There was a seminar on Asset Allocation by ICICI Mutual fund it was delivered by Amit trivedi at hotel Pritam ,Dadar on Asset Allocation and difference between investment advisor and equity advisor, how to help clients in diversifying their portfolio etc.
Introduction : (10 Min )
Let us understand what is Asset Allocation- it is basically how we select our portfolio and diversify our risk say for example if I have a corpus of 5 lakhs then I can put 4 lakh in equity and 1 lakh in debt or vise versa, well there are many ways one can diversify risk. As per IFA’s (Independent Financial Advisory) survey 96% is put in fixed income and remaining 4% in equity.
Details on Asset Allocation:- (2 Hrs)
Now after understanding asset allocation the next step is how to go about it? The vital step towards it is client data . It is very important to know your clients income and expenses so that you can advise him in financial plan. The role of Investment advisor is to understand the client goals, have discussion with him on his future plans, calculate his total income and expenses etc then advise him regarding the various funds, scheme available and their return.
Then Mr. Amit trivedi said that there are 3 components of asset allocation
- Resources
- Financial Goal
- Risk appetite
Resources include Income, liability and expenses. Financial goal include retirement planning and Risk appetite means how much an investors is capable of taking risk. Asset classes can be divided into 2 parts i.e ownership asset and lending asset. In ownership asset Equity, commodity and real estate come in picture and in Lending asset Fixed income and money market come in picture. A very interesting point we have to note here is that from financial accounting point of view the house which we live in is our asset but from financial planning point of view it is our liability.
Case Study (1Hr)
We were given a case study with some bullet points about the person details and we were asked to try to do a financial planning of the same.
It was really very interesting since we (Steven and Ankit ) started with the case study and tried to solve it and when the solution was shown in brief it was very motivating to know that we were on the right track about solving the casestudy J.
For any portfolio the 2 devils which matters are volatility and inflation. Thus it is necessary to have an financial guide so that our journey towards our goal will be smooth.
Thanks & Regards,
Steven Fernandes and Ankit Wani
Summer Intern @ DENIP Consultants PVT LTD.
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