Lowe to many people and in many ways to complete my summer internship as well as in writing this report. I want to thank all those who have helped me (directly or indirectly) in completing this wonderful work. My deepest thanks to the Mr.
Kumar Abhinav (Director, Acumen Wealthcare Solutions Private Limited) who offered me to complete my internship from his company. He helped me to fill the gap between the theoretical and practical knowledge I want to thank him for sharing his company’s confidential reports as without which I wouldn’t have understood many of the problems in business. I would also like to thank my college for providing this opportunity to do my summer internship in the area of my interest. It helped me to fill the gap of my knowledge. I would also thank Dr. Ramachandran, who gave us the brief of writing the report and explained each small detail in the project writing. At last I would thank my sister who helped me in many at different stages of the internship. She shared her experience as a student and now as a professional.It helped me a lot as working in a company and putting your experience into words is a very difficult task. She helped me to overcome it and guided me to do it differently. *******THANK YOU ALL******* INTRODUCTION Acumen Wealthcare Solutions Pvt. Ltd. I did my summer internship from a wealth/ portfolio management company. The name of the company is ACUMEN WEALTHCARE SOLUTIONS PRIVATE LIMITED. It is a very small company and is only ten months old in the business. The company was started by Mr. Kumar Abhinav and Mr. Gautam Sinha (founder of TVA INFOTEC).The company is registered as a private limited company and has board of directors to supervise the work and advice from time to time. The company has two directors and they meet at least once in every quarter. The shares of the company are divided between Mr. Abhinav and Mr. Sinha. The major share holder of the company is Mr. Kumar with more than 75% shares with him and the rest is with Mr. Sinha. However Mr. Sinha doesn’t hold any official position in the company. He is one of the investor of the company and acts as an advisor to the company. The company has two directors mainly Mr.Kumar Abhinav and Mr. Prem Kishore Sinha. However the authorized signatory of the company is Mr. Kumar Abhinav. Mr. Abhinav has done his engineering from Pune University and then he worked with different wealth management companies in Bangalore. In addition to his engineering degree, he also hold some certificates such as AMFI, IRDA, Cash and derivative market, dealers certificate from NSC and BSC and many more. However the other director Mr. Sinha is a non profit director of the company. He is a professor in Magadh University and has depth knowledge of the financial products and financial tools.He is a certified financial planner and also has deep knowledge on the tax. The last board meeting of the company was held on 18th June, 2010. The non profit director means that Mr. Sinha is not libel to get any kind of remuneration from the company except his travelling and accommodation expenses whenever he comes for the board meetings and company visit. However it doesn’t means that he is only a statue in the company. His decisions are also as important as the decision of Mr. Gautam Sinha and Mr. Kumar Abhinav. The company was stared ten months back in a small office on Bannerghatta Road, Bangalore.And have recently (April) shifted their office on M. G. Road, Bangalore. This is their small success story. The current location of the company’s office is Acumen Wealthcare Solutions Private Limited 801, 8th Floor, Prestige Meridian -1 29, M. G. Road, Bangalore – 560076 The company has five employees and different levels. There are two people who are employed as relationship manager for the retail clients and there is one telecaller cum back office in charge. One employee is at the designation of corporate head who deals with the corporate clients only and also solely responsible for debt market. Then above all is the Mr.Abhinav himself who leads all the teams. The hierarchical structure of the company is very simple as the number of employees is very less. Both the relationship managers have to report to the Director directly. The back office in charge has to report to the corporate head as he is also responsible for the back office issues. At last the corporate head has to report to the Director. The same has been shown in chart. [pic] *Acumen’s current hierarchy structure The company is right now concentrating more on the client acquisition. The company’s goal is to convert their current brand name into an AMC (Asset Management Company).This is the strategy for the company for the future. In the current position company has more than two hundred clients including short term and long term investors. And these numbers are increasing day by day. The company manages the portfolio of their clients and helps them in securing their future in monetary terms. The company has all the financial products currently present in the market. They deal with life insurance, general insurance, mutual funds, equity market, commodity market, future options, currency market, NLDs, IPOs, NFOs, private FDs and risk analysis.The company has a variety of products from different companies. They have impalement with almost all the thirty nine AMCs present in India and with seven insurance companies. They have the corporate agency with Kotak securities for share trading. The company’s target for the financial year 2010 – 2011 is six million. Company believes that customer service is the best way to acquire and retain a client. The company have some very tough competitors such as Citi financial, Tata capital, Pink money, Aditya Birla money etc. Still the company is confident about its success. PRODUCT |COMPANIES | |LIFE INSURANCE |Reliance, Aviva, Kotak, ICICI Prudential, HDFC Standard Life, | | |Birla Sun life, SBI Life | |MUTUAL FUND |All the 39 AMCs | |EQUITY |Kotak Securities(corporate agents) | |PRIVATE FDs |Mahindra finance, L&T finance, Tata finance | *the above table shows the companies that Acumen deal with for the corresponding financial product Learning’s: My main learning from the internship was to know the financial planning for the clients are done and how the approach that one should follow with the clients.I learned about almost all the financial products that are present in the market and also a detail comparison of the products. I also learned about the hidden charges of the companies and what to look for in a product to get maximum benefit from it. Now I know how each of the products is different from each other although they may look similar. I also did a detail study on the gold prices in India as well as in international market. We would discuss these in details in the later stage of this report. LEARNING OBJECTIVES & AGGREMENTS The purpose of internship in the company was to fill the gap between my theoretical and practical knowledge. There are different products of same type in the market but every product is different from each other.Every financial product may look similar but they are different from each other. In today’s scenario the market is very volatile and one have to choose the product very carefully, but for a layman the products are same and so it always happens that they take products that are non performer and end up is loss. Acumen is different from others as they have their own research team which at first take into consideration the clients need and their future plans and then only they come up with products that suit the individual. I wanted to learn these techniques of research as my goal is to become a financial researcher and also it is very helpful for an individual.As a financial researcher you evaluate the market condition and make the necessary changes in your product so that it performs better in the market. But to do this you have to have the knowledge of the current products in the market. One has to know the difference between all the products and how are they different from each other. As a financial researcher one should know how the company is benefited from the products and what should be the commission that should be given to the agents. The second main function of a financial researcher is to know where the money should be invested and what are companies where the money should be invested that will give optimum return and also the will secure the principle.With all the above intention in my mind I choose to do the internship in q wealth/ portfolio Management Company rather than doing any specialized company. Wealth Management Company takes care of all the financial need of a customer. They have impalement with all AMCs, insurance companies so that they could offer a range of products to the consumers. They can always give comparison of the products and so the clients have an option to choose from it. This is always beneficial as the clients have a variety of products from and always gets confused. The other portfolio management companies offer range of products only in mutual fund and not in insurance. Whereas Acumen has options in life insurance companies as well.This was the main reason to join Acumen for my internship and not any other wealth management firm. The main area of my work was to visit the clients along with the director and help the research team in the research. In addition to that I also had to prepare presentation for the clients. Before handling the presentation to the clients I have to present the same to the Director and explain the research work in detail. In addition to this I was asked to prepare a research report on the current prices of gold in India and worldwide. This report was necessary as they wanted to know the movement of gold and the reason behind it. It would help them in convincing the clients to invest in gold rather than any other commodity.This report was a very tiring job as it had involved lots of internet search for data and at the same time verifies the data and news from the AMCs and other related companies. However I learned that why the research is important and what can happen if the report is not correct. I worked in the marketing team under the supervision of the Director himself and also have worked with the research department on various stages of the internship. I have attended various training from the company. These trainings were given directly from the trainer or senior manager from the AMCs. I learned a lot in these trainings and now I can know how an AMC works and how they make money.I also came to know that the most important thing to look for before investing in a MF (mutual fund). What is a fact sheet and how to find the differences between the products of similar nature? Acumen’s objective is to provide clients with excellent services and advice them honestly for their financial planning. Their goal is to establish themselves as an AMC and have unique products in their portfolio. KEY RESPONSIBILITY AREAS I started my internship from 26th April, 2010 and it was ended on 26th June, 2010. The working hours were very stringent; I had to report to the office by 8:45 AM in the morning as the stock market opens at 9:00 AM. The time for leaving home was not fixed as I was directly working under the Director.My internship started with a very unusual experience, the director asked me to get the fact sheet of one of the product of Religare (MIP). I was shocked for a moment as I was hearing these things for the first time. Then he started laughing and told to sit with the dealer for few hours to get a glimpse of trading and said at EOD (end of the day) he would ask me few questions. The word dealer was not new to me as I am a regular player of stock market. The details of my experience at internship I have divided into three parts. € What was my daily routine at the firm? (as the job was very monotonous) € What I learnt from the firm? € The research report on gold price movement. My actual job starts at 9:00AM as soon as the stock market opens.The research report from Kotak used to come between 9:00 AM and 9:10 AM. I have to read through the report within 15 minutes and explain the same to the dealer as he was busy in trading. As per the dealer the main time for the intraday finishes within the first hour of the market opening. So he was very careful during this time. I observed throughout the internship that the dealer was not very keen on the research report provided by the Kotak securities. He always analyzed the market in his own way and takes the decisions. However, he was not a great help as he was very confined with his decisions and was not comfortable with sharing his thoughts and approach.I tried very hard to understand his approach but failed. However my main study area was the commodity market and there I wanted to learn everything. The commodity market opens at 10:15 AM and is very predictable market however one has to be very careful when trading as these markets specially precious metal market are highly dependent on the global markets. A slight change in the global market has a very high impact on the Indian market. I used to sit with the dealer till 12 o’clock. For the first full week I have sat with the dealer. After 12 o’clock I used to go with the director on meetings with the clients. Usually either the clients were HNI or Super HNI.HNI clients mean High Income Individuals and they are the main revenue generators for the firm. The definition of HNI changes from company to company. Every company has a benchmark for the HNI in terms of the HNI clients. For Acumen the any client whose net income is more than one million per annum are called as HNI. It was a great experience to meet these clients as most of them are on a very high position in their particular organization. And one more thing all these clients are masters of their own job but are not aware of the financial needs and planning. It was not very clear that when the meetings would get over. Usually we meet 3 clients in a day.By 7 o’clock we used to return to the office again and a meeting was held by the director for the next day planning and reporting for the day. He was a very calm person and doest shout at any one, however if a miss selling or false commitment was given to the client then he used to become furious. For him the objective was to acquire more and more clients but not at the cost of the old clients. He said it is very necessary to retain the clients as it is very easy to get business from them which actually save time and they can concentrate on other activities. After the first week I was asked by the director to spend more time on the other things rather than equity and commodity.In the second week apart from meeting the clients I have also gone through a lot of trainings organised by the Acumen for one of the new employee. The director asked me to attain these trainings as this would give me exposure to the available financial products in the market. These trainings helped me to understand the market in a better way. The second week got over in which there were intensive training sessions about the product. In the third week I was asked to the part of the research team of Acumen. This team is also headed by the director. What I felt was that the pressure on the sales team was immense to generate the revenue. The job of the research team was to analyze the client’s requirement of the client and then choose the best possible product for them.Once the product is chosen we also have to give the comparison of the competitor products in the market. We do this so as to make the client understand why we have chosen that particular product for him/her. This was I think one of the unique way to do the business as far as I know no one is practicing it right now. As a customer and a lay man, people are not able to differentiate between the products and often they choose the wrong one. The report making was easy but to research for the best suitable product was very difficult as you have to know the all the products in and out. This was a huge task for me as I only new few of them especially insurance. In this the director used o help me in selecting the product and then half of my job was done. This was the work I enjoyed the most as I have to explain the director why we have selected the particular product over the others. And when I give the correct reason he used t appreciate me. This made me feel proud. I did this research throughout my internship. I have now mastered the mutual funds but still I have to learn a lot in the insurance. A few times I was sent to meetings alone. But these were only retail clients. And to the surprise every time I went I have closed the mutual fund cases. It is actually very good experience to sell mutual funds and I learnt that the mutual fund is one of the best investment one should go for.After this the job was very monotonous until I was asked to give a presentation on the gold prices in India and also give the scenario of the world prices. I was asked to present this within a week. This was very interesting as I already said that I have interest in the commodity sector. And I was asked to research over the prices of gold. The research was only secondary and on few occasions I have to go to some of the AMCs to collect the data. However I cannot show the whole presentation here as I was told that I can mention it in my report but I cannot carry the whole presentation outside the company or put it in my internship report. So I have tried to put the details that I could remember and have put the same in the last part of this section.In this section we will discuss my detail understanding of the financial products. This doesn’t help only for my internship but is also very useful for the rest of my life. Now I know what one should look in an insurance policy before investing and how to select for a good mutual fund among the many present in the market. I would go in sequence starting from mutual funds followed by life insurance. € MUTUAL FUNDS: Mutual fund is a very good investment provided you have enough time to give to your portfolio. Else you should have a very good relationship manager to advise you on the products and above all you should be committed and ready to invest for a long term and willing to complete your term.There are different MFs (mutual funds) present in the market as per my knowledge one should diversify their portfolio and avoid taking same type of products. In mutual fund the companies pool out money from the retail investors and then invest in the equity market also called stock market. The AMCs (asset management companies) design the product and then they have to submit it to the SEBI (security exchange board of India) for approval. Once the product is approved by the SEBI then NFO (New fund offer) is issued. This is for a limited period of time. A NFO is put into the market and its NAV is Rs 10. However once you purchase this NFO your money will not immediately be invested in the market. The money will be invested only after the NFO is closed.Once the NFO is closed the AMC have to list the product in the stock market. Earlier the NFOs were not necessarily always listed in the market. Sometimes if the AMC feel that they have not collected enough funds then they don’t list the product and the consumers were at loss. However from 1st July, 2010 the SEBI has made it mandatory to list the product and within 10 days the NFO has to be closed and then listed. This is a very good move as the AMCs now cannot do whatever they want. It seems to be very easy but to design a product itself is a very hefty task. Once the product is designed then the fund managers have to decide the companies where the collected money should be invested.The only drawback of the NFO is that the investors will not come to know the fact sheet of the product. Fact sheet is the list of the companies that gives the information to the investors of the companies where the money will be invested. It is very necessary to know the fact sheet of a product as the performance largely depends on the fact sheet. However none of the customers bother to see the fact sheet or I would say that they don’t know about the fact sheet. Now another most important thing in mutual fund is the charges of the mutual funds. Earlier the mutual fund has to have entry load and exit load. The entry load was charged when one used to buy the product. It was one percent of the invested amount.Same way the exit load was charged when one used to sell the product but the exit load was charged on the profit or loss incurred and not on the fund value. The exit load was also one percent. However the entry load and exit load was removed by the SEBI from September, 2009. Now one doesn’t have to pay the entry load and exit load. Only the exit load is chargeable if we sell the product before one year. But if one sells the product after one year then the exit load is also not there. Apart from this there are some hidden charges that the AMCs charges and consumers are not aware of it. Apart from this there is a charge that ranges from 2. 25% to 2. 75% annually. This is called the fund management charge (FMC) and administration charge.This is the charge that the AMCs take for maintenance and to give out the salary and commission. The brokerage of the advisors has also come down drastically. When the entry and exit load was there the brokerage was 2. 25% but now it is almost nothing 0. 06%. That is why now individuals don’t sell MFs. However the brokerage can always be negotiated if the investment amount is large. There are almost thirty nine AMCs present in India and AVIVA is the only life insurance company that doesn’t have an AMC. The mutual funds can also be purchased in SIP mode (systematic investment plan). This is less risky if than the lump sum investment. This is because every month one purchases the MFs at a new NAV.If the market is down then we can purchase more number of units and thus gain in longer terms. However if the market is high then we can purchase less number of units. They other products are NLDs (nifty linked dividends), MIP (monthly income plan) and ELSS (equity linked saving scheme). € Life Insurance: Life insurance is to insure ones life. And still it is one of the best financial products. Only 2% of the total population in India is insured so one can imagine the potential in this product. However it is not very easy to convince people for insurance. However it is very beneficial for the advisors as they earn a very good commission. They can earn anything from 10% to 65% of the premium.For instance if one has taken an insurance and the premium amount is Rs one lakh, then the minimum that a advisor can earn is 10% of one lakh therefore Rs 10,000 and the maximum that an advisor can earn is Rs 65,000 for the first year. After the second year the advisors commission goes on decreasing and finally it is stable from the fourth year. From the fourth year the commission is fixed ie. 5% of the premium and goes on till the policy expires. So one can imagine the amount of money that an advisor can make by selling the insurance policy. However the IRDA (insurance regulatory and development authority of India) is now thinking of putting a cap on the commission structure so that the consumers can be benefitted from it. Usually the advisors in order to earn more they sell the wrong products and with false commitments.The ultimate looser in it is the consumers who purchase the product. It is very difficult to keep a check on the advisors as most of them are independent and are not on the company’s payroll. The life insurance companies do not only sell life insurance but also pension plans, ULIPS, child plan, term plan etc. Actually most of these products are similar. Except the returns are different in each of the product and also the sum assured is different. ULIP is one of the best products provided the customer completes its term. Generally the ULIPS are expensive but it gives very good return. Now the another thing that a customer should know before taking a life insurance plan is the charges that he/ she would incur.The charges of a life insurance product are FMC (fund management charge), administration charge, allocation charge, mortality charge, policy admin charge etc. These charges should be clear as it is usually not disclosed by the advisors. The most important thing after the above two is net yield of the product. Actually net yield is the actual rate of return. As per the IRDA rule an advisor cannot show return on a sheet of paper for more than 10% which is generally ignored by the advisors. The advisors show return on 30% which is obviously lucrative and customers fell for it. As per the IRDA ruling the advisor can show return only for 6% and 10% and all the charges should be mentioned on it including mortality charge. That is why it is advised to see the illustration before purchasing the insurance.And also the advisors skip the illustration as it reveals the truth. However it is mandatory to get the illustration signed by the customers. Net yield is the rate of return one will get after deducting the charges and taxes. The net yield should be in percentage term and should be less than 10%. The greater is the net yield the better is the products return and performance. However there is a catch point, when you sum up all the charges of the product and then compare with the net yield it won’t match. There will always be a difference of 0. 5% to 2%. The question is why there is a difference? This is the hidden charges of the company and even the advisors don’t have the answer.This is all that one should look for before investing in the life insurance. Gold the best game in town and when the music stops it may be the ONLY game in town that can yield any sort of return. The music I refer to here is the sound of spin given some measure of credibility (only to the un-initiated) by massive stimulus spending which has kept this farce of an economy on its last legs through various stages for 9 years. By: Neil Charnock Why do we claim that gold is the best game in town? Gold has outpaced all investment classes over recent years – meaning that it gold the leading investment class of this decade. Gold at record highs and has broken above resistance in USD but you have heard all that already.Gold real money and vital to the monetary system at the highest levels, it is real wealth and it is a real store of wealth. Gold the only substance on earth that is convertible to gold – “money” (currencies – bank notes and coins) are not. Even today many people do not realize that the currencies they are forced to use for transacting goods and services are backed by nothing except confidence and more paper. Gold bullion cannot be forged or printed; it cannot be won from the earth without honest effort and hard work. Gold is a major part of the cultures that are in the process of inheriting some of the power that the USA is losing at present.With vast pools of monetary reserves, manufacturing capacity, cheap labour and or oil reserves at their disposal – countries like China, India, Russia and those in the Middle East are in a unique position in this new emerging era. They love gold and we now have to face an era with a more powerful Islamic Banking system that loves gold too. Gold is their favourite commodity and money. The only way out for US citizens is to get capital out of the USA and or to get their USD’s away from the US banking system. This is best done by buying gold. Gold won from the earth by mining companies who are in a unique position in the economy at this time in history. They will become in essence, like a form of central bank churning out real money to be used to stabilize economies and currencies used for international trade.International trading partners of the mighty USA have had to suffer an imbalance of power since 1944 when the Britton Woods Agreement came into force. The USA was handed this privilege and responsibility because it held the most significant proportion of the global gold reserves at the end of World War 2. USD’s were originally convertible into gold on request however that all ended in 1971 when Nixon withdrew this function. They all said “GOLD IS NOT” but they were wrong and all history and common sense said so. Inflation of the money supply and the “great” modern monetary / banking experiment was here in full force. This was managed more covertly and expertly than any similar deeply flawed and dishonest monetary experiment in history.That is to say it lasted longer than any similar experiment to such a degree that the modern economic mantra became a new “truth” that even infiltrated education and common beliefs. As for the so called fantastic era of growth and prosperity, there have been many advances but also many disadvantages too. There is no doubt it was great while it lasted if you were the one with the food and a good job and nice car / house / holidays etc. But have we really had any meaningful growth in GDP in the Western economies? What about culture, human rights and other higher values revered by civilizations at their heights through history? Gold bugs adjust the current price of gold in inflation adjusted terms and quite rightly so.The peak of gold at US$850 per ounce in 1980 dollars can be conservatively shown to be equivalent to $3,000 in 2009 dollars. But how about adjusting GDP growth to reflect true inflation? Let’s face it 3% growth rates that have been considered strong and viewed in awe by some as unsustainable can be inflation adjusted to show a continuous depression for the last 20 years in the Western world. That is right – no real growth at all and this is absolutely sustainable. The real capital movement was from manufacturing to the finance sector, from the West to the East and Middle East, from the middle classes to the super rich and the power gradually shifted from the people to the Corporations.This is a type of shell game where the same particles are shifted around but nothing really changes. The populace gets the fleeting idea at times that they are like the white mouse running around in the wheel in the glass case getting nowhere. But they quickly shift this thought to the back of their mind and out of sight. House prices went up in the US and refinancing paid for massive purchases of widgets, houses, SUV’s, electrical equipment and concrete jungles in China and India but nobody really got any better off – they just went deeper into debt all the while, totally distracted by their new “wealth” as they lost their rights and values.Look where it all started and then where it went wrong for the common man and the middle classes of the Western World. The 70’s were marked by increasingly massive price inflation and fear that the USD would blow up in an unregulated roar – and it nearly did. Gold asserted itself once again at the end of the 70’s and history tells that it was put back in its box to suffer through the 80’s and 90’s in a controlled slumber. This part of history is fascinating if you want to research it. Please does it will assist your understanding of where and why we are here now staring into our own financial abyss? World power is shifting and respect for the once mighty USD is gone.The chance of writing off bank debts and clearing balance sheets is unfortunately gone too. Debt woes merely deepened and now interest alone costs the US over 5% of its GDP every year. Trader mentality – your first loss is generally your best loss but that is just too hard for some to swallow – “the song remains the same”. Government stimulus packages have given the banks some breathing space to rebuild and play the yield curve, trade – and write off some bad debt. It bought them time and it bought time for the populace and business to reduce debt too. Initially it was government capital injections that restored the bank reserves and liquidity but not enough for them to pass on via strong ending activity so the government had to fulfil this with cash for this and cash for that. The lack of lending capacity and activity – and the lack of a debt securitization market which allows the banks to shift debt to another party so that they can lend their allocations again all over again is the reason for this great jobless “recovery”. In such a tight debt market it is striking and highly significant to see the amount of money rose in the Australian gold sector since late last year. The smart moneyed sophisticated investors and banks are buying into this sector. They believe gold is a great investment in this highly risk adverse economic climate.For decades they considered the gold mining sector to be high risk. These stimulus packages are coming to an end near mid 2010 so where do we go then? The smart money is getting into gold and gold shares. The stimulus money is working its way through the system and this takes longer than most people and analysts think. How much new money has been created since the Dow first reached this level in April 1999? Answer is heaps – and heaps so inflation adjusted Dow is nowhere near the 10,000 it reached in 1999. The emperor is wearing a suit of nothing – he is nude and most people can see that and are waking up and scared and don’t know what to do.This is not the fault of Obama or Rudd (Prime Minister of Australia) or the other new leaders so don’t waste your time getting angry at them even if they are making some bad decisions. They are caught in between a rock and a very hard place with nowhere to turn. The gold prices in India are more unproductive as the retail market in India is also plays a very important in deciding the gold prices. On the eve of Akshay Tittiya the gold prices in India broke all the records of gold prices. The prices were above Rs 19k and still people were ready to buy it. It reflected the market prices and the next very day the MCX (multi commodity exchange of India limited) market price went off and reached beyond 19k. Just to see a comparison of gold prices the following chart shows a comparison among stocks, gold and bonds. *[pic] the above data and chart is taken from axis mutual fund. The above chart shows if a person has invested Rs 100 in December, 1994 then how it would have grown till the December, 2009. This gives comparison among the gold, stock market, and the bonds. The stock worth Rs 100 would grow up to Rs 440. The same goes with bonds which grows to Rs 505 and then comes the gold which grew up to Rs 427. The average of all the three products put together gives a return of Rs 540 which is above all the three products. It is clearly evident from the above the growth of gold. Now the following chart shows the growth of gold alone in the past nineteen years. The average price of gold has gone up by 11% per annum.But if we take the price of gold in the last few years especially since 2008. This was the period when the world was going through recession. The gold prices in India were Rs 9873/10 gram before recession and now in 2010 the gold price is Rs 18,400/ 10 gram. So it was almost the double the price. So do we think it is rising only because we have healthier economy or something else? The India, China and Srilanka bought gold in bulk which reflected the world gold prices. And since then the gold prices are going up. This was because the world economy is now not much dependent on the USD reserve. The developing nations want to increase gold reserve so as to keep their currencies competitive.It is expected that the gold prices would go up to Rs 25000/ per gram. But it is not the only reason. The European market has immense gold reserve and their economy has been hit hardly by the Greece crisis. So the European country wants to sell out gold to pay out their debt and come out of the crisis. And India is eyeing on it. However the other reason is the gold mines. The cost of extracting gold from mines has gone up and these mines are not able to meet the cost so forget the profit. So the gold mines are eying to get the price increase. The average price that the gold mines incur in extracting gold is Rs 25000/ 10 grams. So it is expected that the prices would go up to this mark.The oil prices also play an important role in the gold prices. [pic] *data from axis mutual fund and Religare mutual fund Author: Julian D. W. Phillips [pic] “Global Watch: The Gold Forecaster” covers the global gold market. It specializes in Central Bank Sales and details, the Indian Bullion market [supported by a leading Indian Bullion professional], the South African markets [+ Gold shares] plus the currencies of gold producers [Euro, U. S. $, Yen, C$, A$, and the South African Rand]. Its aim is to synthesize all the influential gold price factors across the globe, so as to truly understand the global reasons behind the gold price. Copyright © 2003-2010 Julian D. W. PhillipsThe above article is only to support my research and is not meant for someone to believe for investment. Mr. Phillips is one of the greatest researchers of financial market. My final say to the report was that the gold prices will go up to Rs 25000/ 10 grams in India within two years from now and if anyone is ready to invest in gold he/she should be ready to invest in long term and shouldn’t panic by the movement of gold. As per my research the gold price and the sensex both would go up, however the sensex will be the tortoise and would move slowly. Although the gold and sensex are opposite to each other, that means when the market will go up the gold prices will go down and vice versa but gold will take longer steps in compare to sensex.I couldn’t give the actual report and the data as per the Acumen policy. SUMMARY AND FINDINGS The internship helped me a lot to understand the financial product present in the current market. It also helped me to know the tricks and false commitments that an advisor or relationship managers give about the product. However my main objective was to understand the current market scenario and also to know a wealth management company works and how it is different from the AMCs and life insurance companies. The goal was also to know the mutual funds in and out so of every 39 AMCs present in India and also about the 18 life insurance companies that are present in India.This would in turn help me to become a good financial researcher as it will give me an edge if I know the current financial products. During my course of MIB (masters in international business) I learnt the basics of the market. But the types of product present in the market were not covered in the course and also it is not possible. The financial products are very similar yet they are different and for a layman it is almost impossible to differentiate. But now I can say that I am not anymore a layman and I can myself decide the product for myself. However the financial market keeps on changing and one should always be in touch with the latest news so that there shouldn’t be a knowledge gap.Now I can differentiate between a mutual fund and direct equity market. To get a better return it is necessary to spend time in the market and take investments for long term. At the same time one should not be dependent on the advisors and relationship managers for return. It is our own responsibility to track our investment and then consult our advisors for help if needed. I gained a lot by internship as it has enhanced my knowledge and made my decision more firm to take financial research as my career. To become a good financial researcher one should have the knowledge of the current market products so that we can think beyond the current products.Also it is very necessary to know the product so that the necessary steps should be taken to modify it. As a researcher one should always be aware of the competitor’s product so that we can come with a better product to beat them. Acumen has helped me to achieve this target by providing me enough training on the products of all leading mutual fund companies. And there is a flaw that I have already deducted in the mutual funds. No mutual fund is there which have agricultural companies or agro based product. This can be of the biggest product that can shake the market. However a lot of research is needed to come to a conclusion. The AMCs always targets metro and small towns and cities.Till this date they have ignored the villages which I seems can be one of the biggest revenue generators for the AMCs. It is very difficult to tab this market but this market has enough potential and needs to be target. This suggestion I have already given to Acumen and they liked it very much. Now they are thinking to tab these markets by opening a branch in Patna so that the nearby villages can be tested for the bigger project. As per the director of the company they will be opening a new branch in Patna and will look into my suggestion by an experiment. If it works then they will start it on big scale and will target villages directly. So if the idea works then as per my knowledge Acumen would double their revenue within six months.However it is not that easy and still I need to learn a lot but my aim to become a financial researcher has been pushed further and I think it was my first step towards it. SUGGESTIONS The monitoring or supervising at Acumen was excellent and as per me I think that I have got one of the best supervisors ever. He was very calm and knowledgeable and he never hesitated to share the knowledge. I never felt at Acumen that I am an intern and I don’t have that much value. There was no difference between me and the regular employees except the salary difference. Every day in the morning he used take my attendance himself and then brief me about the day’s work. Even he is not there he ensures that someone is there to help me.However he was very strict about the discipline inside the firm and which I think was actually very professional. He helped a lot to understand the financial market and the current products. At the end of the internship he also proposed me to do my dissertation from Acumen. As per me the challenges at the organisation were not too tough except the client meeting parts. As far as I am concerned I cannot sell anything. It was very difficult for me to convince anyone for a particular product. However, I came over this problem during my internship as the supervisor was excellent and he has full faith in me. He boosted me for selling profile and now I am confident about it.The business experience was not that good as what I thought that the work was not organised and the lack some enterprise software. If there would have been software then the work for Acumen would have become much easier. They were very hard working but what I felt that they were not following their old clients properly as there was no software where they can track the investment made by them. However they were doing it manually but still the manual work has error and doesn’t give 100% result. As I was doing an internship there and was a part of the company so I made this recommendation to the director and he also agreed with me. For the time being I made an excel format for them which to some extent was helpful.Other than business I felt that one very good thing about the company is that every employee was their own boss and there was hardly any difference between the director and the employees. The director was ready to listen to the problems of the employees, however the only thing what he expected from the employees is that they should respect each other. There was not much to relate to my MIB course however the basic concepts of bonds and currency market were very useful. I learnt how currency trading happens and what the difficulties are. In the course it seems very easy but it’s not that easy to trade in currencies. Within India we can trade in currencies if we are certified from SEBI but outside Indian market it is very difficult as the government norms are very strict.For an individual it is more difficult as the minimum amount through which we can start the trading is itself very high (INR 9 lakhs). On the contrary while studying the course it seems so easy. There is a connection between my internship and dissertation as I am doing my internship from the same company and for the new market. Acumen wanted to establish themselves in the other markets. So they wanted to know the issues that the customers are facing in those markets. To do this research one should know the products thoroughly and have justify himself when a question is asked from the respondents. One thing that I learnt from the internship is that one should not be relax if we achieve the target and if you are not willing to succeed then no one could help you to do that.And to run a business and become successful one should always look for innovation. As innovation would help us to start thinking and only thinking can help to get new ideas. Two qualities that I have learnt during the internship was time management. There were times when within an hour the client gives the appointment and there is no presentation ready for him, and you cannot say to the boss that you were overloaded with work so you didn’t prepare the presentation. So I learnt that do the work as it is given to you and don’t wait for the deadline to come as it can spoil your reputation. The goal of the company is to become an AMC, for that they have taken a right approach and are working as per their plan.If they continue in the same way then I think they would become successful in a very short span of time. However to continue with the same enthusiasm is necessary. I have a very good contact with the director of the company. As far as I am concerned I have the option to start my career here but I won’t start as I wanted to become a financial researcher or auto researcher and the company doesn’t deals with any such kind of research. But I have gained a lot from the company which will definitely help me in becoming a financial researcher. APPENDICES <> <> ———————– BOARD OF DIRECTORS RELATIONSHIP MANAGERS BACK OFFICE INCHARGE CORPORATE HEAD DIRECTOR