FAQ's

In simple terms, Wealth Management is for manage your wealth in such a manner that can create, maintain, appreciate, protect your wealth so that optimized & maximized return can be achieved to beat ever increasing Inflation.

Wealth Management can be used for different objects. It can be to create, manage, appreciate, protect wealth, for retirement planning, to achieve various financial goals, for managing expected & unexpected future fund outflow.

A layman can earn income only till certain age. It is not possible for any person to earn regular income throughout their life. Hence one should plan their investment in such a manner so that flow of income can remain the same even after retirement and one can able to maintain same lifestyle after retirement as it was before retirement.

We provide a full range of financial planning services for our clients. These services include planning for retirement, real estate, Insurance, Mediclaim, assets allocation in various categories i.e., Fixed deposit, mutual funds, equities, Tax consultancy, and other professional advisory service to ensure that you have comprehensive care across your financial life.

For financial advice to be truly valuable to you, it must be based on an appreciation for your individual circumstances and needs. We advise on many aspects of wealth management, helping individuals of widely differing financial resources or life stages.

We provide tailored solutions to our clients and offer advice on:

- Investment planning
- Retirement planning
- Protecting you and your wealth

Whatever advice you require, we build long lasting, trusted relationships with our clients. We try to understand client’s perception and develop the investment strategy accordingly.

Allocation of wealth in different category is most important in wealth management that includes real estate, equity shares, government bonds, debentures, mutual funds, fixed deposits with banks etc.

Each category requires different strategic approach for making right investment decision about percentage of asset allocation depending on risk appetite, expected future inflow & outflow, age and other earning source of the investor.

Major factors to be kept in mind while investing are:

1) Risk-return tradeoff that links high risk with high rewards. The appropriate risk-return tradeoff depends on a variety of factors including an investor’s risk tolerance, investor’s years to retirement. Time also plays an essential role in determining a portfolio with the appropriate levels of risk and reward.

2) Investor should understand what exit routes are available to them and create an exit strategy well in advance that will help minimize losses and lock in profits. It is advisable to invest in an asset with low lock in period since high lock in period often possesses high risks and low liquidity.

Major challenges faced by investors are

- Firstly Lack of availability of time for market research and periodic review on investment and

- Secondly Lack of expertise and knowledge for taking research based investment decision.

Investment research is an endless process of gaining and applying new knowledge for the purpose of generating sizeable returns and taking better-informed decisions.

- With fast changing markets and business models, research based investments helps to assess viability of investments and thus assists in staying ahead of market trends.
- There is little time for any investors or businessman to do economic research in order to understand current and future market trends, finances, operations, and impact of government regulations.
- Research based investments has the potential for higher returns as they are based on fundamentals, strategy and technical research

Wealth management involves using a variety of aspects to not only manage your wealth but also to align with your family’s needs. Generally people avoid term insurance and Mediclaim however these two aspects are of great importance in wealth management. A life insurance plan acts as a savior that protects your family against unfortunate events. Term plan of earning person is very much essential to insure family with adequate financial protection in the absence of earning members. Mediclaim at the same time is also crucial aspect especially in post covid era, Healthcare costs are most difficult to forecast given its unpredictable nature that can disturb the entire financial planning of family.

If you want an optimum return, insurance and investment should be separated, so that one can get an optimum return in insurance as well as in investment.

In simple terms, a mutual fund is a common pool of money in which investors put in their contribution. This collective amount is then invested by the expert Fund Manager according to the investment objective of the fund.

The money could be invested in stocks, bonds, money market instruments, gold, real estate and other similar assets. These funds are operated by expert fund managers, who by investing in line with the specified investment objective attempt to create growth or appreciation of the amount for investors.

There are numerous benefits of mutual fund as under :

(1) Diversification
One of the most prominent advantages of investing in mutual funds is diversification. Diversification helps to reduce the risk associated with different asset classes. Your fund is invested across the stock of various companies, across various sector, across all market cap and other assets also thus minimize the risk factor associated with particular company sector & assets.  Fund is invested in a mixture of assets according to one’s risk appetite.

(2) Professional Management
Many investors do not have the time or resources to conduct their research and purchase individual stocks.  A fund manager continuously monitors investments and adjusts the portfolio accordingly to meet its objectives.

(3) Tax Benefits
Tax benefits associated with particular kind of mutual fund is an added advantage. Major difference from taxation perspective as compare to other investment is in Mutual fund capital gain (Difference between Sale value & Purchase Value) is taxable only in the year of redemption/ sale whereas in other investment tools, accrued interest is taxable every year irrespective of credited in bank account or not.

Capital gain on Equity oriented mutual fund is taxable at 10% only after taking benefit of Rs. 1 Lakh exemption under the Income-tax Act. Benefit of Indexation is available in some classes of Mutual fund etc.

(4) Well-regulated
All mutual funds are regulated by the capital markets watchdog Securities and Exchange Board of India (SEBI). All mutual fund houses are required to follow the various regulations as laid down by SEBI. This, in turn, protects the interests of the investors. Moreover, SEBI makes it mandatory for all mutual funds to disclose their portfolios every month.

Type of Mutual funds can be categorized from different perspective but in simple terms it can be classified as under:

Fund can be invested in mutual fund through Lump sum & SIP mode. Which mode of investment is to choose is depending upon individual case to case, timing of investment, fund size fund availability and many other factors? But investors have both options available for investing in majority of mutual fund schemes.

There are many on-line & off-line options available for investing in mutual fund schemes but it is highly recommend to invest through expert adviser as sometimes mere selection of incorrect option might be irreversible and investors have to bear consequences in future.

Demat account is not at all required for investing in Mutual fund. Holding mutual fund Units in Demat mode is absolutely optional, except in respect of Exchange Traded Funds. In fact, we highly recommend a common investor not to invest in mutual fund through Demat account as redemption and other folio medications have to be made through Demat only where as in physical mode, investor have many options of redemption, modification in folio.

Mutual fund investment is subject to Capital Market risk, Credit risk & other factors. Presently, many agencies assign star & ranks to various category of mutual fund schemes and publish this ranks in web portal, they also recommend to buy a particular schemes. But It is highly recommend to avoid investment based on such ratings without any research & methodology of ranks assigned. It is highly recommend to take Expert advice before investing in any schemes. Please also refer the view of legendary cricketer Sachin Tendulkar in below link.

https://youtu.be/jnJI6vp5b7o

It is absolutely False. Banks & other financial institutions are also working as Distributor of particular Mutual fund. These Banks & financial institutions have huge AUM targets and they are offered handsome commission & incentives for achievement of their targets. Just for their own wasted interest, they deceive a common man who have accumulated their hard earn life saving funds by investing in target based schemes.

No. Any Debt or Equity oriented Mutual fund schemes DO NOT give Fixed or Guaranteed returns. Mutual fund investment is subject to Capital Market risk, Credit risk & other factors. Historical returns of mutual fund does not necessarily guarantee of same return in future. An investor should seek Expert’s advice & should go through fact sheet of particular schemes before investing.

In simple terms, invest your fund directly in shares / stock of a particular company listed in recognized stock exchange is called investment in Direct Equity.

There are numerous benefits of Direct Equity as under:

(1)High return
Investment in Equity has high return potentiality. Return in Direct equity investment normally stands top amongst other mode of investment segments. To beat ever increasing inflation & to achieve financial goals, Investment in Direct Equity ranks first amongst other assets class.

(2)Risk
Equity share market tends to be the most volatile segment amongst other investment tools. Risk associated with stock market is usually the highest amongst other assets class. Stock market tends to react upward or downward sharply in response to any minor domestic, international events, news. Thus risk associated in equity investment is huge. So investing in direct equity is suitable only who is having very high Risk Appetite.

(3)Well-regulated
Bombay Stock Exchange (BSE) & National Stock Exchange (NSE) are recognized stock exchanges in India. Stock of all prominent companies are listed in above stock exchanges. Securities Exchange Board of India (SEBI) regulates Capital market & Stock exchanges in India. SEBI broadly forms various policies & regulations in the best interest of investors.

As explained earlier, both return & risk associated with Direct Equity is very high. A person should take research based decision before investing in particular stock of the company. There are many factors to be considered before investing in stock markets. Please refer video of CA DR Rajesh Khandol in below link.

“Major Factors to be considered before investing in Stock Market”

Gujarati
Part-1 https://youtu.be/ogcKcPeaucM
Part-2 https://youtu.be/fHMZetdKZSg

English
Part-1 https://youtu.be/GCaLQpgxFEI
Part-2 https://youtu.be/ZSPNoZjRkKQ

It is highly recommended to avoid investment based on tips without any study & research. There are many such agencies who offer buy & sell tips of a particular stock but investment in equity based on such tips are very risky & can deteriorate your wealth.

It is advisable to go through fundamentals of a particular company thoroughly, consider all factors and take expert advice before investing in direct equity.

It is conceptually a WRONG theory. First conceptual theory in stock market for long term investor is “Be QUICK in LOSS booking” & be LAZY in PROFIT booking”. Person usually follows totally a reverse theory. Taking an EXIT route is more important than taking an ENTRY route in Stock market. Please go though follow link for important conceptual tips for investment in stock market.

“Conceptual Tips for Investment in Stock Market”

Gujarati : https://youtu.be/oWNMniJhZtM

English : https://youtu.be/7Fo7ApCHUK0

Again it is conceptually a WRONG theory. It is human psychology to buy what is available at cheap price & not to quality product as it is a costly in price. The same theory applies in stock market also. Low or High market price is not a criteria while choosing a stock for investment in long term. Fundamental analysis & other factors as discussed above should be the criteria for picking up stocks.

Currently, Long term Capital gain (Holding period of stock is MORE than1 year) is taxed at 10% & Short term Capital gain (Holding period of stock is LESS than1 year) is taxed at 15%

Fundamental Analysis refers to review of Company’s Financial statements, (Balance sheet, profit & loss, Cash flow statement), Shareholding pattern, Management of the company, Debt Structure, Future prospects of the company, ROI, analyzing various ratios and other factors. Generally, fundamental analysis is helpful in investment with long term perspective. Investment in direct equity for a layman is recommended based on fundamental analysis.

Technical Analysis refers to identify opportunities by looking at statistical trends, movement in stock price & volume, derive a particular pattern and invest based on such data. Generally, Technical analysis takes a short -term approach of trading or short term investment. It has nothing to do with fundamentals of the company. Technical analysis is suitable for traders whose main objective is to take the benefit of volatility in stock market.

Term insurance is the simplest and purest form of life insurance. It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover (i.e. sum assured) at a relatively low premium rate.

It is important to maintain the life the life style of the entire family in the absence of one key earning members of the family and hence term insurance of that person is very important.

(1) Large amount of Life cover at affordable premium
It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover (i.e. sum assured) at a relatively low premium rate. Term insurance plan is the cheapest amongst other insurance products.

(2) Securing financial needs of family
A term plan keeps your family secure from financial challenges when they lost their earning members.

(3)Tax benefit
-Premium paid is deductible u/s 80-C of the Income-tax Act.
-Maintain claim is also exempt us/s – 10(10D) of the Income-tax Act.

No. You cannot get refund of premium amount already paid. Term insurance plan is a pure insurance product. Premium is paid to protect your life and not to earn out of it.

Yes. Though both are insurance products but, there is a conceptual difference between Term Plan & ULIP insurance products.

In simple terms Term plan offers only Insurance whereas ULIP offers Insurance + Return. Conceptually, both insurance & investment activity should be separated. Object of Insurance & investment are totally different and it should not be mixed with each other.

(1)TERM INSURANCE PLAN
Term insurance plan is a pure insurance product. It provided a life coverage. With term insurance, you can get a large amount of life cover (i.e. sum assured) at a relatively low premium rate

(2)UNIT LINKED INSRUANCE PLAN (ULIP)
ULIP provides both insurance & investment need of a person. Premium amount collected from policy holder is partly invested in various assets class viz. Mutual fund, Equity etc and partly invested as a premium. Policy holder get return as per the terms & conditions of the scheme and also get life coverage in case of an unwanted event occurs during the policy period. In ULIP, life coverage amount usually remains very low as compare to Term plan.