialized in the range of asset

classes would help customers look at options and choose a product that is best

suited to their requirements.

Allegro represents leading financial brands and services of India and in the

locations we are present in. Mutual funds from all Asset Management companies

including Reliance, HDFC, Fidelity, ICICI etc, Gold ETF's, PMS products,

Broking on the NSE, Home loans from HDFC Ltd and International investment

products from Close Brothers are just some of the investment products on offer.

The financial supermarket branches are now spread across Kerala, Karnataka,

Tamil Nadu and Andra Pradesh. The All India phase 1 launch will be complete by

March 2008.

3.3 BUSINESS STRATEGY:

A Fundamental Basis

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

well as down to specific securities. The investment process is in general a

combination of top down and bottom up processes. The former essentially focuses

on identifying, and allocating capital to the economic themes and trends that are

likely to be profitable over the next six to twelve months while the objective of the

latter is security and trade selection that will implement, most effectively, those

themes and trends to which capital has been allocated. Overlaid over this

philosophy is a robust portfolio and risk management process that controls market

and credit risk and ensures that client portfolios are not exposed to risks beyond

what is reasonably allowable for the strategy.We focus on real numbers and

analysis rather than merely judgement and employ analysts dedicated to

quantitative research, portfolio construction and management

37

Risk Management

We believe that operational and settlement risks are equally critical to the process

of generating returns and have put in place strong operations and technology

processes to ensure that such risks are monitored and accounted for. We partner

with financially strong and well capitalized institutions in the financial services

and technology space for our third party requirements in order to be able to

provide quality services to our clients

Process and people

We do not believe in clustering business around star managers - instead we put our

faith in time tested investment and portfolio management processes that stay true

to investment goals. While we believe that our people are biggest asset, our faith is

in the processes that a team has put together, not a single individual.

Transparent and Client Aligned

Last, but not least, we believe in a transparent approach to our business and

implement this via disclosures, reporting and where necessary, explanation of our

views and strategy and their risks and limitations.

Our belief is that we should succeed only when our clients do, so our charging

structure of a management fee to cover essential management expenses along with

a performance fee that rewards us when our clients perform over a minimum

return keeps our goals aligned with those of our clients.

38

CHAPTER 4

ANALYSIS AND

INTERPRETATION

39

4 ANALYSIS AND INTERPRETATION:

A Questionnaire was prepared in order to collect the primary data from the

respondents that are the perspective customers.

Following were the data obtained after collecting through primary data collection

in order to analyze the research problem “PERCEPTION OF CUSTOMERS

REGARDING PERSONAL FINANCIAL PLANNING”. The method used to

analyze the various aspects is the PERCENTAGE ANALYSIS method.

4.1 DEMOGRAPHIC RESULTS:

A ) GENDER

40

GENDER

male74%

female26%

male

female

Interpretation :

From the survey conducted it is infer that out of the sample size of hundred ,

74% of the respondents were male and

26% of them were female.

ANALYSIS:

This reveals the fact that the male population is more aggressive in

knowing the market situation and its growth trends.

Where as the female population who are proffesionals , were only ready to

grasp the knowledge in the equity market.

The reason for this huge variation could lack of curiosty to seek more outer

knowlegde among women as compared to men.

sexmale 74female 26total 100

41

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

towards their family life hence they do not have sufficient time to know

about the market.

B) QUALIFIACATION

QUALIFICATION

Graduate56%

Post Graduate

44%

Graduate

Post Graduate

Interpretation:

The above diagram gives us an inference of the qualification level of the

respondents.From the sample size of hundred:

56% of respondents are graduates

44% of them are post graduates

The graduates were mainly from the commerce background,with few from the

science and few from the arts background.Where as the postgraduates were the

people who hav done their masters.majority were MBA’s ,with some

MBBS,Engineering and some of them were also CA’s.

ANALYSIS:

The basic reason why majority of the respondents were graduates ,because of the

fact that

In a country like India the level of education among people has still not

reached the upper level.

Qualification  

Graduation 56

Post

Graduation 44

Total 100

42

People believe that being a graduate means securing full knowledge .

Also many are there who wants to gain knowledge about the equity

market ,but since they are not well versed with the subject they are unable

to do so.

Only the specialized ones are aware of online trading,rest have zero

knowledge about stocks and shares.

C) OCCUPATION

Interpretation:

From the above diagram it can be well interpreted that out of the hundred

respondents:

15% are people who have their own business

26% are company managers

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

Occupation

Business 15

Manager 26

Student 10

Others 49

Total 100

43

49% and more are people who are profeessionals from diffrent areas such

as some of them are doctors,engineers.CA’s ,lawyers.teachers,financial

advisors etc...

ANALYSIS:

The main reason for this kind of segregation could that different income group

people spent and invest their money differently .Each and every individual has a

different perception with regards to PFP.

The business class has a perception of gaining more and more profits and

earn revenues from the equity market.They keep on circulating their own

money.

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

people.This may be due to the fact that they are having good knowledge of

the equity and hence believe in changing themselves according to the

changing trends.

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

The largest pillar comprises of people who are professionals.It very clearly

signifies that people who are curious,have an appetite for knwoledge,and

also risk bearers.Their perception would be entirely differnt frm the other

class people

D) AGE

44

AGE

20-3070%

41-509%

32-4021%

Interpretation :

Looking at the chart above we can infer that out of the hundred samples which

were surveyed :

70% belonged to the age group between 20-30 years

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

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

ANALYSIS :

If we analyse the above given situation we can see that perception of customers

towards the equity market also varies according to the variation in age groups.

AGE  

20-30 70

32-40 21

41-50 9

Total 100

45

People who are under the age group of 20 -30 years are those who are

always curios,and eager to know about something new.Majority people are

young managers and young business men.

The basic reason for the variation in perception could be because according

to growth in age people become more and more family oriented.

They want to save money for the family rather than taking risk and

investing in equity and other such kind of investments.

Hence forth people of higher age groups show a dcreasing perception

towards equity.

E) ANNUAL INCOME

Interpretation :

When we interpret the annual income of the sample size of hundred respondents

we can find out that:

73% of them have an annual income upto 5 lac.

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

Income  

0-5L 73

5-10L 24

10-15L 3

Total 100

46

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

ANALYSIS:

After the survey what analysis can be done is that:

People who trade and invest in finacial products are people who do not

have a high income profile.

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

Where as the higher income group people are not so much interested in

investing in equity. They rather invest in property, real estates and

purchasing of assets.

Such porsch people have sufficient wealth which they do not feel to

invest.According to them equity and such stuff are a waste of time and

money both.

F) SOURCE OF INCOME

Source of Income

Salary 67

Business 27

Ancestral

Property 0

Others 6

Total 100

47

Interpretation:

Giving an inference of the above data from the sample size of hundred we can

say that:

67% of the people earn their revenue from their salary

27% of them get their income frm business.

6 % get from other relevant sources.

ANALYSIS:

If we analyse the given data we can find out that :

Most of the people who are earning a salary are more ready to invest in the

market.They believe that even if they invest their salary is fixed.

Whereas people whose source of income is business and other such sources

feel that they have a bulk of money which they would like to retain for their

future ‘s security.

48

Overall we can say that people‘s perception is highly affected by the

income source .

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

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

4.2 ANSWERS TO QUESTIONNARE:

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

30%

70%

YES NO

Interpretation:

Looking at the diagram above we can say that ,out of the hundred respondents:

70% of respondents are availing the facility of personal financial planning.

30% of repondents are srill not availing this facility.

ANALYSIS:

Availing PFP

Yes 70%

No 30%

49

Analysing the market survey which was conducted on a sample size of hundred

the response was :

The above 30% of respondents not having any type of PFP are basically

those people who have started their carrear recently .

70% respondents having PFP are combination of people.

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

experiances.

People not having PFP are also showed their intrest for it and respoded

positively when asked about “will they go for it in future?”

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

NO. OF

RESPONSES

Self 45

spouse 15

family 20

I have a dedicated person

20

50

0

5

10

15

20

25

30

35

40

45

Self Spouse Family I have dedicatedperson

Interpretation:

From the survey conducted we can infer that out of the sample size of hundred ,

45% of respondents were managing their financial planning themselves.

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

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

20% respondents have dedicated proffesional for this purpose.

ANALYSIS:

The above scenario reveales that majority of the people are

interested in doing their personal financial planning themselves.

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

we can infere from this still people are not ready to take the service of

personal financial advisors for this purpose.

But one possible reason for the above mentioned scenario can be

people has given this responsibility to their family members.

51

Q 3. Do you have full life cover?

20%

80%

Yes

No

Interpretation:

Only 20% of people are fully covered

80% were not fully covered

ANALYSIS:

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

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

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

Human life value is the amount of money which replaces income to the

family in the event of premature death of the family head.

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

dependents.

Fully covered

Yes 20%

No 80%

52

Q4.Which type of insurance plan do you have?

INSURANCE PLANS

0

5

10

15

20

25

30

35

40

ULIP Term Endowment Mixed Don't know

Interpretation:

34% respondents are having ULIPS.

13% are having term plans.

Only 3% are availing endowment plans.

20% are having mixture of all plans.

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

ANALYSIS:

INSURANCE

PLANS

ULIP 34

Term 13

Endowment 3

Mixed 20

Don't know 30

53

The main noticeable point here is 30% insurance holders were not

aware of the terms like ULIP, term, endowment etc.

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

literacy .

Then if consider the respondents who know these differences majority

are having unit link plan.

The huge amount of money following in into the market through these

ULIPs is itself proves the fact that it is a most popular insurance plan among

the customers.

But if can infer from these responses that still awarness among the

customers needed to be improve.

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

0

5

10

15

20

25

30

35

Insurance Equity Dept Bank Deposit Post off icedeposits

Other

Interpretation:

Out of the hundred people who were interviewd :

14% people are having their maximum investment in

the form of insurance cover.

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

Types

Insurance 14

equity 20

dept 20

bank deposit 11

post office

deposits 30

other 5

54

Bank deposits are also not that far when it comes to customer preference

and thus 11% respondent voted for it.

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

ANALYSIS:

The above reveliations proves the assumtion of investors are risk

averse.

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

not in the form of insurance, equity, bankdeposits or post office, but in this

category also there was a union in the form of people having maximum

investment in the form of gold. So we can infere that gold is also a preffered

investment destination.

Equity and dept with 20% each also reveales the changing

preferences of indian customers.

Insurance as a investment tool lagging behind and needs more

customer attention.

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

ANALYSIS:

Taking an overview of the interpretation obtained we can analyse that:

Every one are not that specific about diversified investment.

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

Every one in some or other are having insurance.

55

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

Service provided

partially satisfied

41%

not satisfied25%

Fully satisfied34%

Interpretation:

When such a question was asked the responses received were that:

Only 34% of them were fully satisfied with the services provided by the

respective companies.

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

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

partially satisfied..

ANALYSIS:

It can be well analysed from the above interpretation that

Even if people are trading in different companies they are not at all satisfied

with the services and charges which the companies charge.

56

Very small percent are fully satisfied.Majority of them are partially

satisfied.This is because if they are satisfied with their charges then they are

dissatisfied with the services provided and visa versa.

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

respective company’s.

Also the approach and response was a major criteria for this answer where

people individualy judged

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

0

5

10

15

20

25

30

35

40

45

·       Security.

·       PersonalInterest

·       Business

·        Toearn profits

·        Taxbenefit

Interpretation:

When the customers were asked about the purpose of their PFP they gave the

followinfg answers.:

10% said they are doing it for future security purpose.

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

15% people doing it as their core business.

45% are doing it for tax benefit.

SECURITY 10

PERSONAL

INTEREST

10

BUSINESS 15

FOR PROFIT 20

TAX BENEFIT 45

57

ANALYSIS:

As we can see 45% people voted that they are doing PFP for the sake of

tax benefit so we can infer that the government plans to increase

investments in the market by giving tax rebates has actually proved

successful.

As only 20% people are doing it for profit we can say that still people

don’t real upon it much.

The percentage of people doing investment just for personal interest is

also no that less so we can assume here that the number of people doing

investment to have an experience is also improving.

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

influence investment by making changes in rules and regulation and it

will definitely going to work.

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

Ans )

RETURNS

Good Returns20%

Low Returns29%

Average Returns

51%

ReturnsGood Returns 20

Average Returns 51

Low Returns 29

Total 100

58

Interpretation:

Talking about returns people were not raedy to speak much.Still out of the sample

size of hundred.:

20% people got good returns from the equity

29% got low returns

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

ANALYSIS:

When this question was asked to the respondents they did not take much time and

said that :

Investing in equity would never give 100% returns.

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

Hence from the above facts we can analyse that trading involves high

risks.If we go with high risks we may or may not get high returns.

Also speculation is a major factor which drives all this .

Maximum people who are trading ,have never got full returns.Their

satisfaction level is low.

Trading involves lots of risks and other market factors which avoids

gaining returns.

Also the goverment funds when induced in the market ,makes the market

go up hence it becomes an improtant criteria for investment.

59

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

Ans )

SUGGESTIONS

Avail Service

67%

Don't Avail Service

33%

Interpretation :

Talking about the giving opinion to others ,following was the result obtained

from the hundred respondents.

67% people said customers should go for PFP .

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

ANALYSIS:

To give a broader and better prospect about PFP people just said that it is

always good to learn more, and earn revenues. Nevertheless, if it is

uncertain then one should have a perfect knowledge of the subject before

going into such business.

People said that those who are in this trading business can always go ahead

and avail the service if and only if they have the appetite to digest the risk

factor.

Suggestions  

Avail

Service 67

Don’t Avail

Servise 33

Total 100

60

And those really cannot digest this risk and feel that it is just a waste of

time and money both said that it is just a useless to invest in these factors

and they should not avail the service.

CHAPTER 5

FINDINGS,

RECOMMENDATIONS

AND CONCLUSIONS

61

5.1 FINDINGS :

Based on questionnaire following are the findings:

Youngster those freshly started working are still don’t belief on the

experts advice of early start of financial planning.

But they do showed interest for the same and said that they will go

for it in future.

The percentage of millionaires is increasing in India according to

current data it has been increased by 50%. So in such a scenario more people

will go for financial planning.

Based on above point we can also tell that financial planning may be

able to become a very lucrative career option in coming days.

Findings also suggest that the concept of human life value is hardly

known to people and that’s why they don’t have full life cover.

I also come to know that there a lot many long selling is happening

because of lack of awareness into this matter.

I would also like to draw attention towards the lack academic

attention towards PFP. Experts has been telling that its should be provided as

a professional course in universities,

5.2 RECOMMENDATIONS:

Based upon my findings I would like to give following recommendations:

Personal financial planning is a very important to achieve our future

financial goals and that is why every earning individual should go for it.

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Even while going for investment investors should go for diversified

investments to reduce risk..

People should consider other investment option tools with safe options such

as bank deposits, post office deposits etc as other investment option can

give much higher returns compare to above mentioned

Before going for insurance policies investors should consider all aspects of

it such as what is their requirement and after how many years, they want

returns and is that policy is fulfilling all these requirements.

If people are investing big amount money they should take professional

consultation to avoid extra risk exposure.

People should go for investment not only for tax benefits but with intention

of returns.

5.3 CONCLUSION:

To conclude I would like to say that personal financial planning is a very good

practice to improve the standard of living of the people and every earning person

should go for it. Its helps in achieving financial goals and provides financial

independence. Due to lack of awareness, people are not able to get full advantage

of PFP and with that even insurance sector need to improve. so that investors can

trust insurance companies. Indian insurance industry is one of the booming

sectors. In a nutshell, I would like to conclude by saying that:

Personal financial planning (PFP) is a fairly new and growing discipline.

PFP deserves academic recognition as well as additional academic research

in this area is required.

A course such as Certified Financial planner requires more attention and

credence.

Insurance sector needs to provide after sales service to achieve customer

satisfaction.

Awareness is required so that people will go for PFP not only for tax

benefits but also to secure their future.

63