22-06-2013, 02:01 PM
Sales and Distribution of Financial Products at Reliance Money
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Introduction
Customer satisfaction is a measure of how products and services supplied by a company can
meet the customer’s expectations.
Customer satisfaction is still one of the single strongest predictors of customer retention.
It’s considerably more expensive to attract new customers than it is to keep old ones happy. In a climate of decreasing brand loyalties, understanding customer service and measuring customer
satisfaction are very crucial.
There is obviously a strong link between customer satisfaction and customer retention.
Customer's perception of Service and Quality of product will determine the success of the
product or service in the market.
With better understanding of customers' perceptions, companies can determine the actions
required to meet the customers' needs. They can identify their own strengths and weaknesses,
where they stand in comparison to their competitors, chart out path future progress and
improvement. Customer satisfaction measurement helps to promote an increased focus on
customer outcomes and stimulate improvements in the work practices and processes used within
the company.
ABOUT RELIANCE MONEY
Reliance Money is a group company of Reliance Capital; one of India's leading and
fastest growing private sector financial services companies, ranking among the top 3
private sector financial services and banking companies, in terms of net worth. Reliance
Capital is a part of the Reliance Anil Dhirubhai Ambani Group.
Reliance Money, the Broking and Distribution arm of Reliance Capital provides a single
window for transacting in a wide range of asset classes, including Equity, Equity &
Commodity Derivatives, Portfolio Management Services Wealth Management Services,
IPO?s, Mutual Funds, Life & General Insurance, Money Changing and Money Transfer,
Gold Coins.
It is the largest broking and distribution company in India with over 2 million customers
and 8,500 outlets across 4,250 locations. The average daily volume on the stock
exchanges is Rs. 2,000 crores, representing approximately 3% of the total stock exchange
volume. Reliance Money is promoted by Reliance Capital, the fastest growing private
sector financial service company in India, ranked amongst the top 3 private sector
financial services and banking companies in terms of net worth.
Re view of Performance
Reliance Capital has interests in asset management and mutual funds, life and general insurance,
private equity and proprietary investments, stock broking, depository services, distribution of
financial products, consumer finance and other activities in financial services.
Reliance Mutual Fund is India's no.1 Mutual Fund. Reliance Life Insurance is India's fastest
growing life insurance company and among the top 4 private sector insurers. Reliance General
Insurance is India's fastest growing general insurance company and the top 3 private sector
insurers. Reliance Money is the largest brokerage and distributor of financial products in India
with more than 2.5 million customers and the largest distribution network. Reliance Consumer
finance has a loan book of over Rs. 15,000 crores at the end of June 2009.
Board of Directors
An il Dhirubhai Ambani - Chairman
Regarded as one of the foremost corporate leaders of contemporary India, Shri Anil D Ambani,
50, is the chairman of all listed companies of the Reliance ADA Group, namely, Reliance
Communications, Reliance Capital, Reliance Energy, Reliance Natural Resources and Reliance
Power. He is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of
Information and Communication Technology, Gandhi Nagar, Gujarat. Till recently, he also held
the post of Vice Chairman and Managing Director in Reliance Industries Limited (RIL), India's
largest private sector enterprise. Anil D Ambani joined Reliance in 1983 as Co-Chief Executive
Officer, and was centrally involved in every aspect of the company's management over the next
22 years. He is credited with having pioneered a number of path-breaking financial innovations
in the Indian capital markets. He spearheaded the country's first forays into the overseas capital
markets with international public offerings of global depositary receipts, convertibles and bonds.
Starting in 1991, he directed Reliance Industries in its efforts to raise over US$ 2 billion. He also
steered the 100-year Yankee bond issue for the company in January 1997.
What is Distribution?
Distribution (or place) is one of the four elements of marketing mix. An organization or set of
organizations (go-betweens) involved in the process of making a product or service available for
use or consumption by a consumer or business user.
The Distribution Channel
Chain of intermediaries, each passing the product down the chain to the next organization, before
it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or
the 'channel.' Each of the elements in these chains will have their own specific needs, which the
producer must take into account, along with those of the all-important end-user.
Channel members
Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of
a direct contact with no intermediaries involved, as the 'zero-level' channel.
The next level, the 'one-level' channel, features just one intermediary; in consumer goods a
retailer, for industrial goods a distributor. In small markets (such as small countries) it is
practical to reach the whole market using just one- and zero-level channels.
In large markets (such as larger countries) a second level, a wholesaler for example, is now
mainly used to extend distribution to the large number of small, neighborhood retailers or
dealers.
Reliance Mutual Funds
Reliance Mutual Fund (RMF), a part of the Reliance - Anil Dhirubhai Ambani Group, is India's
leading Mutual Fund, with average Assets under Management of Rs. 100,813 crores for the
month of June 2009, and an investor base of over 8.7 million. Reliance Mutual Fund offers
investors a well rounded portfolio of products to meet varying investor requirements. Reliance
Mutual Fund has a presence in 380 cities across the country and constantly endeavors to launch
innovative products and customer service initiatives to increase value to investors. Reliance
Mutual Fund schemes are managed by Reliance Capital Asset Management Ltd., a wholly
owned subsidiary of Reliance Capital Ltd.
Introduction To Mutual Fund Industry
The origin of mutual fund industry in India is with the introduction of the concept of mutual fund
by UTI in the year 1963. Though the growth was slow, but it accelerated from the year 1987
when non-UTI players entered the industry in the past decade, Indian mutual fund industry had
seen a dramatic improvement, both qualities wise as well as quantity wise. Before, the monopoly
of the market had seen an ending phase; the Assets under Management (AUM) were Rs. 67bn.
The private sector entry to the fund family raised the AUM to Rs. 470 bn in March 1993 and till
April 2004; it reached the height of 1,540 bn.
Putting the AUM of the Indian Mutual Funds Industry into comparison, the total of it is less than
the deposits of SBI alone, constitute less than 11% of the total deposits held by the Indian
banking industry. The main reason of its poor growth is that the mutual fund industry in India is
new in the country. Large sections of Indian investors are yet to be intellectuated with the
concept. Hence, it is the prime responsibility of all mutual fund companies, to market the product
correctly abreast of selling. The mutual fund industry can be broadly put into four phases
according to the development of the sector. Each phase is briefly described as under.
First Phase - 1964-87
Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the
Reserve Bank of India and functioned under the Regulatory and administrative control of the
Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development
Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The
first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6, 700
crores of assets under management.
Tax Benefits to the mutual fund:
Reliance Mutual Fund is a Mutual fund registered with the securities & exchange board of India
and hence the entire income of the mutual fund will be exempt from income tax in accordance
with the provisions of section 10(23D) of the income tax act, 1961. The mutual fund will receive
all income without any deduction of tax at source under the provisions of section 196(iv) of the
act.
An exemption has been granted under the finance (No.2) act, 2004 to open ended equity oriented
mutual funds from paying distribution tax on income distributed without any time limit, effective
from 1 April 2004.
Systematic Investment Plan(SIP) :
We have already mentioned about SIPs in brief in the previous pages but now going into details,
we will see how the power of compounding could benefit us. In such case, every small amounts
invested regularly can grow substantially. SIP gives a clear picture of how an early and regular
investment can help the investor in wealth creation. Due to its unlimited advantages SIP could be
redefined as “a methodology of fund investing regularly to benefit regularly from the stock
market volatility. In the later sections we will see how returns generated from some of the SIPs
have outperformed their benchmark.
What is the Facility?
Reliance SIP Insure provides free life insurance cover to investors at no extra cost. In the
unfortunate event of the demise of an investor during the tenure of the SIP.
The insurance company will pay for the balance amount towards the remaining unpaid SIP
installments.
Thus, the nominee* would be able to continue in the scheme without having to make any further
contribution.. Investor’s long term financial planning and objective of investing through SIP
could still be fulfilled as per the targeted time horizon, even if he/she dies prematurely.
Investment Details
Minimum Investment per installment: Rs.1000 per month & in multiples of Re 1 thereafter.
There is no upper limit Minimum Period of Contribution: 3 years and in multiples of 1 year
thereafter. Maximum Period of Contribution: 15 years OR till attaining 55 years of age,
whichever is earlier (e.g., a person can register an SIP of maximum 10 yrs at the age of 45 yrs.)
The insurance cover ceases when the investor attains 55 years of age. Mode of payment of SIP
installments is only through Direct Debit & ECS ( Post Dated Cheques shall not be accepted )
Findings and Conclusion
The findings for the above research are as follows:-
It was found that majority of the investors i.e.46% are from the age group of 36-54.
This is the group of middle age people who deserve to invest for their future financial
needs.
It was found that Out of 100 respondents 64 customers have already reinvested in the
company, while the rest are waiting for a correct time to enter in the market for the
second time.
It was observed that Out of 100 respondents 62 investors have reinvested due to better
returns and performance of funds. While 28 investors have voted for non performance
of funds and services provided by the company.