Mistakes women should avoid in order to achieve financial stability

Invest in regular health care program and for the long term to create wealth and lead a stress a free life

Today's women are juggling between high-pressure work environments, fast-paced social life and simultaneously managing the family, which can sometimes put money management on the back seat. A few money management mistakes if avoided in the earlier part of life can help women hand carve and secure a financial future. It is advisable that they start their financial planning journey with the help of an advisor, who will help in drafting a customized fiscal road map, ensure optimum asset allocation as per the risk profile and simultaneously help in the execution of the investments.

The seven mistakes that a woman should avoid being financially independent are

1.    Not having a contingency reserve of six months expenses

2.    Not investing regularly in a diversified portfolio with the right asset mix as per the risk profile

3.    Not creating a retirement corpus Not creating a sufficient corpus for children's education

4.    Not protecting against risks to health and life by buying sufficient health and life insurance

5.    Spending too much in impulsive purchases & not keeping avoidable debt under control and

6.    Being too dependent on the male members of the family like husband and father to manage finances and being oblivious of the process is a fundamental flaw which should be avoided

7.    Being financially literate is not a choice today but a necessity.

Have an emergency fund

The blunder of not having a six months contingency reserve in the bank account / liquid funds may have dire consequences in case of job loss or medical emergencies. Having a contingency reserve allows bouncing back in case of any eventualities.

Diversify your investments

We all know the importance of "Not keeping all our eggs in one basket" and so investments need to be diversified. While it is important to start investing early to take advantage of the power of compounding, it is more important to ensure the discipline of continuity of regular monthly investments. Systematic investment plans (SIPs) in mutual funds are a smart solution to this.

Health, wealth and happiness

Retiring from work is obvious, but many women fail to plan for post-retirement. Starting retirement savings in the early part of life leads to a larger retirement corpus, which eventually provides for better post-retirement security. Being frugal and cautious by nature, women prefer to keep money in a savings bank account or make investments earning a fixed rate of interest. A higher allocation to equity generally results in building a larger retirement corpus, though the right mix should be identified after speaking to your financial advisor.

The same is true the women who are mothers. Their biggest prized possession is their child and there the most important goal is the child's education. Higher education costs are growing every year and regularly investing in equity mutual funds through the Systematic Investment Planning (SIP) route and increasing this amount regularly as incomes grow, after discussing the exact amounts needed with the financial the planner is a good solution to achieve this goal.

Life is unpredictable, but managing finance well isn't. The importance of life insurance and health insurance is paramount. Empirically it is seen that women, in general, live longer than men, which increases the importance of health insurance.

Expenses from activities like frequent dining out and impulsive shopping, using credit card borrowings, may lead to a ballooning of debts and then into a debt trap and realization often comes late, when actually one starts checking the interest charged on the credit card statements. It is important to stick to a monthly budget, and as soon as one receives the monthly income, transfer 20 to 30 % to a separate bank account for investments. Also, many mobile apps are now available, which help in tracking monthly expenses and also show the trends in spending. Expense control is a critical step in wealth creation. It is rightly said, "A rupee saved is a rupee earned".

Inheriting money from father or sometimes after the unfortunate death of the spouse generally leads to the acquisition of a large chunk of money. The vulnerability at that moment is also high. It is advisable to protect and invest such corpus wisely, after taking advice from a legal counselor and a financial advisor or getting in touch with a wealth management firm, who provides a 360-degree service.

In a nutshell, every woman should keep this mantra of HWH (health, wealth and happiness) in their mind while participating in the race of life. Investing in a regular health care program, investing in the long term to create wealth and living a stress a free life should be the essence for today's modern women.

The writer is CEO of Karvy Private Wealth

Read at https://www.dnaindia.com/personal-finance/report-mistakes-women-should-avoid-in-order-to-achive-financial-stability-2733561

HNIs are looking at international diversification: Abhijit Bhave of Karvy

The wealthy, Bhave says, has evolved a lot in the past two-three years, especially in terms of making learned decisions and considering the costs involved in the investments

ABHIJIT BHAVE, chief executive officer of Karvy Private Wealth talks to Puneet Wadhwa on the key trends in the wealth management business in India and the road ahead for the industry. Edited excerpts:

Do you think the wealth management segment is getting overcrowded and the margins will get thinner going ahead?

India is on the growth trajectory where projections of a $10 trillion economy over eight years are being made. This leads to a lot of potentials for wealth management companies to grow and the sector will not get saturated anytime soon. In the short-term, there may seem to be some overcrowding in this space. That said, there is huge potential to grow over the long term.

The margins will definitely get thinner going ahead but an increase in the asset base in terms of volumes will bring profitability in the future rather than margins. One of the options that many wealth management companies would consider after regulatory clarity would be to go into the advisory model for long term sustainability of the business.

Can you elaborate on the likely industry growth rate for the next three-five years?

Considering projections of at least a $5 trillion economy over the next three-five years and the increase and inclusion of a larger investor base across the length and breadth of India, double-digit growth in the wealth management industry is very likely.

The wealth management business competes with banks as well. How do you maintain your leadership, profitability and growth strategy?

While a bank will provide comprehensive banking solutions where wealth management is a part of their services, we are specialists in only wealth management. We focus and position ourselves into offering the best in class investment products. By maintaining a diverse and all-inclusive category of products after strict due diligence and evaluation, we get a competitive edge in terms of investments.

How have the investing trends among the wealthy/high net worth individuals changed over the last two-three years? What is the road ahead?

The wealthy have evolved a lot in the past two-three years, especially in terms of making learned decisions and considering the costs involved in the investments. The requirements have also evolved over time, where they are actively looking at absolute return strategies, venture capital (VC), private equity (PE) and international diversification. The merits of advisory models, succession and estate planning are also visible and exercised. Going ahead, we foresee a much deeper relationship between ultra-high net worth (UHNI) clients and wealth managers in the advisory role, where both would have higher levels of awareness and knowledge levels.

Over the last few years, avenues such as art, wines, etc have emerged as investment options. Are the well-heeled in India looking that them?

Though these investment avenues sound glamorous and may seem attractive, we believe these avenues have yet not evolved in a structured way in India compared to the developed economies. The UHNI segment is definitely looking at these investment avenues, but not a lot of actual investments are happening. These investments are expensive to enter and the exits are uncertain. Though if the right one is picked up early, the returns can be astronomical.

Visit - https://www.business-standard.com/article/markets/hnis-are-looking-at-international-diversification-abhijit-bhave-of-karvy-119021100286_1.html

An experience which inculcates a ‘never give up’ attitude

The initiative, conducted over Sept, Oct and Nov by Karvy, is viewed as a great morale booster among employees

The initiative has encouraged a culture of creative thinking, say some employees
It’s not every day that you are cherry-picked to become the CEO of a company. Prashant Wagh, vice-president (VP), wealth management, at Karvy Private Wealth got the chance to sit—literally—in the top boss’ chair as part of Karvy’s “CEO for a day" initiative.

To make the day memorable, Wagh’s family received a bouquet, announcing his new designation, at their home in Pune. The 37-year old moved into the company’s guest house a day ahead of the “big day". The next morning, he was chauffeured to Karvy’s Mumbai head office, where he spent the day familiarizing himself with the tasks of a CEO.

Ratika Gujral Manjrekar, 32, associate VP, wealth management, and Naveen Govind, 41, VP, wealth management, were two others chosen as “CEO". “I thoroughly enjoyed the help and assistance being provided to me seamlessly. The reporting business analyst kept all the collated data ready for me before the conference calls with the pan-India teams and review during the day. The executive assistant to the CEO organized and kept things handy for me and the chauffeur, who drove me around; all of these proved to be a great set of helping hands," says Manjrekar.

They were also handed a new set of visiting cards mentioning their designation as CEO. “It indicated how seriously this initiative was being taken, not as a feel-good activity," Manjrekar says.

The initiative, conducted over September, October and November, is viewed as a great morale booster among employees. Besides bragging rights, the chosen employees got to attend the high-level decision-making process and spend time with the CEO, Abhijit Bhave. The Karvy CEO was keen on receiving feedback and ideas that help the business.

“An employee who wishes to become the CEO writes down various ideas that help the company achieve its corporate objectives holistically, and how he/she would implement the same if he/she were to actually become the CEO. The opportunity to become the CEO for a day and running an organization in itself was a huge motivator for many colleagues to give detailed inputs to try and achieve their aspiration," explains Bhave.

Applications were invited, and the three selected from the 38 who expressed interest.

Getting into the job

For Manjrekar, the day began with a pan-India conference call with different team leads, followed by a western region review, where she sat in on performance reviews and in meetings setting targets for the next quarter with regional head and line managers, including her immediate boss. The day ended with a meeting with the company’s core team and a one-on-one chat with Bhave, during which he advised her on ways of achieving her career goals, how to grow in life, etc. Interestingly, Bhave also had other advice for Manjrekar. “He called me in the morning and said that as it was going to be a heavy day, I should take out some time for meditation. And I did. I picked up some meditation music online and took out half an hour to meditate," says Manjrekar, who admires Ratan Tata and N.R. Narayana Murthy for not only making their companies profitable but also giving importance to corporate social responsibility (CSR) initiatives.

For Wagh, the highlight of the day was being able to share his ideas about each department in detail and explain how this would benefit the company’s growth. “It’s a brilliant feeling when everyone listens to you and your thoughts. I enjoyed the Q&A session during the conference call with employees across centres too, as I was feeling the heat of reactions on some of the points I made. I really felt the importance as well as the responsibilities of the CEO’s chair in that one hour and learnt a lot about leadership. It’s definitely not an easy job when you interact with a large set of employees with different thoughts and experiences," he recalls.

Top takeaways

Wagh and Manjrekar have a renewed appreciation for the role of a CEO, having experienced the challenges it comes with. “It has changed my approach towards the company’s policies and has been a big boon to me as I was able to see the CEO’s perspective towards the company’s functioning. I am now able to convey the organization’s thought process behind any strategy/product mix to my team effectively and make them understand the long-term benefits. Front-line employees react to policies, as, most of the time, they only think about short-term pros and cons, but I was able to curb that," says Wagh.

Manjrekar believes the experience has inculcated a “never give up" attitude. “On the professional front, it has given me a lot of recognition—colleagues, seniors and even employees of other organizations have inquired about this day."

The learning, though, is not just restricted to employees alone. The initiative has encouraged a culture of creative thinking. “Sometimes the top management may lose sight of some low-hanging fruit, which may be easy wins. We found that all the three colleagues selected to be the CEO took quick and implementable decisions," Bhave says.

Visit - https://www.livemint.com/mint-lounge/business-of-life/an-experience-which-inculcates-a-never-give-up-attitude-1549204564490.html

Private wealth soars by 10% in FY19

The individual wealth in India has swelled by 10% in the last fiscal backed by strong growth in financial assets.

The individual wealth in India has swelled by 10% in the last fiscal backed by strong growth in financial assets, a report said on Wednesday. However, compared to financial assets which grew by 10.96%, physical assets growth was at a slower pace of 7.59% and individual investors are making more investments in financial assets, Karvy Private Wealth, the wealth management arm of financial-services conglomerate Karvy Group said. Direct Equity, mutual funds, pension funds, alternative investments and international assets saw the most favorable return rate. “Direct Equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian equity markets notwithstanding the volatility it has been through,” Abhijit Bhave, Chief Executive Officer, Karvy Private Wealth, said in a statement. 

Further, Prime Minister Narendra Modi’s goal of making India a $5 trillion economy will also have a surge effect on the private wealth by 2024. “We expect the HNI population to touch 1 million over the next five year,” Abhijit Bhave added. For the last fiscal year, individual wealth soared up by 9.62% to Rs 430 lakh crore.

In financial assets, Direct Equity, Fixed Deposits, Insurance, Saving Accounts and Cash are the top five picks for investment allocation as they contributed to a total of 72.33% of financial assets. These assets have been last year’s best investment picks as well. In physical assets, Gold and Real Estate together covered 92.57%. According to the Karvy report, the total wealth held by individuals in physical form, in this fiscal year, stood at Rs 167 lakh crore.

Forecasting that the individual wealth will grow at a CAGR of 13.19% by FY24, the Karvy report added that the private wealth will almost double to Rs 799 lakh crore from the current wealth of Rs 430 lakh crore. Going further, “massive investment in Infrastructure and Green Energy, backed with a regulatory boost with tax reforms, aided by a huge young workforce, will accelerate the Indian economy towards the $5 trillion target once there is a pickup in consumption,” the report said, adding that both urban India and the semi-urban and rural Bharat will go together to witness this. 

Visit - https://www.financialexpress.com/market/private-wealth-soars-by-10-in-fy19-these-are-top-5-investment-picks/1738344/

‘Individual wealth in India rises 10% to ₹430 lakh crore in FY19’

Major part of this growth came from financial assets: study

Even as global wealth saw a decline in 2018-19, individual wealth in India rose almost 10% to ₹430 lakh crore primarily on account of higher domestic participation in capital markets, mutual funds and a rise in gold prices.

According to a study by Karvy Private Wealth, individual investors continued moving their wealth from physical assets to financial assets as the proportion of financial assets rose from 57.25% to almost 61% in last five years with direct equity maintaining the top position among financial assets.

“Taking forward the acceleration of wealth growth over the last few years, individual wealth in India grew by 9.62% to reach ₹430 lakh crore in FY19,” Karvy said.

“A majority of this growth was achieved by an impressive 10.96% wealth growth in financial assets as compared to physical assets which grew by 7.59%. Direct equity continued to act as a major proponent of investor wealth as it moved up by 6.39%, retaining the top spot. Other notable assets which saw good growth include mutual funds, pension funds, alternative investments and international assets,” it added.

While the individual wealth in financial assets witnessed an increase of 10.96% and grew to ₹262 lakh crore in FY19, compared with ₹236 lakh crore in FY18, the top five destinations for investment allocation were direct equity, fixed deposits, insurance, saving accounts and cash with a total of 72.33% contribution in overall financial assets.

Meanwhile, the individual wealth in physical assets rose 7.59% in FY18 with gold and real estate together covering 92.57% of this segment. Total wealth held by individuals in physical form stood at ₹167 lakh crore in FY19.

Interestingly, the total individual wealth in India is estimated to have a healthy growth rate at a CAGR of 13.19% to reach almost ₹799 lakh crore by FY24. While allocation to financial assets is estimated to be 66.11%, allocation to physical assets will be 33.89%, as per the study.

“Massive investment in infrastructure and green energy, backed with a regulatory boost with tax reforms, aided by a huge young workforce, will accelerate the Indian economy towards the $5 trillion target once there is a pick-up in consumption. Urban India will go hand in hand with the semi-urban and rural Bharat to achieve this feat,” Karvy said.

Visit - https://www.thehindu.com/business/individual-wealth-in-india-rises-10-to-430-lakh-crore-in-fy19/article29728360.ece

Alternative Investment Exposures Would Grow Significantly In Coming Years: Abhijit Bhave

In an exclusive interview with BW Businessworld, Abhijit Bhave, CEO, Karvy Private Wealth talks about UHNI investors and more

Over the years, have you observed any discernible behavioural differences in the way UHNI’s approach their investments/portfolios? 

UHNIs are more diligent in allocating funds and are more informed. Transparency in fees and charges is expected and Investors are more cost-conscious. The investment decision-making process for UHNI investors has become more sophisticated, and asset allocation is of prime importance. 

How would you describe the attitude of the majority of UHNI’s towards risk-taking? 

Trends indicate a shift of portfolio exposure towards alternative investments. Direct venture capital investments and absolute return strategies among the most popular investments in UHNIs and Family Offices. Calculated risk-taking and tactical allocations can be seen in portfolios. 

How inclined/disinclined are UHNI’s towards plain vanilla products such as Mutual Funds? Are they more inclined towards investing directly into stocks? 

Core portfolio allocations consist of both Mutual Funds and Direct Stock and Bond Investments. Both approaches go hand in hand and are equally focussed in UHNI portfolios. 

Broadly speaking, how do UHNI’s approach their real estate investment portfolios? Do they prefer to buy land or to invest through vehicles such as REITs? 

Commercial properties and commercial asset funds are popular. Direct investment depends on the ticket size of the property. Land purchases are still done directly as it has a heavy home city bias. 

In your observation, how inclined as UHNI’s towards making angel investments/growth capital investments in start-ups/ VC investments? Do they generally prefer to do these directly or through a fund? 

Initially, these investments were done via VC funds as direct access to such deals was limited. Over the last two years, we have seen a surge in direct deals by Family Offices and UHNI investors. This indicates that the Indian VC industry is maturing at a fast pace. The reason behind this is first, investors do not want to shell out fund management expenses and profit-sharing, secondly, they wish to be a part of the management and decision making in these start-ups providing their network and expertise, and thirdly, they might have synergies with the investee companies for their running business and are looking at these companies as probable takeovers in the future. 

How would you describe the attitude of most of your UHNI clients to philanthropic endeavours? Do you believe that a specific vehicle to this effect, would be of interest to UHNI’s? 

UHNIs usually make philanthropic contributions through their own charitable trust or foundations. They usually dedicate efforts to a cause which may be personal in nature or related to their profession/business which gives them a deep understanding of the issue and makes them better equipped to tackle it. 

What product gaps need to be filled in the Indian market for UHNI’s, compared to more evolved global markets such as the U.S & Europe? 

Venture Capital/Private Equity investments still a minuscule part of the overall portfolio. More sophisticated products on the fixed income side are yet to enter India. Alternative investment exposures would grow significantly in the coming years. 

Do you find resistance within the “old money” UHNI’s towards more complex investment products such as structures? Are they generally more inclined towards traditional avenues such as Bank Deposits? 

The old money has also evolved with changing trends and we see these investors opting for better tax-effective avenues for investments. Though we still see higher exposure to bank fixed deposits and bonds than structured products. 

 Visit - http://www.businessworld.in/article/Alternative-Investment-Exposures-Would-Grow-Significantly-In-Coming-Years-Abhijit-Bhave/23-10-2019-178032/

Share of financial assets on the rise: Karvy Private Wealth

The benchmark equity index, Sensex, recorded gains of 17.08% in FY19, leading investors to raise their investments in Indian stocks.

According to the Karvy report, individual wealth in India is estimated to grow at a compounded annual growth rate of 13.19% over the next five years to reach a total of Rs 799 lakh crore.

Individual investors investing in the Indian markets continue to move their wealth from physical assets such as gold and real estate to financial assets like equities and mutual funds. The annual India Wealth Report done by Karvy Private Wealth shows that the proportion of investments in financial assets expanded to 61% in FY19, against 57.25% five years ago. The share of physical assets came down from 42.75% to 39.05% in the same period.

According to the report, individual wealth in India is estimated to grow at a compounded annual growth rate of 13.19% over the next five years to reach a total of Rs 799 lakh crore. Direct equity, mutual funds and alternative funds will be the top growth drivers for financial assets over the next five years.

Despite the current mood in the market, investment made directly into the equity markets was the top investment avenue compared to other financial assets. However, investments in equity markets in FY19 grew at a slower pace of 6.4% over the previous year. “Direct equity continues to hold the fort in terms of investment preference in India,” said Abhijit Bhave, CEO, Karvy Private Wealth. Other notable assets which saw good growth include mutual funds, pension funds and alternative investments, according to the report.

The benchmark equity index, Sensex, recorded gains of 17.08% in FY19, leading investors to raise their investments in Indian stocks. Mutual funds as an asset class also grew in popularity in FY19 with a net inflow of `92,693 crore across equity and debt funds, according to data from Amfi.

While equity investments saw the highest allocation of resources from individual investors, investments in pension funds, mutual funds and alternative investment funds (AIFs) witnessed the highest growth. AIFs saw a growth of 20.19% year-on-year (y-o-y) with investments amounting to Rs 1.4 lakh crore in FY19, while pension funds and mutual fund investments grew 21% and 17%, respectively, over the previous year.

The country’s high net worth individuals (HNIs) – which Karvy Private Wealth categorises as individuals having an investible surplus of `5 crore and above – have increased their investments in AIFs. Of the several categories of alternative funds, HNIs have invested the maximum in structured products like market-linked debentures (MLDs) and private equity funds, leading individual wealth in alternative assets grow by 20.19% in FY19.

“Private equity funds have turned to be a preferred investment class globally and some family offices have begun making direct private equity investments or co-investments along with these funds,” said Bhave. HNIs invested `36,266 crore in private equity funds, a y-o-y increase of 54.7%.

Visit - https://www.financialexpress.com/market/share-of-financial-assets-on-the-rise-karvy-private-wealth/1737784/