Financial Planning & Wealth Management

Financial Planning & Wealth Management
By CA Rajkumar S Adukia / Financial Planning and Wealth Management

Agenda Explaining the essence of Financial Planning & Wealth Management Exploring Investment Planning/Wealth Management Knowing about Asset Allocation Do’s and Don’ts Mantras in Financial Planning and Wealth Management Investor Risk Awareness Financial Planning and Wealth Management

INDIAN FINANCIAL SYSTEM
Intermediaries Regulators Financial Instruments Financial Markets Credit Market Forex Market Capital Market Money Market Primary Market Capital Market Instrument Money Market Instrument Secondary Market Financial Planning and Wealth Management

What is Financial Planning?
Income Planning Income Tax Planning Insurance & Health Planning Investment & Wealth Planning Retirement Planning Estate Planning Financial Planning and Wealth Management

Steps in Financial Planning
Know Your Financial Goals Step 2 Know Your Financial Position Step 3 Know Your Risks Step 4 Know Your Investments Financial Planning and Wealth Management

Categorizing Individual Investors
Salary Earners – Government/Private Self Employed/Entrepreneurs/Traders Professionals Others – Students, Housewives, Retired Individuals They can further be categorized into Beginners Middle Level Final Level Financial Planning and Wealth Management

Salary Earners Every month Salary is wealth accumulation
Rule of Thumb : Always hold 3 months salary in savings (job change/delay in payout) Beginners: Be more aggressive (no or less liabilities, consistent income level) Mid career people – Be Moderate ( more liabilities, commitments) HNIs – A balance of Moderation and Aggressiveness ( More Money) Financial Planning and Wealth Management

Self Employed/ Entrepreneurs/Traders
Investment – Own Funds/Borrowed Funds Average of Income Earned every month Insurance cover for business and personal needs Surplus funds on savings Funds for further investment in business Loan repayment Financial Planning and Wealth Management

Professionals Average earnings every month
Loans for setting up Professional Practice and its repayment Monthly commitments Surplus savings Fund for further investment Investment in Real Estate Sole proprietorship/ Firm/Company Financial Planning and Wealth Management

Others – Students, Housewives, Retired Individuals etc
Housewives and Retired individuals should choose investments that are safe, followed by returns and liquidity. Tax saving aspect of the investment is less important Students should invest in very safe securities that can also yield them high returns, liquidity and tax saving aspects can be given lesser importance Financial Planning and Wealth Management

A way to plan Where Am I Now? Where Do I Want to Go?
A Plan is a Must! Where Am I Now? Net Worth (Assets – Liabilities) Personal Budget Where Do I Want to Go? Goals and Objectives Major Purchase, Children’s Education, Retirement, Marriage, Vacation How Do I Get There? Recommendations and Implementation The Plan! Financial Planning and Wealth Management

Categorizing Financial Planning
Tax Planning Insurance Planning Retirement Planning Estate Planning Investment Planning/Wealth Management Financial Planning and Wealth Management

Tax Planning Financial Planning and Wealth Management

Financial Planning and Wealth Management

Tax Saving Sections Section Quick Description Limit 80 CCC
Pension Products Maximum Rs 1 lakh deduction for 80 C, CCC and 80 CCD put together 80 CCD C. Govt Employees Pension scheme 80D Premium Paid on Medical Insurance for Family and Parents Deduction between Rs 15,000-20,000, additional deduction of 15,000 for parents and Rs, 20,000 if they senior citizens 80 DD Maintenance and medical treatment of disabled dependent Deduction upto Rs 1 lakh 80 DDB Treatment of Certain disease or ailment Deduction upto Rs.60,000 80U Physically Disabled Assessee Financial Planning and Wealth Management

Tax Saving Sections Section Quick Description Limit 80G
Donation to certain charitable fund, institutions etc 50% to 100% of donation made subject to a max of 10%of gross annual income 80 GGA Donations for scientific research or rural development 100% deduction allowed to donations made to scientific research Sec 80GGC 80 GGC Donation to Political Parties Deduction upto Rs 60,000 80 E Interest Payable on Educational loan No limit for deduction 80 EE Interest payable on housing loan Additional deduction up to Rs 1 lakh 80 GG For paying rent in case of no HRA Deduction upto Rs,24,000 80 CCG RGESS Deduction upto Rs 25,000 (50% of amount invested) 80TTA Interested received in Saving Bank Account Deduction upto Rs 10,000 Financial Planning and Wealth Management

Invest in Equity Scheme and Save Tax
80CCG: Investment under any Equity Saving Scheme Eligibility: Individual Acquires listed equity shares/ units in accordance with the central government notified Scheme i.e Rajiv Gandhi Equity Savings Scheme, maximum deduction: 50% of amount invested or Rs 25000/- whichever is less. Financial Planning and Wealth Management

Insurance and Health Planning
Our risks include Our Lives Medical Contingencies Assets Insurance Planning the 1st Step Opting for adequate life insurance cover is essential Insurance requirement to be reviewed every 2 years Insurance secures our Future Finances Loved Ones Financial Planning and Wealth Management

Types of Life Insurance Policy
Term Insurance Whole Life Policy Endowment Policy Money Back Policies Annuities and Pension Unit Linked Insurance Plan Postal Life Insurance Riders: Comprehensive Coverage Financial Planning and Wealth Management

Postal Life Insurance (PLI)
Covers employees of Central and State Governments, Central and State Public Sector Undertakings, Universities, Government aided Educational institutions, Nationalized Banks, Local bodies etc. Officers and staff of the Defence services and Para-Military forces Upper limit Rs 10 lacs all schemes put together Offers Single as well as Group Insurance The policy can be assigned to Financial Institutions for taking loan. Issue of Duplicate Policy Bond in case of the original Policy Bond is lost Intra conversion of policies allowed Financial Planning and Wealth Management

Postal Life Insurance (PLI)
PLI offers 7 (Seven) types of plans: Whole Life Assurance (SURAKSHA) Convertible Whole Life Assurance (SUVIDHA) Endowment Assurance (SANTOSH) Anticipated Endowment Assurance (SUMANGAL) Joint Life Assurance (YUGAL SURAKSHA) Scheme for Physically handicapped persons Children Policy Financial Planning and Wealth Management

Rural Postal Life Insurance (RPLI)
RPLI offers following types of plans: Whole Life Assurance ( GRAMA SURAKSHA) Convertible Whole Life Assurance (GRAMA SUVIDHA) Endowment Assurance ( GRAMA SANTOSH) Anticipated Endowment Assurance (GRAMA SUMANGAL) GRAM PRIYA Scheme for Physically handicapped persons Min Sum Assured Rs.10,000 & Max Sum Assured Rs.3,00,000/- Max age limit of entry is 55 years in case of Whole Life and Endowment Assurance while it is 45 years otherwise. All the schemes have compulsory medical examination. For the non-medical policies, the maximum limit of Sum Assured is Rs.25,000/-, and maximum age is 35 years. Non-standard age proof for Rural PLI policies, the maximum age limit is 45 years Financial Planning and Wealth Management

Points on PLI Salaried professionals in Private Sector are not eligible but they can have RPLI policies subject to fulfilling other conditions. If one spouse is working in a Government Organization but the other is not, there is 'Yugal Suraksha' scheme under which both can jointly get a policy If one quits the Government service, one can continue by making payment at any one of the 1, 55,000 post offices throughout the country If the premia are not paid for 6 months in case policy is in currency for 3 years (or) 12 months in case policy is more than 3 years old, then the policy becomes void. No Home Loan available Revival shall not be allowed on more than two occasions during the entire term of the policy. One forgets to pay one’s premium in a month, then one can pay the premium in the subsequent month, by paying a minimum fine of Re. 1/- per hundred of sum assured. Surrender value depends on the surrender factor and type and term of policy Financial Planning and Wealth Management

Who can become Insurance Brokers?
Anyone Professional opportunity for Chartered Accountants CAs can also take up this role given their understanding of the benefits of the insurance and client base and interaction Chartered Accountants advice is much valued upon Financial Planning and Wealth Management

Retirement Planning Allocation of finances for Retirement
No Government sponsored retirement plan Nuclear Families Unforeseen Medical expenses Estate Planning The Flexibility to Deal with Changes Systematic investment every month is a way to a tension free healthy retirement. Financial Planning and Wealth Management

Retirement Planning - Steps
Decide of age for retirement Annual income need for retirement years Current market value of all the savings and investments Determine a realistic annualized rate of return Consider company pension plan if any Now compute the value required on retirement Financial Planning and Wealth Management

Retirement Investment Options
Public Provident Fund (PPF) National Savings Certificate (NSC) Employees Provident Fund (EPF) Mutual Fund Products Insurance Products New Pension Schemes Reverse Mortgage Financial Planning and Wealth Management

Traditional Retirement Insurance Schemes
Bajaj Allianz – Suvarna Vishranti ING Vysya – ING New Best Years ICICI Pru – ICICI Pru Forever Life HDFC Life – Classic Pension Plan Metlife – Met Pension-Par Kotak Life – Retirement Income Plan SBI Life – Lifelong Pension Plus (NP) Financial Planning and Wealth Management

Traditional Retirement Insurance Scheme
Tata AIG – Life Nirvana Aviva – Pension Builder Sahara Life – Sahara Amar Jeevan Bharti Axa – Wonder Years Retirement Plan Future Generali – Pension Plus Aegon Religare – Pension Plan IDBI Federal – Retiresurance Guaranteed (NP) Birla Sunlife – Secure 58 Plan (NP) Financial Planning and Wealth Management

Estate Planning Accumulating and Disposing of an estate to maximize the goals of the estate owner. Distribute wealth to a certain beneficiary or beneficiaries to whomever the owner wishes. Important to take the help of an attorney experienced in estate law Financial Planning and Wealth Management

Estate Planning Objectives
Asset transfer to beneficiaries Tax- effective transfer Planning in case of disabilities Time of distribution can be pre-decided Business succession Selection of Trustee or guardian or the executor Financial Planning and Wealth Management

Steps and Tools in Estate Planning
Listing of assets and liabilities Open family discussion on selecting the guardian Update the current beneficiaries like life insurance Decide upon the distribution of the assets on death Funeral arrangements with spouse and family Assistance of an estate planning authority Tools Life Insurance Will Trust Financial Planning and Wealth Management

Documentation Power of Attorney Wills Title Deed Trust Deed
Partition Deed Gift Deed Insurance Papers Financial Planning and Wealth Management

Wealth Management Elements of Wealth Management Asset Allocation
Financial Planning and Wealth Management

Investment and Wealth Planning
It is all about weaving an investment net with Equity Fixed Income Deposits Post Office Schemes Gold Commodities Currency Financial Planning and Wealth Management

Investment and Wealth Planning
Derivatives Mutual Funds Exchange Traded Funds Real Estate Alternative Investment Investment Options for Non-Resident Indians Financial Planning and Wealth Management

The Right Asset Mix Asset mix is the balance between stocks, bonds and cash, returns and risk level monitor Stocks - greater growth & greater volatility Gold – the bumper crop Mutual Funds – the fund equalizer EFTs – the norm Real Estate – the cash cow Financial Planning and Wealth Management

Life Stage and Right Asset Mix
Cash 0% Stocks 65% Bonds 35% Life Stage 2 5% 50% 45% Life Stage 3 10% 25% Financial Planning and Wealth Management

Portfolio Management – A Balance
Containing all the asset classes in well balanced proportion. Example of well balanced portfolio. – Equity 30% – Debt 30% – Gold 10% – Real Estate 30% Find the best that suits you! Financial Planning and Wealth Management

Asset Allocation - Equity
Comprises of – Shares & Stocks Variety – Blue Chip, Growth Stocks, Income Stocks, Cyclical Stocks, Defensive Stocks, Speculative stocks Advantage – Greater returns, diversification, liquidity, information, tax benefits, appreciation, dividends, pledge, voting Regulator – BSE, NSE, Markets – Primary & Secondary, Online Trading Investors – Retail Institutional Investors, Non Institutional Investors, Qualified Institutional Buyers Financial Planning and Wealth Management

Asset Allocation – Gold
India is the largest market for gold in the world Total consumer demand in India stood at US$ million for 12 months ended Q1 2012 International Currency Why invest in Gold?? Diversification Low Liquidity Risk Hedge against Inflation Good Returns Low Credit Risk Safe Haven Investment Financial Planning and Wealth Management

Asset Allocation – Gold
Avenues of Investment Jewellery Gold Coins Gold Bars ETF Global Mutual Fund Gold Fund of Fund Gold Derivatives (Futures) through MCX E-Gold Gold Accumulation Schemes/Savings for Gold Scheme Gold Deposit Scheme Financial Planning and Wealth Management

Asset Allocation – Fixed Income
Types – Government Securities, Public Sector Bonds, Private Sector Bonds Varieties – Government Guaranteed Bonds, Zero Coupon Bonds, Treasury Bills, STRIPS, PSU Bonds, Commercial Paper, Debentures, Floating Rate Bonds, Inter Corporate Deposits, Certificate of Deposits Status of Holding – Investors are Creditors to the Issuer Market – Debt Market (WDM, RDM, G-secs) Types of Trade – Outright Sale or Purchase, Repo Trade Regulator - RBI Financial Planning and Wealth Management

Money Market Instruments
Certificate of Deposit (CD) Commercial Paper (C.P) Inter Bank Participation Certificates (IBPC) Inter Bank term Money Treasury Bills Bill Rediscounting Call/Notice/Term Money Financial Planning and Wealth Management

Commercial Papers Are short term borrowings by Corporates, FIs, Primary Dealers (PDs) from Money Market CP when issued in physical form are negotiable by endorsement and delivery Issued subject to min 5 lacs and in multiples of 5 lacs thereafter Maturity 15 days to 1 year Unsecured and backed by the credit of the issuing company Any private or public sector companies willing to raise money through the CP market has to meet the following requirements Financial Planning and Wealth Management

Private Banking Classification of bank deposits
Savings Bank Account Current Deposit Account Fixed Deposit Account Recurring Deposit Account Fixed Deposit interest rates in India vary anywhere between 7.00 % to 9.25% Monitoring maturity dates Policy Changes by RBI Financial Planning and Wealth Management

Asset Allocation – Post Office Schemes
Post Office Savings Account Post Office Recurring Deposit Account Post Office Monthly Income Accounts National Savings Certificate (VIII Issue) Kisan Vikas Patra Senior Citizen Saving Scheme (SCSS) Public Provident Fund Scheme Deposit Scheme for Retiring Government Employees Deposit Scheme for Retiring Employees of Public Sector Companies Financial Planning and Wealth Management

PPF – Public Provident Fund
Minimum investment per financial year in PPF is Rs 500/- and w.e.f the maximum limit has been raised to Rs 1 lakh Not more than one PPF account in one’s name PPF a/c can be extended for any number of times after the expiry of its tenure of 15 years. The extensions will be for the block of 5 years. Interest rate in PPF announced every year in April. Nomination facility is available in PPF PPF has 15 years lock-in but you can get a loan and also opt for premature withdrawal after a certain period of time. Financial Planning and Wealth Management

PPF – Public Provident Fund
No HUF or association of person is allowed to open PPF a/c. Non Resident Indian (NRI) cannot open a new Public provident fund account in India. The PPF scheme is operated through Post Office and Nationalized banks. Pvt Banks like ICICI bank offers this account. Deposits are exempt from wealth tax. The balance amount in PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability, Financial Planning and Wealth Management

Asset Allocation - Commodities
Allow a portfolio to improve overall return at the same level of risk Who should invest? Any investor who wants to take advantage of price movements A kicker (side card) in the portfolio Financial Planning and Wealth Management

Commodity market in India clocks a daily average Turnover of Rs 120 – 150 billion (Rs 12,000 – 15,000 crores Forward Markets Commission Regulates commodity trading Demand and Supply factor and Inventory drive the commodity market Financial Planning and Wealth Management

Major Categories of Commodities Traded Industrial Metals Precious Metals: Bullion Agricultural Commodities Energy Commodities Commodity Spot Market Offers effective method of spot price discovery Processors, end users. exporters, corporate procure agri produce from here Helps in Futures exchange Promotes grading and standardization in agricultural produce Financial Planning and Wealth Management

Commodities are traded in National Spot Exchange (NSEL) NCDEX Spot Exchange (NSPOT) Commodities Derivative Market A derivative instrument whose value is derived from the underlying commodity Example: an investor can invest directly in a steel derivative rather than investing in the shares of Tata Steel Financial Planning and Wealth Management

Where do I need to go to trade in Commodity Futures? National Commodity and Derivative Exchange (NCDEX) Multi Commodity Exchange of India Ltd (MCX) National Multi Commodity Exchange of India Ltd (NMCE) ACE Derivatices and Commodity Exchange (ACE) Indian Commodity Exchange Limited (ICEX) Financial Planning and Wealth Management

Major categories of commodities one can trade Vegetable Oil Seeds, Oils and Meals Pulses Spices Metals Energy products Vegetables Fibres and Manufactures- Cotton Other – Gaurseed, Guar, Gum and Sugar Financial Planning and Wealth Management

Asset Allocation – Currency
While trade in international, currencies are national Exchange rate is affected by the suppy and demand for the country’s currency in the international forex market Trading in Currency Futures allowed on 3 exchanges Multi Commodity Exchange – Stock Exchange (MCX-SX) National Stock Exchange (NSE) United Stock Exchange (USE) Financial Planning and Wealth Management

Asset Allocation – Currency
Currency Options are contract that grant the buyer of the option the right and not the obligation to, to buy or sell underlying currency at a specified exchange rate during a specified period of time USD-INR Option European Call & Put Options Financial Planning and Wealth Management

Asset Allocation – Derivatives
Financial contracts which derive their value from a spot price called the underlying Derivative Instruments traded are Futures and Options Derivative Exchange/Segment function as a Self Regulatory Organization and SEBI Acts as the oversight regulator Futures contracts, Index Options, Stock options, Stock Futures, Mini Derivative contract on Index, Long tenure Index Option contracts, Volatility Index, Bond Index and Exchange traded Currency Derivatives are permitted by SEBI Financial Planning and Wealth Management

Asset Allocation – Mutual Funds
Equity Linked Savings Scheme Arbitrage Funds Dynamic Funds Fixed Maturity Plans International Mutual Funds Monthly Income Plans Multi Cap Funds Quant Funds Financial Planning and Wealth Management

Asset Allocation – Real Estate
Guidance on Purchase of Property Planning and Budgeting Research Home Loan Safety points in the Home Agreement Home Insurance Real Estate Investment Includes Agricultural Land Farm Houses Urban Land House Property Commercial Property Financial Planning and Wealth Management

Asset Allocation – Real Estate
Real Estate Investment Options in India Investment in Real Estate Stocks Investment in Property Financial Planning and Wealth Management

Unique characteristics of Real Estate
Durability Heterogeneous High transaction costs Long time delays Both an investment good and consumption good Immobility Financial Planning and Wealth Management

Home Buying Tips from Start to Finish
Identifying Your Needs Independent House or Apartment Budget Number of rooms and bathrooms Approximate Area Proximity to work place, school etc Parking availability Water supply, power back up etc Furnished/unfurnished Connectivity Vicinity to market Special amenities such as club house, pools or spas. Available utilities such as cable or DSL, satellite. Sewer, cesspool or septic connections Financial Planning and Wealth Management

Finance Own funds Loan from Banks/HFCs Funds from your employer Loan against assets Provident Fund Loan Scouting for property Brokers Newspapers Websites Word of mouth Financial Planning and Wealth Management

Cost Estimate Purchase Price Stamp duty Registration charges Khata transfer charges Utility Deposits like Water connection deposit, Electricity connection deposit, etc. Other incidental expenses Talk to Banks/HFCs Loan Amount Loan Eligibility Terms and conditions of loan Interest Rate Borrowing costs like processing fee, commitment charges, prepayment penalty, etc. Loan tenures and EMI Time taken for sanctioning the loan Time taken for disbursing the loan Freebies and corporate offers Financial Planning and Wealth Management

Short listing Properties • Site or property visit • Speaking to the neighbors or occupants • Clear marketable titles • Credibility of the seller • Quality of the construction • Legal verification • Monthly payouts like maintenance charges, society charges, etc. • Municipal taxes or property taxes Finalizing the Deal • Negotiate on price and timing of payments ( upfront / installments) Press for price negotiation if there are any modifications /repairs /painting to be done Do not forget to collect all original property documents from the seller Before paying the seller, make sure he has fulfilled all his commitments and promises If the transaction involves a broker, withhold some amount of money until he delivers as promised Financial Planning and Wealth Management

Documents required when the property is purchased from a builder An allotment letter from the developer on paying the booking amount Agreement for Sale Documents required to be checked if you are buying a resale flat For flats being purchased in a registered co-operative society For flats being purchased in an unregistered society or flats originally allotted by a Development Authority Check the credentials of your new property Invitation of Claims Search at the Sub-Registrar's Office Enquiry at Municipal Corporation Enquiry with the Ward office If the owner of the property is deceased Financial Planning and Wealth Management

Property Documents to be collected from the Seller In case of a direct purchase from a builder 1. Copy of Agreement for Sale. Copy of Registration Receipt. Copies of receipts of payment already made. NOC from builders. In case of direct allotment in a Co-operative Housing Society 1. Allotment letter. 2. Share certificate. 3. Society registration certificate. 4. Copy of sale/lease deed in favour of the society. 5. NOC from society Financial Planning and Wealth Management

In case of direct allotment in a Co-operative Housing Society by Public Agency 1. Allotment letter, Share certificate, Society Registration certificate. 2. Lease Agreement. 3. Public agency's approved list of members. 4. NOC from Public Agency in favour of bank/HFC 5. NOC from society. In case of Public Agency's allotment to individuals Allotment letter from Public Agency. Tripartite Agreement between the borrower, Bank/HFC and the Public Agency in the prescribed format. In case of resale Copy of all previous vendors' registered documents along with copy of your purchase agreement duly stamped and registered and the registration receipt wherever applicable. Financial Planning and Wealth Management

Purchase of rentable properties Location Numbers High home prices Low maintenance buildings Ask to see the rental history Owner/Manager out of the country Financial Planning and Wealth Management

A Buyers/Tenants Checklist Check if Use of Property would amount to Change of Land Use Check if Non Residential Activity in Residential Premises Is Permissible Check if the Municipal Guidelines allow Mixed Use Certain Professional Activity permissible in Residential Areas Check if the Building adheres to the Sanctioned Plan Financial Planning and Wealth Management

List of Documents Sale and Purchase of House/Building
Agreement for Sale of a House Agreement for Sale of Mortgaged House Agreement To Lease Of Land For Construction Of House Agreement for sale of a house when purchase money is to be paid in installments Deed of Conveyance of freehold property Deed of Conveyance where consideration is to be paid in installments Deed of Conveyance of Reversion Deed of Conveyance Subject to Right of Way Deed of Conveyance of an Interest in Property Financial Planning and Wealth Management

List of Documents Sale and Purchase of House/Building
Deed of Conveyance of a Part of the Building Sale Deed of Land with Building Deed in respect of Leasehold Land Deed of a House Sale deed by Liquidator in case of Voluntary winding up of a Company Sale by Official Liquidator of the company Sale of House by an Executor Appointed under Will Sale of Property to various Purchasers as Tenants in Commmon Sale of Property to various Purchasers in Different Portions Statement of Transfer of Immovable Property for Obtaining no-objection certificate from Appropriate Authority, Income Tax Department Form No 37-I Sale deed Financial Planning and Wealth Management

List of Documents Sale and Purchase of Apartment
Agreement for Sale of Apartment Agreement for sale of freehold property Agreement for sale of leasehold property Agreement for business centre Deed of Conveyance subject to mortgage Agreement for sale for Purchase of a Plot for Constructing Flats Financial Planning and Wealth Management

List of Documents Sale and Purchase of Apartment
Development Agreements by Landlords in favour of a Builder Deed of Conveyance of a property exclusive of a flat or floor in the building Agreement to be entered between a Promoter and Purchaser of a Flat Flat ownership Agreement Co-ownership Agreement Co Sign Agreement Financial Planning and Wealth Management

List of Documents Mortgage
Deed of Conveyance by Mortgage Deed of Conveyance in favour of Mortgage Mortgage deed Financial Planning and Wealth Management

List of Documents Gifts
Gift Deed Gift Of Land Focr Building A Temple Gift By Father To His Son Of Land With Mortgage Deed Of Gift Of Immovable Property Gift Of A House To The Daughter Gift Of Property For Specified Purpose Gift Of Immovable Property Gift Of A Piece Of Land Gift Of Property For Hospital Gift Of Property To Wife Financial Planning and Wealth Management

List of Documents Lease
Lease deed Lease Deed Of Land Lease Of Agricultural Land Lease Of A Building For Office Deed Of Surrender Of Lease Deed Of Renewal Of Lease Agreement For Building Lease Perpetual Lease Of A Land Lease Disguised As Licence Sublease Agreement Financial Planning and Wealth Management

List of Documents Cooperative Society
Deed of transfer in a co-operative society Surrender deed in a Co-operative housing society Agreement for sale of apartment in Co-op. Society Financial Planning and Wealth Management

List of Documents Tenancy
Tenancy Agreement/Rental Agreement Tenancy In The Form Of Letter By The Person Proposing To Take Premises On Rent Financial Planning and Wealth Management

List of Documents Other Agreements
Agreement for Transfer of Development Rights Package Deal Agreement for Sale of Flats in Bulk to a Purchaser Leave and licence agreement Relinquishment Deed Family Arrangement Deed Of Partition Between Co-Owners Deed Of Partition Between Members Of A Joint Hindu Family General Power of Attorney Special Power of Attorney to execute Sale Deed Parking Agreement Financial Planning and Wealth Management

List of Applicable Laws in Real Estate
CENTRAL LEGISLATIONS The Indian Contract Act, 1872 The Majority Act, 1875 The Indian Evidence Act, 1872 The Transfer of Property Act, 1882 The Easement Act, 1882 The limitation Act, 1963 The Indian Stamp Act, 1899 The Registration Act, 1908 The Specific Relief Act, 1963 Financial Planning and Wealth Management

The Land Acquisition Act, 1894 The Consumer Protection Act, 1986 The Arbitration & Conciliation Act, 1996 The Income Tax Act, 1961 The Wealth Tax Act, 1957 The Co-operative Societies Act, 1912 The Multi-State Co-operative Societies Act, 1912 Finance Act in relation to Service Tax The Foreign Exchange Management Act, 1999/ Foreign Direct Investment Guidelines (FDI) SEBI norms for Real Estate Mutual Funds Competition Act, 2002 Financial Planning and Wealth Management

The Land Acquisition, rehabilitation and Resettlement Bill, 2011 Special Economic Zone Act, 2005 The Public Premises( Eviction of Unauthorised Occupants) Act, 1971 The Warehousing ( Development and Regulation) Act, 2007 Indian Succession Act 1925 Financial Planning and Wealth Management

Investment Planning – Private Equity
Venture Capital Replacement Capital Buyout Special Situation Risk of investment through PE Role of Stock Market Financial Planning and Wealth Management

Investment Planning – Alternate Investment
Rare Coins and Paper Currency Stamp Collection Art Antiquities Wine Financial Planning and Wealth Management

Investment Options for NRIs
Deposit Schemes Investments in Securities and Debt Investment in Mutual Funds Investment in Immovable Assets Investment in Tax saving options Financial Planning and Wealth Management

FINANCIAL MARKET A financial market is a market in which people and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Financial Planning and Wealth Management

TYPES OF FINANCIAL MARKETS
Capital Market (Both Stock and Bond Markets) Commodity Market Derivative Market Future Market Forex Market Money Market Insurance Market Financial Planning and Wealth Management

Financial Planning and Wealth Management

Types of Investor Wealth Creator Speculator Hedger Arbitrageur Trader

India’s Growth Story India – Most favored destination for overseas companies $ 1 trillion economy – Taken 60 yrs Next one trillion will take only 6 years Provides tremendous prosperity amongst Indians Urgent need for professionals to capture this rapid growth Huge opportunity for CA’s in this scenario Financial Planning and Wealth Management

Jargon Of Equity Market
Security Bond Stock 1) Common stocks 2) Preferred stocks Share Mutual funds. Par value vs. Market value BULLISH vs. BEARISH Financial Planning and Wealth Management

Functioning of Stock Market
Stock exchanges Brokers Registrars Depositories and their participants Securities and Exchange Board of India (SEBI) Financial Regulators SEBI RBI Ministry of finance Financial Planning and Wealth Management

Importance of Capital Market
Major source of finance for trade and industry in India Important external source for meeting funding requirements Facilitates Transfer of Capital Provides liquidity Transaction price provides a measure of the value of the asset Financial Planning and Wealth Management

Role of Capital Markets
Mobilization of Savings & acceleration of Capital Formation Promotion of Industrial Growth Raising of long term Capital Ready & Continuous Markets Proper Channelisation of Funds Provision of a variety of Services Financial Planning and Wealth Management

Functions of Capital Market
Disseminate information efficiently Quick valuation of financial instruments Provide insurance against market risk or price risk Enable wider participation Provide operational efficiency through - simplified transaction procedure - lowering settlement timings and - lowering transaction costs Financial Planning and Wealth Management

Capital Market – Reforms
Screen based Trading through NSE Capital adequacy norms stipulated Dematerialization of Shares - risks of fraudulent paper eliminated Entry of Foreign Investors Investor awareness programs Rolling settlements Inter-action between banking and exchanges Financial Planning and Wealth Management

Reforms – Post 2000 Corporatisation of exchange memberships
Banning of Badla / ALBM Introduction of Derivative products - Index / Stock Futures & Options Reforms/Changes in the margining system STP - electronic contracts Margin Lending Securities Lending Financial Planning and Wealth Management

Role in Capital Market Equity Analyst Media Tracker
As an internal control specialist As an taxation expert As an international Accounting Standards Convergence specialist As an internal auditor Financial Planning and Wealth Management

Role in Capital Market Investment advisor
Profiling and Positioning of the business Formulating Financial Strategy and efficient capital structure Due Diligence Portfolio Structuring and management Financial Services Marketing Financial Planning and Wealth Management

Role in Capital Market Market Analysis Auditor
Developing capital market communications Risk management Investment Banker Fund Manager Equity Trader Research Analyst Valuation Financial Planning and Wealth Management

Internal Audit of Market Intermediaries
Investment bankers Underwriters Stock exchanges Registrars Depositories Custodians Portfolio managers Mutual funds Primary Dealers / Satellite Dealers Self regulatory organizations Financial Planning and Wealth Management

Documentation pertaining to Financial Markets
Risk Disclosure Documents Contract Notes Internal Audit Report Financial Planning and Wealth Management

Arbitration in Financial Markets
Arbitration - Alternative dispute resolution mechanism provided by stock exchange Resolving disputes between trading members and their clients in respect of trades done on the exchange Every exchange - Panel of Arbitrators Option to Choose Arbitrator – Investors/Broker In case of disagreement - Exchange shall decide upon the name of arbitrators. Financial Planning and Wealth Management

Lessons on Wise Investing
Invest only in Fundamentally Strong Companies Read Carefully Follow Life Cycle Investing Invest in IPO Learn to sell Deal with Registered Intermediaries Let not greed make you an easy prey Do not Over-depend on Comfort factors – IPO Grading Avoid blind decisions based on audited accounts Financial Planning and Wealth Management

Cheap shares are not necessarily worth buying Corporate Governance Awards – still have a thought Be honest Invest and do not speculate Don’t leverage on the market Beware of Media Advertisements Fixed guaranteed return schemes Grey market premium Sectoral Frenzies Companies where promoters issues shares and warrants to themselves Financial Planning and Wealth Management

Keep surplus funds in Fixed Deposits for longer duration especially when the interest rates are likely to fall in future FDs for smaller denominations come handy for immediate cash requirement Auto sweeps are a great way for fund availability cum savings Financial Planning and Wealth Management

Investor Awareness - Investor
Investor – One who commits money to investment products with the expectation of financial return Wealth Creator Speculator Hedger Arbitrageur Trader Financial Planning and Wealth Management

Basic Awareness Purpose of investment Investment options
Investment objectives Care before making investment Market watch after investing Exit at right time Financial Planning and Wealth Management

Need for Awareness To Raise Capital To Increase Market Exposure
To Increase Valuation To Increase Opportunity for Financing To Increase Opportunity for Strategic Acquisitions Share Liquidity Financial Planning and Wealth Management

Types of Risks Market Risk Industry Risk Regulatory Risk Business Risk

Portfolio Managers/Wealth Managers / Investment Advisors (IA) Regulation

Who can become Portfolio Managers?
Chartered Accountants Certified Financial Planners Chartered Financial Analyst Management Graduates with specialization in Finance Professional Opportunity for Chartered Accountants Chartered accountants are best suited for this role given their financial acumen and knowledge in tax and laws Financial Planning and Wealth Management

Investment Advisors Regulation in India
On January 21, 2013 SEBI issued The (Investment Advisors) Regulation 2013 These regulations shall come into force on the 90th day from the date of notification i.e April 20, 2013. Regulating the activity of Investment Advice Investment Advice – Advice on Investment Products and Financial Planning Regulation exempts number of intermediaries and intermediation activities from Registration Consultation on hedging and cash management services likely to be covered Financial Planning and Wealth Management

Investment Advisors (IA) Registration
Registration with SEBI as Investment Advisor (IA) Subject to fulfillment of certain basic Criteria Minimum educational qualification Affiliation with National Institute of Securities Market Financial Planning and Wealth Management

Regulation of Investment Advisors
Regulation imposes responsibility on IAs Fiduciary responsibility towards client Record keeping Suitability Appropriateness Code of Conduct Disclosures of conflict of interests Segregation of Activities other than investment advisory Payment of Commission Stock Brokers and Merchant bankers (exempted from IA registration) Are required to comply with provisions relating to Manner in which clients are to be boarded Investment advice is to be rendered Financial Planning and Wealth Management

Exemptions Any member of
ICAI, ICSI, ICWAI, Actuarial Society of India or any other professional body as may be specified by the Board, who provides investment advice to their clients, incidental to his professional service. Any stock broker or sub-broker registered under SEBI (Stock Broker and Sub-Broker) Regulations, 1992, Portfolio manager registered under SEBI (Portfolio Managers) Regulations, 1993 or Merchant banker registered under SEBI (Merchant Bankers) Regulations, 1992, who provides any investment advice to its clients incidental to their primary activity. Financial Planning and Wealth Management

Exemptions Any fund manager, by whatever name called of a mutual fund, alternative investment fund or any other intermediary or entity registered with the Board; Any person who provides investment advice exclusively to clients based out of India. Any representative and partner of an investment adviser which is registered under these regulations Any other person as may be specified by the Board. Financial Planning and Wealth Management

Registration Fees Every applicant shall pay non-refundable application fees of five thousand rupees (Rs. 5,000) along with the application for grant or renewal of certificate of registration. Applicants which are individuals and firms shall pay a sum of ten thousand rupees (Rs. 10,000) as registration/ renewal fee at the time of grant or renewal of certificate by the Board. A body corporate shall pay a sum of one lakh rupees (Rs. 1,00,000) as registration/ renewal fee at the time of grant or renewal of certificate by the Board. The above fees shall be paid by the applicant within fifteen days (15 days) from the date of receipt of intimation from the Board by a demand draft (DD) in favor of 'Securities and Exchange Board of India' payable at Mumbai or at respective regional or local office. Financial Planning and Wealth Management

Registration Procedure
The Applicant for grant of registration as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013 should make an application to SEBI in Form A the applicant will receive a reply from SEBI within one month. Financial Planning and Wealth Management

Capital requirement In Case of Body Corporates: Net worth of not less than twenty five lakh rupees (Rs. 25, 00,000) “Net Worth" means the aggregate value of paid up share capital plus free reserves (excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses, deferred expenditure not written off, including miscellaneous expenses not written off, and capital adequacy requirement for other services offered by the advisers in accordance with the applicable rules and regulations. In Case of Individuals / Partnership firms: Net tangible assets of value not less than one lakh rupees (Rs. 1, 00,000) Financial Planning and Wealth Management

What about existing investment advisers?
Existing investment advisers shall comply with the capital adequacy requirement within one year from the date of commencement of these regulations. Financial Planning and Wealth Management

Period of Validity Period of Validity of the Certificate is five years (5 years) from the date of issue. Renewal of Certificate: Three months before the expiry of the period of validity of the certificate, the Investment adviser may, if he so desires, make an application in FORM-A for grant of renewal of certificate of registration. The renewal application also dealt in the same manner as if investment advisor is applying for the first time. Financial Planning and Wealth Management

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