CWM - Chartered Wealth Manager by AAFM USA
by Vantage Institute Of Financial MarketsMumbai, Thane, Surat, New Delhi, Pune |
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Category: Banking, Finance & Commerce | Finance | Asset & Wealth Management | Investments | Taxation | Capital & Bullion Markets | Loan
| Medium of instruction: | English |
ABOUT CWM
Chartered Wealth Manager
A professional designation offered by the American Academy of Financial Management (AAFM). The prerequisites for the Chartered Wealth Manager (CWM) program are three years or more of experience in wealth management and an AAFM-approved degree or other approved program. The course focuses on topics such as relationship management, communication, sales and financial planning.
Chartered Wealth manager (CWM) is a unique and the only wealth Management certification in India. This certification comprehensively deals with all the aspects of wealth Management like Investment Strategies, Life Cycle, Management, International Wealth Transfer, Relationship Management, Behavioral Finance, Alternative Products, Real Estate Valuation and Global Taxation.
This certification enables the candidate to meet the current skill set needed by the Industry and stand out of the crowed.
BENEFITS
• Use of Board Certified Designations after your name on your Business Card and on your Promotional Materials.
• Global Certification in true sense and no territorial examination required.
• CWMTM is awarded directly by American Academy of Financial Management, US.
• Protect your job and be recognized by an independent and global authority.
• Get the designation that illuminates your professional education, hard work and experience.
• The AAFM Credentials and Board Certifications are for those who want to rise above the rest.
• You can add AAFM to your Resume, Degree or Professional Licenses & Improve your image and salary potential.
• Publish on our site as a Certified Member.
• Be part of Large Members Network of 50,000+.
• Members in more than 100 Countries with Global AACSB Alliance.
REGISTRATION
The candidates who wish to undergo the CWMTM Certification Program (the ‘Program’) have to get registered with AAFM India. A candidate can register with AAFM India through an authorized Education Providers i.e. Vantage Institute of Financial Markets across India to pursue the program.
01. Compulsory Pathway: ( Fresher or having less than 3 years of work experience*)
The registration fee of Rs. 11,236/- (Rs. Eleven Thousand Two Hundred and Thirty Six Only) shall be payable in favour of "American Academy of Financial Management India Pvt. Ltd." through demand draft payable at New Delhi.
02. Experience Pathway: (Having minimum 3 years of work experience*)
The registration fee of Rs. 5,618/- (Rs. Five Thousand Six Hundred and Eighteen Only) shall be payable in favour of "American Academy of Financial Management India Pvt. Ltd."through demand draft payable at New Delhi.
The registration is valid for one year (365 days) from the date of activation of registration by AAFM India.
The student can renew his/her student registration with AAFM India by paying a renewal fee of Rs. 5,000/- (Rs Five Thousand only), if the examination process is not completed within 365 days.
It may be noted that Level 2 Examination can be scheduled only after completing Level 1 examination unless exempted through Experience Pathway.
Furthermore, a candidate after his/her registration with AAFM India in the education program would have a time span of 3 years to complete the program to seek the Certification from the date of registration.
Work Experience *The work experience should be in any field related with the Financial Advisory Services and every case shall be subject to the scrutiny of AAFM India for the verification of the work experience.
EXAMINATION
1. Examination Performa:
|
Level |
Duration |
Examination Type |
Examination Pattern |
|
1 |
2 Hours |
MCQ’s (Objective) |
1 Marks – 30 Questions 2 Marks – 15 Questions 4 Marks – 10 Questions Total Mark – 100 |
|
2 |
3 Hours |
MCQ’s (Objective) |
1 Marks – 40 Questions 2 Marks – 30 Questions 4 Marks – 15 Questions Total Marks - 160 |
2. Examination Fee:
· The Examinations Fee for Level 1 &Level 2 examination is Rs. 2,000/- each per Examination.
Exam Scheduling Process:
1. Exams can only be scheduled after 30 days of registration with AAFM India for Experience Pathway and 60 days of registration for Compulsory Pathway.
2. Compulsory Pathway Student can only enrol for level II examination after clearing Level 1 Examination
3. Candidate fills the exam form and send it to AAFM India along with the requisite fees.
4. On approval from AAFM India, the candidate receives a welcome mail from Pearson Vue and a Web Account is Auto Generated with Pearson Vue. This mail would have the candidates log in id and password.
5. The candidate also receives “Authorization to Test” Email form Pearson Vue which besides other information gives information on how to schedule an examination on Pearson Vue Network.
6. The candidate either through online mode or through the help of the Pearson Vue Call Centre schedules an examination for only 10th and 20th of every month.
7. A candidate can schedule examinations any time of the month except 10th to 20th of the month and the test taking dates are only 10th to 20thof the month.
8. A candidate practices the exam on AAFM Website to make themselves familiar with the look and feel of the exam.
9. Candidates are required to carry a Photo ID to the examination center.
10. Candidate need to agree to a Non-Disclosure Agreement at the start of the exam.
11. Candidate takes the exam at Pearson Vue Test Centre
12. Exam result is shown to the candidate immediately after submitting the exam.
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Candidates are allowed to take a print out of the exam result.
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On clearing of Level-II exam candidate needs to fill the CWM® Certification form and pay the requisite fees to AAFM India. Candidate submits the project work within the given time frame on approval of the project work the Candidate receives the CWM® Certification.
CURRICULUM
Level – 1 – Foundation Level
Unit 1 Overview of Indian and Global Financial System
Unit 2 Concept of Wealth Management
Unit 3 Measuring Investment Returns in Wealth Management
Unit 4 Life Cycle Management
Unit 5 Investment Vehicles of Wealth Management
Unit 6 Managing Investment Risk in Wealth Management
Unit 7 Investment Strategies of a Wealth Manager
Unit 8 Intergenerational Wealth Transfer & Tax Planning
Unit 9 Role of Wealth Management in Banking
Unit 10 Legalities in Wealth Management
Chartered Wealth Managertm
Course Curriculum Level 1
Unit-1 Overview Of Indian And Global Financial System
Course Objective: Effective financial system is required any nation for financial development. The concept of globalization demands more integration of domestic market with global market. Liberalization and economic reforms are affecting dynamic changes in Indian Financial System. These have immense bearing on the wealth management decisions taken by a wealth manager.
Overview of Global Financial System
Introduction to International Financial System: Bretton Wood conference and afterwards. Origins and evolution of the global financial system, Risk and opportunities of financial globalization.
The Balance of Payments: Current and capital accounts, the “net international investment position”, Balance of payments and the absorption approach, the monetary approach to the balance of payments: the “Polak model”, Financing gaps and external indebtedness.
The International monetary system: Institutional Framework and Evolution, The Euro zone, The dollar zone, The yen zone, The CFAF zone, The specific role of the SDR
The international financial institutions: The key roles of the IMF, the World Bank, the BIS and the IIF, Lending instruments of the IMF, Co-financing between private banks and IFIs, Review of key international finance statistics (IMF, OECD, BIS, IIF). The Role of Central Banks in Global Economy Reserve Bank of India, Functions of RBI, Monetary Policy and Credit control. Commercial Banks, Insurance companies - IRDA
Types of Financial Markets within the Global Financial System
Money Market: Meaning, Participants in Money Market, composition of money market - Call money market,
Treasury bills market – types operation and Participants – importance.
Money market instruments - Certificate of Deposit, Commercial Paper, inter-bank participation certificate repo instrument.
Capital Market: Structure of Indian Capital Market, Functions of Capital Market, Derivatives Market, Depository system Reforms in the capital market during post liberalization period, Stock Exchanges – role and functions, Stock Market Indices.
The International Capital markets: regulation & Supervision · The role of the BIS, The Basel I & II Agreements, Capital ratios and credit assessment.
Foreign Exchange Market – International Dimensions of financial market – Meaning and Definition of Foreign Exchange – Foreign Exchange market – Functions –importance – Rate of Exchange – Kinds of Exchange Rates - Pegged, crawling and flexible exchange rates – Determination of Exchange rate – purchasing power parity theory – Balance of payment theory. Currency Board and Dollarization
Introduction to Macro Economics: Microeconomics and Macroeconomics-Why Macroeconomics is important for the financial sector-The concept of ‘equilibrium’ in economics
Inflation and Interest Rates: What is inflation? -How to measure inflation?-Measurement of Inflation, Theories of Inflation -Impact of Inflation on macroeconomic variables-Controlling Inflation-Interest Rates, Factors affecting the level of Interest Rate -Impact of interest rates-Concept of Real Interest Rate
National Income Accounting: National Income Accounting: Measuring Economic Activity -Some other ways to measure National Income, The Expenditure Approach, and The Income Approach, National Income Accounting and relationship among macroeconomic variables, The relationship among macroeconomic variables, Saving and Investment in India, The changing composition of India’s economic environment
Government and Fiscal Policy: Role of the Government in an Economy, Government Expenditure and Revenue, Understanding the government accounts, Government Receipts, Government Expenditure, Bringing together the Revenue and the Expenditure side, The Deficit Indicators, Financing of the deficit by the government, Fiscal Deficit and Sustainability of Internal Debt, Fiscal policies and their impact on the financial markets
Money and Monetary Policy: What is the role of Money? Components of Money in India, Demand for Money, Supply of Money, Different Roles of RBI in India How RBI regulates Money Supply in the Economy, What are the roles of Commercial Banks in Money Supply? Other Instruments of Money Supply, Market Stabilization Scheme, Use of Monetary policy, Use of Fiscal policy
The External Sector: Open economy macroeconomics
Why do Countries Trade? Absolute advantage theory, Comparative advantage theory India and International Trade, India’s merchandise trade, Trade in services, Transfer payments and net factor incomes, Balance of Payments
Classification of Balance of Payments accounts: Foreign Direct Investment, Foreign Portfolio Investment, Exchange Rates, Foreign Exchange reserves, Impact of capital flows on money supply, Sterilization of Capital Flows
Regulatory institutions in India: Role of regulatory institutions in a market-based economy, The Reserve Bank of India (RBI), The Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA), Forward Markets Commission (FMC), Stock Exchanges in India.
Unit-2: Concept Of Wealth Management
Course Objective: This unit would serve as an introduction to Wealth Management and Credit Management. The unit would cover the Wealth Management Process, client interactions, time value of money applications, personal financial statements, cash flow and debt management and asset acquisition, Loan and Credit Management. Overview of the Wealth Management Industry Globally and especially in India.
A. Wealth Management:
• What is Wealth Management?
• Different verticals of Wealth Management
• Role of Wealth Management in Banking
• Managing Wealth Management Services
• Wealth Management and Financial Planning
B. Wealth Management Process
1. Identify and Clarify the Current Situation:
a. Explain issues and concepts related to overall Wealth Management process, as appropriate to the client
b. Explain services provided, the process of planning, documentation required, and disclosure
statements
c. Clarify client’s and Wealth Managers responsibilities.
2. Identify Goals and Objectives
a. Obtain information from client through data gathering sheet and personal interview
b. Help Client in Determining personal and financial goals, needs and priorities
c. Check if the Goals are Smart
d. Assess client’s values, attitudes and expectations
e. Determine client’s time horizons
f. Determine client’s risk tolerance level
g. Collect supporting documents
3. Analyze Financial Issues and Opportunities
a. Techniques of Data Analysis
b. Identifying Need for specialist advice
c. Develop a Financial SWOT Chart for the Client
4. Developing the Wealth Management Plan
a. Assessing Client's risk tolerance
b. Review of Financial options
c. Draft Wealth Management Plan
d. Presenting and reviewing the plan with the client
5. Implementation of the Wealth Management Plan
a. Assist the client in implementing the recommendation of the Plan
b. Creating the Action Plan
6. Monitoring and Reviewing the Plan
a. Monitor and evaluate soundness of recommendations
b. Review the progress of the plan with the client
c. Discuss and evaluate the Macro and Micro level that require plan review.
d. Altering the Plan.
7. Critical Discipline in a Wealth Plan
a. Tax Planning
b. Cash and Credit Planning
c. Insurance Planning
d. Retirement Planning
e. Investment Planning
f. Estate Planning
8. Preparation of Personal Financial Statements
a. Cash Flow Statement
b. Income Statement
c. Balance Sheet
d. Budget
e. Investment Plan
9. Financial Mathematics
a. Concept of time value of money
b. Calculation of Present and Future Value
c. Calculation of annuities
d. Calculation of Unequal Cash Flows
e. Use of Capital Budgeting Techniques in Personal Finance
f. Loan Calculations
g. Inflation- adjusted interest rates
h. Measures of Returns
10. Describe Credit
Various methods of availing Credit;
• Limits and Term Loans
• Secured and Unsecured Loans
11. Credit facilities available to an Individual:
11.1. Unsecured Credit Facilities:
• Credit Card
• Personal Loan
11.2 Secured Credit Facilities:
• Home Loan
• Auto Loan
11.3. Education Loan: Secured and Unsecured.
12. Main features of the following credit agreements:
• Hire purchase
• Credit sale
• Credit cards
• Mortgage
• Credit unions
• Other types of credit agreement
• Determining which type of credit agreement is the most appropriate in a given set of
circumstances
• The role of Credit in the life of a consumer:- Benefits and dangers in using credit
• Understanding consumer rights and obligations
13. Credit Disbursal Process:
13.1. Assessing the Creditworthiness of an Individual
• Credit Evaluation:-
o The 7 C’s of Credit:-
o Character
o Capacity
o Capital
o Collateral
o Credit History
o Conditions
o Common Sense
• Consumer Assessments:-
o Gathering Information
o Credit Applications & Credit Agreements
o (Open accounts, cash loans & installment )
o (Which information is asked for & why)
o Credit Bureau – CIBIL, Credit Score
o (include the role of the bureau and consumer information)
13.2. Securing an Account
• Theory of Securities - Role of securities
o Securities available
o Documentation required
o Cost in taking securities
o Value of security when taken
• Practical application of securities - Value of security when needed
o Maintaining securities
o Perfecting securities
o Limitations of Securities
• Insurance
o Debtors
o Goods
13.3 Issues of Life Cycle in Debt Management
14. Financial Mathematics of a Loan:
• Different Rates used in Loans
• Fixed Vs Floating
• Flat Vs. Reducing
• Calculation of Principal Outstanding
• Calculation of Interest Paid
• Calculation of EMI
15. Tax Benefits of Loan: Income Tax Benefits u/s 24, 80 C and 80E
16. Wealth Management Industry: Wealth Management Industry in the Developed World, Wealth Management Industry in the Emerging Markets, Global Trends and Challenges of Wealth Management Industry, Concept of Family Offices, Client Servicing models
Unit-3: Measuring Investment Returns In Wealth Management
Course Objective: Understand risk, return and investor outlook, describe the relationship between risk and return, Understand investor’s ability to take risk and willingness to take risk and identify optimal portfolio allocation
1. Measuring Investment Returns
Understand risk, return and investor outlook
Describe the relationship between risk and return,
Understand investor’s ability to take risk and willingness to take risk and identify optimal
portfolio allocation
Define and understand how to apply the following:
Time value of money
Annuities and its types
EMI
Compounding
NPV
Inflation and tax adjusted interest rates
Holding period return
CAGR & IRR
Distinguish between
Time weighted return Vs. money weighted return,
Real (Inflation adjusted) rate of return vs. nominal return,
2. Know how to assess mutual fund performance using benchmark and peer performance Calculate
1. Total returns
2. Risk-adjusted returns
3. Sharpe ratio
4. Treynor Ratio
5. Jensen’s Alpha
3. Discuss Capital Gains, Types i.e. STCG and LTCG and taxation
Unit-4: Life Cycle Management:
Course Objective: This unit would cover the knowledge requirements relating to life cycle
management including retirement planning for a Wealth Manager professional. The emphasis is on the process of wealth creation and the reviewing retirement planning strategies for clients.
1. Financial Life Cycle
a. Theory of Life Cycle Investing
b. Stages of client financial life cycle.
c. New Measures of Risk and Reward
d. Financial Gerontology- Principles and Issues.
2. Wealth creation
a. Wealth accumulation and erosion
b. Concept of Human Capital.
c. Interaction between Human Capital and Financial Capital.
d. Early retirement, living longer than expected, delaying retirement
e. Effect of inflation
3. Basics of Retirement Planning
a. Issues in retirement planning
b. Importance of retirement planning
c. Life expectancy and career stability
d. Pre-retirement counseling
4. Retirement Benefits
Types of plans
a. Defined benefit plans
b. Defined contribution plans
c. Defined benefits v/s defined contribution plans, employer’s and employee’s perspectives.
d. Trends and reasons for transition
e. Portability of plans
5. Defined benefit plans
a. Gratuity and the Payment of Gratuity Act, 1972
b. Leave Salary
c. Retrenchment compensation and the Industrial Disputes Act, 1947
d. Voluntary Retirement Scheme
e. Nature of defined benefit, tax issues in defined benefit plans, age/service requirements, applicability of plans to clients
6. Defined contribution plans
a. Statutory provident fund, Provident Fund Act, 1925
b. Recognized provident fund, Employee Provident Fund and Miscellaneous Provisions Act, 1952, Employees’ Provident Fund Organization, features, mode of operation and investment norms
c. Unrecognized provident fund
d. Employees’ Pension Scheme, 1995, features, funding of scheme
e. Employees’ Deposit Linked Insurance Scheme, 1976, features, funding of scheme
f. Public Provident Fund, features
g. Nature of defined contribution, tax issues in defined contribution plans, withdrawal norms, applicability of plans to clients
7. Superannuation and other retirement plans
a. Trust funds – fiduciary responsibilities
b. Approved superannuation funds
c. Employer pension plans and applicability to client
d. Private fund managers, investment norms
e. Pension plans from mutual funds and insurance companies
f. Social security benefits – civil servants, defense personnel and war widows, agricultural workers, destitute, disaster affected people, etc.
g. Retirement plans for self-employed
h. Profit sharing plans
8. Group Life and Health Insurance
a. Group insurance contracts and characteristics
b. Basic underwriting principles and eligibility requirements of group plans
c. Group life insurance plans
d. Group medical insurance plans and managed care
e. Group disability-income plans
f. Workers compensation
Retirement Planning and Strategies
9. Retirement needs analysis
a. Determination of financial objectives at retirement
b. Estimating retirement expenses
c. Calculation of retirement funds available to meet objectives
d. Calculation of additional funds needed to meet objectives
10. Retirement income streams
a. Employer pension scheme
b. Commuted and un-commuted pension, tax treatment, advice on commutation
c. Immediate and deferred annuities
d. Other income streams and their tax treatment – fixed deposits, rental income, schemes from
Indian Savings Organization, monthly income plans
11. Post-retirement counseling
a. Investment risk and constraints
b. Investment portfolio evaluation, restructuring of investments or debt
c. Risk tolerance and attitude to equities
d. Client’s health, interests and hobbies, home, vacations, gifting
12. Life Cycle Investment Advise Model
a. The traditional advice model.
b. Role of Human Capital in Investment Advice.
c. Human Capital and Asset Allocation.
d. Human Capital and Life Insurance
e. Retirement Portfolio and Longevity Risk
f. Modeling the Life cycle.
Unit-5: Investment Vehicles Of Wealth Management
Course Objective: Concept, structure, returns measurement (income and/or capital gains), tradability, liquidity and legal issues of the major investment vehicles. The objective is to provide an essential understanding of the products from a risk-return perspective, so that proper product recommendations can be made.
1. Introduction to Financial Product: Overview, What is a Financial Product? How it differs with other products? Features of Financial Instruments, Types of Financial Products, Why knowledge of Financial Products is so important for everybody: Layman, educated, entrepreneur, etc.
2. Banking Products: Evolution of Bank, Features of Banking, Types of Bank, Central banking system, Reserve bank Of India, Schedule Bank and Nationalized banks.
2.1. Types of Bank Deposits: Saving Account, Current Account, Recurring Deposit Account, Fixed Deposit Account, Some Aspects of Deposits Account: New Account Opening, Closing of a Bank Account, Insurance of Bank Deposits, Nomination,
2.2 Mode of Transfer of Funds: Cheques/Drafts, TC, ECS, On-line Transfer, Different Features of cheques, Types of cheques.
2.3 Retail Banking: ATM, Tele Banking, Mobile Banking, Internet Banking, Credit Cards, Types of Cards
2.4 Banking Loan Products: Personal Loan, Home Loan, Auto Loan, Consumer loan, Educational Loan
3. Fixed Deposits: Investment in Fixed Deposit, Benefits & Needs, Choosing the right tenure, Types of Fixed Deposit, Risk & Yield, Pre-mature liquidity & Penalty norms, Company Fixed Deposit,
4. Mutual Funds
a. Concept & Role of a Mutual Fund, Benefits of Mutual Funds, Popular terms used in Mutual
Fund, Types of Mutual Fund, Fund Structure & Constituents, Legal & Regulatory Environment.
b. Offer Document, Fund Distribution & Channel Management Practices, Valuation & Taxation, KYC Requirements for Mutual Fund Investors,
c. Return, Risk & Performance of Funds, Scheme Selection, Selecting the Right Investment
Products for Investors.
d. Helping Investors with Financial Planning, Recommending Model Portfolios & Financial Plans, Examination for Mutual Fund Advisor
e. Mutual Fund Portfolio Planning for Client
5. Others Products - ETF, FMP
6. Small Savings Schemes:
a. PPF
b. NSC, PORD
c. POMIS, SCSC
d. KVP, RBI 8% Taxable Bonds
7. Equity Shares:
a. Type of Equity shares.
b. Corporate Actions: Right Issue, Bonus Shares, Stock Split.
c. Common Terms Associated with Equity Shares: Face Value, Par Value, Dividend, Dividend Yield, EPS, Book Value, Authorised-Issued and Outstanding Share Capital, Treasury Shares.
d. Stock Market Index: Major Indices, Methods of Calculation, Types and uses.
e. Trading of Shares in Stock Market: Demat Accounts, Types of Order, Trading and Settlement.
f. Basics of Equity Valuation: Fundamental and Technical Analysis. Dividend Discount Model,
Multipliers Method of Equity Valuation.
8. Derivatives:
a. Types of derivatives terms associated with derivatives, Difference between futures and
Forwards. Cost of Carry, Margin Requirement for Derivative Trading, Use of derivatives for
hedging.
b. Options: Basic of Options, Terms associated, Difference between Futures and Options,
European and American Options, Intrinsic value of an option, Profit and loss calculations.
c. Option Strategies:
d. Option Premium Pricing models: Binomial Method, Black Scholes Formulae. Option Greeks and their use in option trading.
9. Real Estate:
a. Concept and meaning of Real Estate.,
b. Important features of Real Estate Investment.
c. Difference between Real estate with Security Investments.
d. Characteristics which distinguish Real estate investment from other investments.
e. Advantages, Disadvantages and attraction of Real Estate Investment.
f. Different categories and forms of real estate investment.
g. Housing Loans, Features of Housing Loans, Types of Home Loans. Eligibility for Home Loans, Documentation requirements - pre-approval. Documentation requirements – post-approval/ disbursal stage. Repayment Period, Collateral Securities, Interest rate calculation, Fixed and Floating/ Adjustable rate of Interest, Fees and Charges, Tax Benefits and Guidelines for buying Flat.
h. Features and attraction for investment in agricultural land, farmhouse, urban land.
i. Features of Real Estate Market.
j. Determinates of Real Estate Value.
k. Methods of owning Real Estate
l. Five decision making factors in prioritizing selection of property for investment.
m. Different approaches to the valuation of real estate: Cost method, Sales comparison method, Income method/Capitalization method, discounted cash flow method.
n. Real Estate Investment Trust (REIT), Features of REIT and its eligibility.
o. The salient features of SEBI’s draft guidelines
p. Real Estate Mutual Fund (REMF).
Unit-6: Managing Investment Risk In Wealth Management
Course Objective: This unit would cover the knowledge requirements relating to risk analysis for a Wealth Manager. It introduces students to risk analysis and insurance decisions in Protection Planning in a Wealth Management Plan. Wealth planning for clients’ involves decisions on exposures to mortality, health, disability, property, liability, and long term care. A Wealth Manager should be able to protect their client from these exposures in an efficient manner.
Concepts of Insurance and Risk Management
1.1. Introduction to Insurance
1.1.1. Overview of insurance sector in India
1.1.2. Purpose and need of insurance
1.1.3. How Insurance Works-Mechanism of Insurance
1.1.4. Insurance as a tool to manage risk
1.1.5. Cost and benefits of insurance to individuals and the society
1.2. Basic Concepts of Insurance
1.2.1. Perils and hazards
1.2.2. Law of large numbers
1.2.3. Adverse selection
1.2.4. Insurable risk
1.2.5. Self-insurance
1.3. Insurance and Risk
1.3.1. Meaning of risk
1.3.2. Types of pure risk
1.3.3. The principle of pooling of risk
1.3.4. Methods of handling risk
1.3.5. Difference between insurance and hedging
1.3.6. Advantages and disadvantages of insurance in handling risk
1.3.7. Reinsurance
1.4. Fundamental Principles of Insurance
1.4.1. Indemnity
1.4.2. Insurable Interest
1.4.3. Utmost Good Faith
1.4.4. Subrogation
1.4.5. Contribution
1.4.6. Aleatory Contract
1.4.7. Contract of Adhesion
1.4.8. Unilateral Contract
1.4.9. Proximate Cause
1.5. Risk Management
1.5.1. Meaning and objective of risk management
1.5.2. Understanding the Cost of Risk
1.5.3. Steps in personal risk management
1.5.4. Risk control and risk financing
1.5.5. Insurance market dynamics and the underwriting cycle
1.5.6. Loss forecasting using probability and regression analysis
1.5.7. Construction of a plan
1.5.8. Implementation of a plan
1.5.9. Monitoring the plan
1.5.10. Risk Management and Social Welfare
Insurance Contract and Legal Liability
2.1. The Insurance Contract
2.1.1. Contract-Introduction
2.1.2. Contract Terminology
2.1.3. Elements of Valid Contract
2.1.4. Competent parties
2.1.5. Offer and acceptance
2.1.6. Consideration
2.1.7. Basic parts and common clauses and sections of an Insurance Contract
2.1.8. Distinct legal characteristics of an Insurance Contract
2.1.9. Performance and discharge of Insurance Contract
2.1.10. Insurance policy documents and their legal implications
2.1.11. Sample Insurance contract and Policy Documents
2.2. Important Terms in Insurance Contract
2.2.1. Endorsements/riders
2.2.2. Deductibles
2.2.3. Co-insurance
2.2.4. Assignment
2.2.5. Nomination and beneficiary status
2.2.6. Insurance provisions- Reinstatement value basis and depreciation basis
2.3. Insurance Pricing and Premium Calculation
2.3.1. Objective of rate making/rating
2.3.2. Important factors in rating
2.3.3. Risk assessment and rating
2.3.4. Role of Tariff Advisory Committee
2.3.5. Rate making for life insurance
2.3.6. Rate making property and liability insurance
2.4. Analysis and Selection of Insurance Products and its Provider
2.4.1. Purpose of coverage
2.4.2. Duration of coverage
2.4.3. Participating or non-participating
2.4.4. Cost-benefit analysis
2.4.5. Claim settlement
2.5. Legal Liability
2.5.1. Intentional torts
2.5.2. Absolute liability
2.5.3. Law of negligence
2.5.4. Special tort liability problems
2.5.5. Civil justice system- IRDA, Insurance Ombudsman and Consumer Protection Act-1986
Life Insurance- Analysis of Life Cover, Strategies and Products
3.1. Assessment and Identification of Risk Exposure
3.1.1. Gathering data on current life insurance coverage
3.1.2. Identifying client’s life insurance needs
3.1.3. Analysis of current life insurance coverage and loss of income to family
3.2. Analysis of Life Insurance Needs
3.2.1. Economic value of human life
3.2.2. Replacement of future income of the insured
3.2.3. Replacement of expenses and financial liabilities of the family
3.2.4. Review of coverage in case of change in income and/or financial liabilities
3.3. Types of Life Insurance Policies
3.3.1. Term Insurance
3.3.2. Whole Life Insurance
3.3.3. Endowment Insurance
3.3.4. Investment Linked Insurance
3.3.5. Insurance Linked Annuities
3.3.6. Life insurance policy riders
3.3.7. Annuities
3.3.8. Group Insurance
3.3.9. Industrial Life Assurance
3.3.10. Life insurance premium and tax benefits
3.4. Calculations of Claim Amount and Other Benefits
3.4.1. Bonus- revisionary, performance, maturity, etc.
3.4.2. Maturity claim
3.4.3. Death claim
3.4.4. Surrender value
3.4.5. Return on savings component
3.4.6. Taxation of life insurance policy
3.5. Other Provisions of Life Insurance Contract
3.5.1. Free look-in period and Grace period
3.5.2. Claim concession
3.5.3. Lapse, non-forfeiture provision, surrender and revival
3.5.4. Loans against life insurance policies
3.5.5. Exclusions and restrictions
3.5.6. Suicide clause
General Insurance- Property, Health and Liability Insurance
4.1. General Insurance
4.1.1. Classification of Insurance
4.1.2. Classification of Non-life Insurance
4.2. Health Insurance and Accident Insurance
4.1.3. Individual health insurance
4.1.4. Family floater policy
4.1.5. Critical illness policy
4.1.6. Group health insurance policies
4.1.7. Pre-existing disease clause and other provisions
4.1.8. Personal and group accident insurance
4.1.9. Long-term care insurance
4.1.10. Income assurance- hospitalization and temporary disability
4.3. Personal Disability Insurance
4.2.1. Disability- Permanent and Temporary
4.2.2. Disability- Partial and Total
4.2.3. Scope of benefits- Short-term and long-term disability
4.4. Property and Liability Insurance
4.3.1. Types of Property Insurance
4.3.2. Fire Insurance
4.3.3. Various Types of Engineering Insurance
4.3.4. Contractors All Risk Insurance
4.3.5. Marine Cargo Insurance
4.3.6. Burglary Insurance
4.3.7. Money Insurance
4.3.8. Basis of property cover - Reinstatement, book or market value
4.3.9. Insuring house, household items, business unit, plant and machinery
4.3.10. Personal umbrella policy- Mortgage Cover
4.3.11. Miscellaneous overseas travel insurance
4.3.12. Use of excess/deductible and franchise
4.3.13. Motor Insurance- Comprehensive and Mandatory Third Party Cover
4.3.14. Motor Insurance - No claim bonus and Claims
4.3.15. Liability Insurance
4.3.16. Employers Liability Insurance
4.3.17. Public Liability Insurance
4.3.18. Professional Indemnity Insurance
4.3.19. Product Liability Insurance
4.5. Other Business Specific Insurance
4.4.1. Keyman insurance
4.4.2. Professional indemnity insurance
4.4.3. Employee state insurance liability
4.4.4. Workmen's compensation insurance
Regulatory Framework of Insurance
5.1. Regulations Relating Insurance
5.1.1. Insurance Regulatory and Development Authority (IRDA) Act- 1999
5.1.2. The Insurance Act-1938
5.1.3. Indian Contract Act- 1872
5.1.4. Public Liability Insurance Act- 1991
5.1.5. Motor Vehicle Act- 1988
5.1.6. Consumer Protection Act- 1986
5.1.7. Workmen’s Compensation Act- 1923
5.1.8. Employee State Insurance Act- 1948
5.1.9. Life Insurance Act, 1956
5.1.10. General Insurance Act, 1972
5.1.11. Insurance Advertisements and Disclosure Regulatuions,2000
5.1.12. Protection of Policy holders Interest Regulations, 2002
5.2. Other Regulatory Aspects of Insurance and Agency Law
5.2.1. Laws regarding insurance companies in India
5.2.2. Agency law and functions of an agent
5.2.3. Doctrines of waiver and estoppels
5.3. Insurance Intermediaries
5.3.1. Introduction
5.3.2. Individual Agent: Corporate agent, Code of Conduct
5.3.3. Brokers
5.3.4. Functions of a direct broker
5.3.5. Functions of a re-insurance broker
5.3.6. Functions of composite broker
5.3.7. Procedure for licensing
5.3.8. Validity of licence
5.3.9. Renewal of licence
5.3.10. Remuneration
5.3.11. Professional Indemnity Insurance
5.3.12. Difference between Insurance Agents and Brokers
5.3.13. Capital Requirements of Brokers
5.3.14. Broker Examination and eligibility
5.3.15. Various other intermediaries: Surveyors, loss assessors, consultants etc.
Indian Insurance Market & Prospects
6.1. Indian Insurance Market and Prospects
6.1.1. Introduction
6.1.2. Prospects of Insurance
6.1.3. Nationalization of Life Insurance on India
6.1.4. Privatization of life Insurance in India
6.1.5. Life Insurance Players
6.1.6. Non-life Insurance
6.1.7. Nationalization of General Insurance in India
6.1.8. Privatization of Non-Life Insurance
6.1.9. Catastrophe Insurance
6.1.10. Credit Insurance and Surety
6.1.11. Corporate Governance
6.1.12. Bancassurance
6.1.13. International Insurance Scene
6.2. Micro Insurance
6.2.1. Introduction
6.2.2. Rural Insurance and Prospects of Agricultural Insurance in India
6.2.3. Urban Non-Traditional Insurance
6.2.4. Progress of Miscellaneous General Insurance
6.2.5. Progress of Total General Insurance
Insurance Mathematics
7.1. Probability
7.1.1. Mortality Table
7.1.2. Construction of Mortality Tables
7.1.3. Life Assurance Premiums
7.1.4. Assurance Benefits
7.1.5. Net Premiums for Assurance plans
7.1.6. Net Premiums for Annuity Plans
7.1.7. Premium Conversion Tables
7.1.8. Office values
7.1.9. Policy Values
7.1.10. Methods of Valuation
7.1.11. Special Reserves and Adjustments
7.1.12. Surplus and its Distribution
Financial Planning and Life Insurance
8.1 Financial Planning and Life Insurance
8.1.1 Financial Planning
8.1.2 Emergency Funding
8.1.3 Education Fund
8.1.4 Unemployment
8.1.5 Premature Death
8.1.6 Property Loss
8.1.7 Retirement Planning
8.1.8 Ratios as a tool for Financial Analysis
8.1.9 Factors affecting rating under Life Insurance
Unit-7: Indian Tax Laws
Course Objective: This unit would cover the required knowledge base for Indian Taxation System. Taxation is one certain thing in wealth management. After this unit, the student should be able to:
1. Evaluate the appropriateness of tax strategies for individual family situations.
2. Integrate tax planning into the wealth management process.
3. To understand the universal nature of estate planning needs.
4. To recognize the high level of ignorance regarding estate planning among the general population
as well as students.
Tax Planning Considerations
1. Ethical considerations in tax planning
a. Privileged communications
b. Dangers of tax evasion
2. Tax compliance matters
a. Filing tax returns and documentation
b. Advance tax
c. The audit process
d. Refund of income tax
e. Judicial review
3. Taxation terminology
a. Inclusions
b. Exclusions
c. Deductions
Tax Computations
4. Tax calculations and special rules
a. Gross income
b. Adjusted gross income
c. Itemized deductions
d. Taxable income
e. Tax liability
f. Clubbing of Income
5. Tax characteristics of business forms
a. Sole proprietorship
b. General partnership
c. Limited liability companies
d. Trusts
e. Foundations/exempt organizations
f. Professional associations/corporations
g. Co-operative Societies
6. Non Resident Indians (NRIs)
a. Residential status of individuals
b. Types of accounts for non-residents
c. Investment opportunities for non-residents
d. Tax implication for non-residents
7. Heads of income
a. Salaries
b. Income from other sources
c. Capital gains
d. Business/ profession
e. House property
f. Interest on government securities
8. Capital Gains tax rules
a. Determination of gain or loss
b. Characterization of gain or loss
c. Netting rules
d. Indexation benefits
e. Capital loss limitations
Tax Planning Strategies
9. Tax relief
a. Exemptions
b. Deductions
c. Rebates
10. Non taxable transactions (e.g., gifts, estate)
11. Tax management techniques
a. Deferral and acceleration
b. Maximizations of exclusions and credits
c. Managing loss limitations
d. Capital asset transactions
e. Deductible expenditures of individuals and business forms
12. Interest and penalty taxes and other charges
a. Failure to file tax return or to pay tax
b. Preparer penalties
c. Accuracy related penalties
d. Fraud/concealment penalties
Unit-8: Intergenerational Wealth Transfer And Tax Planning
Course Objectives: Wealth transfer and preservation is as important as wealth accumulation. Few things are more important to an individual than planning his or her estate. This determines who will receive your wealth at your death, how much of your wealth will go to the government in taxes, and whether your property will pass through a probate estate.
Estate and Gift Tax Planning
How property may be transferred
a. Gift
b. Probate (bequest, intestate succession)
c. Ownership (Joint-tenancy, tenancy by entirety)
d. Contract (beneficiary of a life insurance policy, pension plan, etc.)
e. Trust
Will: Definition, characteristics, Origin and Growth of Law of Wills in Hindu Law, Origin and Growth of law of Wills under Mohammedan Law, Law of Will for Hindus, Intention Should Take Effect After Death, Legal Declaration of the Intention, Declaration of Intention Should be with respect to Testator’s Property, Different kinds of Will, Who can make a will?, What properties can be disposed of in a will & to what extent? How to prepare a will?, Registration & deposits of wills, Personal disabilities of Testator, Power of Appointment with the testator, Proof of will, Will obtained by fraud, coercion, undue influence importunity, Revocations, alterations and revival of wills, How to prove a will? Wills creating trusts, Mohammedan Law of Wills, Tax planning through wills. What happens when no will is prepared?
Intestate Succession: History and Growth of Law of Succession under Hindu law, The Hindu Succession Act, 1956. Hindu Dying Intestate, Law of Succession for property of a Hindu male, Law of succession for property of a Hindu Female, General provisions relating to Succession, History of Growth of Succession under Mohammedan law, Distribution of assets among the Shareholder, Residuaries and Distant kindred, Succession in accordance with Shia law
Transfer of Property: Meaning of Property, Immovable Property, Freehold Property, Leasehold Property, Covenants, Covenants Affecting Freehold Land, Mutation, Power-of attorney, Meaning of POA, Parties to POA, Classes of POA, Distinction between POA and Vakalatnama, The General and Standard form of POA,
Trusts
Introduction to Trust: What is a Trust, Why a Trust advantages, Need for a trust deed, Types of Trusts, Features of trusts, parties to a trust, trust documentation, Foundations – definition, characteristic of foundations, parties to a foundation structure, documentation & tax considerations, Trusts v. Foundations
Registration of Public Trusts, Public Trust under the Islamic Law, Is Family Control of Public Trusts possible?
Private Trusts: Certain Definition, Salient points relating to certain of a Private Trust, Rights of the Beneficiary, Liability of Beneficiary joining in breach of Trust, Rights and liabilities of beneficiary’s transferee, Rights and powers of Trustees, Duties of trustees, Liability of Trustees for breach of Trust, Disabilities of Trustees, Provision relating to vacation of office of Trustee, Extinction of Trusts, Revocation of Trusts, Cases where an obligation in the nature of a trust created, Obliger’s duties, liabilities and disabilities
Society as a form of charitable Organization: Minimum number of Members, Memorandum of association, Registration and fees, Requirement to file Annual list of managing body, Vesting of Property of Society, Suits by and against societies, Suits not to abate, Enforcement of Judgment against Society, Recovery of penalty, Members liable to be used as a strangers, Member guilty of offences punishable as strangers, Alteration, etc, of its purposes by the societies, Dissolution of societies
Wakfs: Importance, Constitutional Position, Original of Wakf, Purpose or objects of a Wakf, Essential of Wakf, Kinds of Wakf, Wakf and Trusts distinguished, Applicability of the Wakf Act, 1995, Definition of Key terms, provisions relating to survey of wakf, Provision relating to Central Wakf Council, Provisions relating to establishment of State Wakf Bonds, Requirements relating to registration of Wakfs, Accounts of Wakfs, Finance of the Board, Judicial Proceedings, Other Provisions
Foreign Contributions and Donations: Key definitions, Application of other laws not barred, Regulation of Foreign Contribution and Foreign Hospitality, Other Miscellaneous Provisions
Trust Deed: Salient points relating to a Trust deed, General Trust Deed, Trust Deed for Providing
Medical Facilities to Poor Persons, Trust for running a school, Deed WAKF-alal-aulad, Wakf for Public
Purposes, Trust Deed constituting Superannuation Fund, Trust deed constituting Pension Fund,
Appointment of a new Trustee. Check list of Trust Deed
Tax Implication of Public Trust and Institutions: Charitable/Religious objects, Section 10 Vis-à-vis
Charitable Institutions, Income from property held for charitable religious purposes, Income of trusts
or institutions from contributions, Registration of trusts, Withdrawal of exemption, Deduction in
respect of donation to certain funds, charitable institutions etc, Assessment in tax management of
charitable and religious trusts, Practice Problems
Tax Implications of Private Trusts: General, Representative Assessee, Liability of a representative Assessee, Right of Representative assessee to recover tax paid, Charge of tax where share of beneficiaries unknown, Charge of Tax in case of oral Trust, Case where part of trust income is chargeable, Direct assessment or recovery not barred, Remedies against property in case of representative assessee, If the share of the beneficiaries are determinate and trust income does not include, if the share of the beneficiaries are determinate and trust income includes business income also, if the share of the beneficiaries are indeterminate or unknown and trust income does not include business income, if the shares of the beneficiaries are indeterminate or unknown and trust income includes business income, Private cum public trust, ie, trust partly for charitable/religious purposes and partly for other purposes, Charge of income tax in case of oral trust
Public Institutions Vs. Private Benefits: Stability, Family control possible, Deduction on Donations, Indian Trust Act, 1882, Maintain Public Character, Bar on private benefits, What is expensive benefit to interested person, Exemptions for both-Trust and Institutions
HUF: Meaning, How to form a HUF, HUF opening a bank A/c, Demat A/c, HUF whether can do business, Rebates/deduction available under IT Act, Whether can give or receive gifts, How to dissolve or discontinue a HUF, HUF investment options, Multiple HUF, Whether a single member can form HUF?, Whether can be constitute only with female members? HUF-speculation income-status, HUF-drawings, HUF-whether can be a shareholder or a subscriber to MOA of a company? HUF-Whether can be a proprietor? HUF can be a trustee/settlor? HUF-recent amendments in the Hindu succession Act
HUF-meaning of karta, managing member and whether a female can become a karta? HUF-compliance with TDS provisions, HUF-check list for tax purposes, HUF-Tax Planning, HUF Gift Tax, HUF-Wealth Tax, Meaning of important terms relating to HUF, KUF-whether any restrictions on no of membership in HUF? Whether Husband/wife can form a HUF? Meaning of the term of Coparcener, HUF-audit & account books, Residential Status, Capital Gains, Whether can hold credit cards/debit cards, ATM cards, or can apply for internet banking,
Wealth Tax: Applicability, Meaning of different terms, Charge of wealth tax, Valuation of assets, Return of wealth, Self assessment, assessment in the case of executors, assessment after partition of HUF, Assessment in cases of diversion of property, or of income from property, held under trusts for public charitable or religious purpose, Assessment when assets are held by certain AOP, assessment of persons residing outside India
Unit 9: Role Of Wealth Management In Banking
Introduction to Banking
1.1 Fundamental Role and Evolution
1.1.1 India
1.1.2 United States
1.2 Banking Structure in India
1.3 Licensing of Banks in India
1.4 Branch Licensing
1.5 Foreign Banks
1.6 Private Banks – Capital and Voting Rights
1.7 Dividend
1.8 Corporate Governance
Banking and the Economy
2.1 Cash Reserve Ratio (CRR)
2.2 Statutory Liquidity Ratio (SLR)
2.3 Repo and Reverse Repo
2.4 Open Market Operations
2.5 Security Valuation
2.6 Capital Account Convertibility
Bank Deposits, Nomination and Deposit Insurance
3.1 Kinds of Deposits
3.1.1 Demand Deposits
3.1.2 Term Deposits
3.1.3 Hybrid Deposits / Flexi Deposits
3.1.4 Non-Resident Accounts
3.2 Joint Accounts
3.3 Nomination
3.4 Closure of Deposit Accounts
3.5 Deposit Insurance
Other Banking Services
4.1 Fund-based Services
4.1.1 For Business
4.1.2 For Individuals
4.2 Non-Fund-based Services
4.2.1 For Business
4.2.2 For Individuals
4.3 Money Remittance Services
4.3.1 Demand Draft / Banker’s Cheque / Pay Order
4.3.2 National Electronic Funds Transfer (NEFT)
4.3.3 Real Time Gross Settlement (RTGS)
4.3.4 Society for Worldwide Interbank Financial Telecommunications (SWIFT)
4.4 Banking Channels
Bank - Customer Relationship
5.1 Roles of Banks
5.1.1 Bank as Debtor
5.1.2 Bank as Creditor
5.1.3 Bank as Bailee
5.1.4 Bank as Agent
5.1.5 Bank as Lessor
5.1.6 Bank as Executor / Trustee
5.2 Bankers’ Obligation of Secrecy
5.2.1 Disclosure under Law
5.2.2 Disclosure based on customer’s consent
5.2.3 Disclosure with Credit Information Bureaus
5.2.4 Disclosure with Business Correspondent / Business Facilitator (BC/BF)
5.2.5 Disclosure in Bankers’ Interest
Security Creation
6.1 Pledge
6.2 Hypothecation
6.3 Mortgage
6.3.1 Simple Mortgage
6.3.2 Mortgage through Conditional Sale
6.3.3 Usufructuary Mortgage
6.3.4 English Mortgage
6.3.5 Equitable Mortgage / Mortgage by Deposit of Title Deeds
6.3.6 Anomalous Mortgage
6.4 Assignment
NPA and Securitization
7.1 Non-Performing Assets
7.2 NPA Categories
7.2.1 Sub-Standard Assets
7.2.2 Doubtful Assets
7.2.3 Loss Assets
7.3. NPA Provisioning Norms
7.3.1 Loss Assets
7.3.2 Doubtful Assets
7.3.3 Sub-standard Assets
7.3.4 Standard Assets
7.4 SARFAESI Act
7.4.1 Securitization
7.4.2 Asset Re-construction
7.4.3 Enforcement of Security Interest
7.4.4 Central Registry
7.4.5 Resolution of Disputes
7.4.6 Debt Recovery Tribunal (DRT)
7.4.7 Appellate Tribunal
Understanding a Bank’s Financials
8.1 Balance Sheet
8.2 Profit and Loss Account
8.3 CAMELS Framework
BASEL Framework
9.1 Bank for International Settlements (BIS)
9.2 Basel Accords
Regulatory Framework
10.1 Anti-Money Laundering and Know Your Customer
10.1.1 Money Laundering
10.1.2 Terrorist Financing
10.1.3 Know Your Customer (KYC)
10.1.4 Customer Risk Categorization (CRC)
10.1.5 Customer Identity and Due Diligence
10.1.6 Wire Transfers
10.2 Banking Ombudsman Scheme, 2006
11.1 Indian Contract Act, 1872
11.1.1 Proposal and Promise
11.1.2 Agreement and Contract
11.1.3 Appropriation of Payments
11.1.4 Effect of Novation / Rescission
11.1.5 Breach of Contract
11.1.6 Indemnity and Guarantee
11.1.7 Principal and Agent
11.2 Sale of Goods Act, 1930
11.2.1 Goods
11.2.2 Documents of title to goods
11.2.3 Sale and Agreement to Sell
11.2.4 Condition and Warranty
11.2.5 Implied Undertakings
11.2.6 Passing of property
11.2.7 Unpaid Seller
11.3 Negotiable Instruments Act, 1881
11.3.1 Negotiable Instrument
11.3.2 Promissory Note
11.3.3 Bill of Exchange
11.3.4 Cheque
11.3.5 Holder and Holder in due course
11.3.6 Negotiation
11.3.7 Endorsement / Indorsement
11.3.8 General Crossing of Cheque
11.3.9 Special Crossing of Cheque
11.3.10 When payable
11.3.11 Payment in due course
11.3.12 Dishonour
13.3.13 Dishonour of Cheque for insufficiency of funds (Sec 138)
11.4 The Limitation Act, 1963
Unit-10: Legalities In Wealth Management
Course Objectives: Legalities in Wealth Management focuses on statutes and regulations affecting businesses, families, and individuals in their related roles in managing and accumulating wealth. Legalities in Wealth Management is a unit designed to give students the knowledge they need regarding a basis of law while preparing students to make ethical, legally-minded, professional decisions currently and in the future.
1. Introduction to Law: The Essence of Law, Law and Business, Law and Wealth Management, Sources of Law, Criminal and Civil Law, Methods of Resolving Civil Disputes, Methods of Enforcing Civil Judgment
2. Meaning & Essentials of a Contract: Offer, Acceptance, Consideration, Intention to create legal relations, Variation of Contract, Parties to the Contract
3. Offer & Acceptance: Communication of offer & acceptance,
4. Considerations: Meaning of Considerations, Essentials of Valid Consideration, Contract Without Consideration
5. Capacity of Parties to contract: Who is competent to contract,
6. Flaw in consent, Misrepresentation, Fraud, coercion, mistake,
7. Illegal agreement, void & voidable agreement, Breach of contract & remedies
8. Law of Agency: The essence of Agency, Agent-Principal Relationship, Principal-Third Party Relationship, Agent-Third Party Relationship
9. Formation of Companies: Promotion, Incorporation, Commencement of Business, Memorandum of Association, Articles of Association, Types of company
10. Various Act
a. Workmen’s Compensation act
b. Employees Provident Fund Act
c. Employees State Insurance Act
d. Consumer Protection Act
e. Employees Provident Fund Act
f. Payment of Gratuity Act
g. The Negotiable Instrument Act
h. IRDA Act, Insurance Act, 1938, Married Woman Property Act
i. Transfer of Property Act
j. Succession Act
k. Law of Trusts
l. Income Tax Act in Wealth Management
11. Anti Money Laundering
11.1 Money Laundering - Origin - Definition - Techniques Impact on Banks -
Structuring; Integration, Preventive Legislations –
International Co-operation -
UK; USA; India - Basel Committee - PMLA Objectives - RBI Guidelines -
System Adequacy to Combat Money Laundering - Antiterrorism finance -
Financial Intelligence Unit (FIU)
11.2 Governing Standards:
International standards and standard setters including FATF and OECD, UN, OFAC and
other sanctions.
Practical implementation
International impact on your region
The Financial Action Task Force (FATF) - IBA Working Group - Software for
11.3 AML Screening: Money Laundering and Correspondent Banking - Exchange Companies - Foreign Branches
11.4. Terrorist Financing: Defining Terrorist Financing, FATF’s 9 Special Recommendations, How terrorism is funded, Preventing and detecting terrorist financing.
11.5. Know Your Customer - Introduction and overview, Due Diligence
• Customer Profile - KYC Policies - Countries Deficient in KYC Policies,
• Initiatives by the RBI - Organized Financial Crimes Customer - Definition under the KYC Principles - Transaction Profile - Organizational Structure – Important KYC framework in RBI prescriptions - Operating Guidelines.
• Introduction of new accounts - Guidelines for Opening Accounts of Companies, Trusts, Firms, Intermediaries etc., Client Accounts opened by Professional Intermediaries - Trust / Nominee or Fiduciary Accounts - Accounts of Politically Exposed Persons (PEPs)
Residing outside India, Higher Risk Accounts, Accounts of ‘non-face-to-face’ Customers - Qualitative data - Joint accounts - Minor accounts - KYC for existing accounts - KYC for low income group customers.
• Monitoring Accounts - Customer research - Suspicious transaction
11.6. Identifying & Reporting Suspicious Activity Warning Signs, Laundering Methodology, Identifying Suspicious Activity, Internal Reporting, External Reporting
11.7. Preventative Measures: Policies and procedures, Essential systems and controls, Competence, fitness and propriety, Staff recruitment and vetting, making use of technology
12. Islamic/ Sharia Banking
12.1 Islamic Economic System: Introduction to Economic Theories and Islamic Economic System,
The Historical Development of Islamic Banking, Islamic Commercial law, The Basic Prohibitions, Qard and Dayn in Islamic banking, Principles of Islamic Commercial Contracts’ Islamic law of Sale and Purchase
12.2 Modes of Shari'ah-Compliant Transactions: Introduction to Islamic Modes of finance, Nonparticipatory Modes of finance, Participatory Modes of finance, Accessory Modes
12.3 Islamic Banking Operations: Key Characteristics of Islamic Banking Operations, Islamic Retail Banking Services, Islamic Investment Management Services, Corporate Banking Services, Investment Banking in Islamic Banks, treasury and International Banking
12.4 Governance, Regulation, Accounting Issues in Islamic Banking: Social Responsibility and Internal Controls, Regulatory Compliance Functions, Risk Management in Islamic financial Institutions, Modern trends in Islamic Banking
12.5 Introduction to Islamic Insurance (Takaful): Insurance and the Introduction of Takaful, Takaful and Retakaful
Level – 2 Advanced Level
Unit 1 Advanced Concept in Wealth Management
Unit 2 Relationship Management by a Wealth Manager
Unit 3 Use of Behavioral Finance in Wealth Management
Unit 4 Wealth Management Planning
Unit 5 Equity Analysis
Unit 6 Portfolio Management Strategies
Unit 7 Loan & Debt Management
Unit 8 Use of Alternative Products in Wealth Management
Unit 9 Real Estate Valuation and Analysis
Unit 10 International Taxation and Trust Planning
Chartered Wealth Manager
Course Curriculum – Level 2
Unit-1 Advanced Concepts In Wealth Management
Course Description: This unit builds upon the foundations in Wealth Management and the knowledge requirements to enable the Wealth Manager to construct a comprehensive Wealth Plan for a client. This unit also covers the strategies to setup a successful Wealth Management practice. This unit would be taught as a case study based unit.
Modern Wealth Management Theory
a. Advanced Portfolio Analysis
b. Risk and Diversification
c. Managing Risk
d. Sophisticated Portfolio Management
e. Structured Products
f. Managing and constructing large-scale portfolios
g. Managing inherited wealth
Wealth Management Process
1. Establishing Client - Manager Relationship
a. Explain issues and concepts related to overall wealth management process, as appropriate to the client
b. Explain services provided, the process of wealth planning, documentation required
c. Clarify clients and Wealth Manager Responsibilities
2. Know your client aspirations
a. Obtain information from client through interview/ questionnaire about financial resources and obligations
b. Determine client’s personal and financial goals, needs and priorities
c. Assess client’s values, attitudes and expectations
d. Determine client’s time horizons
e. Determine client’s risk tolerance level
f. Collect applicable client records and documents
3. Check the client’s resources by analyzing and evaluating the client's information
A. General
a. Current financial status (e.g., assets, liabilities, cash flow, debt management)
b. Capital needs
c. Attitudes and expectations
d. Risk tolerance
e. Risk management
f. Risk exposure
B. Finding client’s goals
a. Emergency funds
b. Children’s education
c. Children’s marriage
d. Buying real assets like home, car, durables, etc.
e. Future lifestyle needs
C. Planning for special situations
a. Divorce / remarriage considerations
b. Charitable planning
c. Adult dependent needs
d. Disabled child needs
e. Education needs
f. Terminal illness planning
g. Entrepreneurial needs planning
D. Risk management
a. Life insurance needs and current coverage
b. Disability insurance needs and current coverage
c. Medical insurance needs and current coverage
d. Long – term care insurance needs and current coverage
e. Homeowners insurance needs and current coverage
f. Auto insurance needs and current coverage
g. Commercial insurance needs and current coverage
h. Other liability insurance needs and current coverage (e.g., umbrella, professional, errors and omissions, directors and officers)
E. Retirement
a. Current retirement plan tax exposures
b. Current retirement plans
c. Retirement strategies
F. Employee benefits
a. Available employee benefits
b. Current participation in employee benefits
G. Investments
a. Current investments
b. Current investment strategies and policies
H. Taxation
a. Tax returns
b. Current Tax strategies
c. Tax compliance status (e.g., estimated tax )
d. Current tax liabilities
I. Estate planning
a. Estate planning documents
b. Estate planning strategies
4. Developing and Presenting the Wealth Management Plan
Developing and preparing a client-specific Wealth Management Plan tailored to meet the goals and objectives of client, commensurate with client’s value, temperament, and risk tolerance, covering:
1. Financial position
a. Current statement
b. Projected statement
c. Projected statement with recommendations
2. Cash flow
a. Projections
b. Recommendations
c. Projections with recommendations
3. Capital needs at retirement
a. Projections
b. Recommendations
c. Projections with recommendations
4. Capital needs projections at death
a. Recommendations
b. Projections with recommendations
5. Capital needs: disability
a. Recommendations
b. Projections with recommendations
6. Capital needs: General needs
a. Recommendations
b. Projections with recommendations
7. Capital needs: special needs
a. Recommendations
b. Projections with recommendations
8. Income tax
a. Projections
b. Recommendations
c. Projections with strategy recommendations
9. Employee benefits
a. Projections
10. Asset allocation
a. Statement
b. Strategy recommendations
c. Statement with recommendations
11. Investment
a. Recommendations
b. Policy statement
c. Policy statement with recommendations
12. Risk
a. Assessment
b. Recommendations
13. List of prioritized action items
a. Presenting and reviewing the plan with the client
b. Collaborating with the client to ensure that plan meets the goals and objectives of the client, and revising as appropriate
5. Stress Testing the Wealth Management Plan
• Scenario Analysis
• Monte Carlo simulation
• Stress Testing the Plan- Macro-economic stress testing and Micro Level Stress Testing.
6. Implementing & Executing the Wealth Plan
a. Assist the client in implementing and recommendations
b. Coordinate as necessary with other professionals, such as accountants, attorneys, real estate agents, investment advisors, stock brokers and insurance agents
7. Monitoring the Wealth Management Plan
a. Monitor and evaluate soundness of recommendations
b. Review the progress of the plan with the client
c. Discuss and evaluate changes in client’s personal circumstances, (e.g., birth/ death, age, illness, divorce, retirement)
d. Review and evaluate changing tax law and economic circumstances
e. Make recommendations to accommodate new or changing circumstances
Issues in managing your Wealth
1. Real Estate Investment
a. Rent or Buy
b. Buying with Mortgage
c. Shopping for a Housing Loan
d. The second house- Do you need it?
2. Building a Pension
a. Use of small saving schemes in building pension
b. Life insurance pension plans
c. New Pension Scheme
d. Reverse Mortgage
e. Rental Income as pension
3. Building wealth through equity
a. Building an equity portfolio
b. Maintaining an equity portfolio
c. Equity Allocation at different life cycle stages.
d. Protecting the equity portfolio
4. Building wealth through Fixed Income Portfolio
a. Building a Debt Portfolio
b. Balancing between Current and Capital Income
c. Use of Duration in Bond Portfolio
d. Bond Portfolio Immunization
Unit-2: Relationship Management By A Wealth Manager
Course Objective: Customer relationship management (CRM) is a widely implemented strategy for managing Wealth Managers interactions with customers, clients and sales prospects. It discusses techniques to find, attract, and win new clients, nurture and retain those the wealth manager already has, entice former clients back into the fold, and reduce the costs of marketing and client service
1. Interpersonal relationship and wealth management
a. The interpersonal relationship
b. The wealth manager and his client: the relationship interpretation model
c. Interdependence and expectations in the wealth manager-to-client relationship
d. Effectiveness and efficiency in relationship management
2. Generation, accumulation and preservation of wealth through different cultures
a. The idea of wealth
b. The club of the wealthy
3. A review of the common understanding of wealth
a. In western Christian culture (the Roman Catholic legacy, the Protestant legacy)
b. In non-European cultures (Middle East and the Arab world, Far East)
4. Private wealth and the community: Social Positioning of the wealthy in the cultural environments
a. The wealthy and his social consideration and status
b. Wealth and power: a multicultural review
c. The moral meaning and the social impact of a loss of wealth
5. Effective management of the client relationship
a. Information as a strategic resource for the wealth manager
b. Sources of information and their critical evaluation-The client as a primary source of information
c. Data mining techniques
d. Organizing and using information: the customer database
e. Structuring your customer database
f. Criteria for an effective database segmentation
6. Drawing and implementing a viable customer relationship development Strategy.
a. Setting objectives
b. Planning actions
c. Verifying achievements
7. The daily handling of the relation
a. Person to person
b. Telephone
c. Internet related media
8. Communication and negotiation
a. Customer first: learn to listen
b. Negotiating with your customer: the art of consensus building
c. Flexible negotiation method: the transactional analysis
d. Deciphering your customer: The problem of semantics in a multicultural business milieu
e. Communicating unpleasant news
f. Time may come to say “Enough”
Unit-3 Use Of Behavioral Finance In Wealth Management
Course Objective: The course is focused on behavioral factors influencing financial markets and corporate world. This course targets the link between the peculiarities of human behavior and aspects of financial and investment management, as well as Corporate and risk management. In addition, the course puts various “behavioral mechanisms” into more basic psychological framework spanning the mechanisms of information perception, emotions, memory, and attention.
1. Introduction to Behavioral Finance
a. Conventional finance and challenges to market efficiency.
b. Investment Decision Cycle: Judgment under Uncertainty
c. Utility/ Preference Functions: Expected Utility Theory [EUT]
d. Brief History of Rational Thought: Pascal-Fermat to Friedman-Savage
e. Paradoxes (Allais and Others)
f. Prospect Theory
2. Heuristics and Biases
a. Anchoring and adjustment
b. Availability heuristic
c. Representativeness heuristic
d. Naïve diversification
e. Escalation of commitment
f. Loss aversion
g. Disappointment
h. Status quo bias
i. Gambler's fallacy
j. Self-serving bias
k. Money illusion
3. Anomalies (economic behavior)
a. Disposition effect
b. Endowment effect
c. Inequity aversion
d. Reciprocity
e. Inter temporal consumption
f. Present-biased preferences
g. Momentum investing
h. Greed and fear
i. Herd behavior
j. Sunk-cost fallacy
4. Anomalies (market prices and returns)
a. Equity premium puzzle
b. Efficiency wage hypothesis
c. Price stickiness
d. Limits to arbitrage
e. Dividend puzzle
f. Fat tails
g. Calendar effect
5. Specific behavior of individual investors
a. Hope maximization or how good can things get?
b. Regret minimization or how bad can things get?
c. Investor’s objectives, risk tolerance and decision making process
d. Self attribution bias
6. Group Behavior:
a. Conformism
b. Herding
c. Fatal attractions
7. Investing Styles and Behavioral Finance
Unit-4: Wealth Management Planning
Course Objective: This unit covers the techniques and processes which a Wealth Manager should follow to manage the wealth of their clients. Excellent Planning of Wealth and creating a workable Wealth Plan is essential skills that a Wealth Manager should acquire.
1. Structuring the wealth management process
a. Needs analysis
b. Personal asset and liability management
c. Investor’s profile
d. Optimal asset allocation and Security Selection
e. Documentation, reporting and evaluating the investment advice
2. Basic concept
a. Comparing outcomes of investments
b. Utility functions and indifference curves
c. Expected utility approach
d. Expected utility and the mean-variance framework
3. Assets and Liabilities Categories
3.1. Asset Categories
a. Stocks and stocks funds
b. Bonds and bonds funds
c. Real estates and real estate funds
d. Alternative assets and hedge funds
e. Cash and money market funds
f. Pension fund
g. Human capital
h. Investor profile and human capital
i. Definition and calculation of the FCF and NPV derived from human activity
j. Correlation between human capital and assets classes
k. Role of life insurances
3.2. Liabilities categories
a. Mortgages
b. Operational liabilities
c. Consumption needs
d. Financial needs
e. Other liabilities
4. Client’s profiles
4.1. Various Basis of Profiling
a. Setting return objectives
b. Risk Assessment
c. Time horizon
d. Liquidity need
e. Taxes
f. Updating the profile
4.2. Client’s assets and liabilities assessment
a. Pro forma financial statements
b. Ratios Used To Analyze Financial Statements
c. Base currency
d. Assets description
e. Liabilities description
f. Revenue and evolution of the revenue
g. Consumption and evolution of the consumption (operational liabilities)
h. Surplus calculation
i. Taxation- Marginal Tax Rate.
j. Financial Analysis
5. Optimal Asset Allocation and Security Selection
a. Expected return, expected volatilities, expected correlations of the assets categories
b. Client constraints
a. Situational constraints (liquidity needs, real estate, marginal tax rate, expected free cash flows)
b. Non-situational constraints (value at risk local and global, minimum and maximum positions for a specific asset, level of debts)
6. Asset Mix Techniques and Rebalancing
7. Portfolio Performance Appraisal
Construction of the efficient frontiers
(A) With situational constraints, with and without taxes
(B) With situational and non-situational constraints, with and without taxes Determination of the optimal portfolio and the corresponding asset allocation with the client
• Optimal portfolio for a given level of expected return
• Optimal portfolios for a given level of risk
• Optimal portfolios for a given level of value at risk
(C) Choice of the management style
(D) Tactical considerations regarding the implementation of the optimal portfolio
8. Products choice
a. Criteria that a product must satisfy
b. Tax considerations
c. Insurance-linked products
d. Integration of the products
9. Funds selection
a. Advantages and disadvantages of mutual funds
b. The fund selection process
c. Tax considerations
10. Managing Investments & Creating Portfolios
11. Investment Policy and Performance Measurement
12. Ongoing control
a. Intervention criteria
b. Use of new information to modify strategies
c. Assessment of the intervention and documentation
Unit-5: Equity Analysis
Course Objectives: The Securities Analysis unit focuses at introducing the students about the various aspects of securities analysis. The unit covers the technical analysis techniques and the fundamental analysis techniques.
1. Equity Valuation and Analysis
1.1. Equity markets and structures
Types of equity securities
Indices
1.2. Fundamental Analysis
Economic Analysis
Industry Analysis: Porters theory of competitive advantage
Company Analysis: Non- Financial
Company Analysis: Financial- Ratio Analysis, Common Size Statements, Trend Analysis.
1.3. Valuation model of common stock
Dividend discount models
Free cash flow model
Measures of relative value
1.4. Technical Analysis:
Basis of technical Analysis
History Tends to repeat itself
Benefits of Technical Analysis
Fundamental vs Technical
Dow Theory
What is Trend
1.5. Charts
Line Chart, Bar Chart and Candlestick Chart
Patterns- Bullish Patterns Bearish Patterns Neutral Patterns Reversal Patterns Other Chart Patterns
Support and resistance Trading Range Trend Lines Double Top pattern Double bottom pattern
Head and Shoulder Flags and pennants
1.6. Technical Indicators:
Moving Average Simple and Exponential Moving Averages Moving Average Conversion and Diversions Relative Strength Index Stochastic Oscillator On Balance Volume William % R Bollinger Bands Parabolic Sar Gap and Gaps Analysis
1.7. Other Indicators
Aroon Average True Range Demand Index Ease of Movement Ichimoku Kinko Hyo Intraday
Momentum Index Kagi MACD Mass Index Money Flow Index Renko Three Line Break Alpha Omega
Simple Daryl Guppy MMA RMO Trade Model
Elliot Wave Theory
Fibonacci Numbers
Golden Rules of Trading and Technical Analysis
2. Derivative Valuation and Analysis
2.1 Futures and forward contracts
Basic characteristics of forward and futures contracts
Mechanics of trading in futures markets
Examples of various futures contracts
Futures valuation and analysis
Introduction to hedging strategies using futures
2.2. Options
Basic characteristics of options contracts
Options valuation
Option pricing models
Binomial pricing model
Sensitivity analysis of options premiums
Unit-6: Portfolio Management Strategies
Course Objective: This unit includes introduction to Investment Management. The process followed by a Wealth Manager to manage investments and it incorporates the building blocks of knowledge required to manage investments. The later part of the unit discusses various methods of portfolio analysis, portfolio evaluation and portfolio management techniques.
Introduction to Investment Management
1. Investment management process and steps
• Specification of investment objectives & constrains
• Choice of the asset mix
• Formulation of portfolio strategy
• Selection of securities
• Portfolio Execution
• Portfolio Revision
• Performance Evaluation
2. Investment risk
a. Definition of risk
b. Types of risk
Market risk
Reinvestment risk
Interest rate risk
Purchasing power risk
Liquidity risk
Political risk
Exchange rate risk
3. Measuring risk
a. Standard deviation
b. Beta
4. Managing risk
a. Diversification
Diversifiable and un-diversifiable risk
Product diversification
Time diversification
b. Hedging
5. Returns
a. Relationship between risk and return
b. Compounding
Types of returns
CAGR
Total returns
Risk-adjusted returns
Post-tax returns
Tax on capital gains
Tax on income
Holding period return
Yield to maturity
6. Investment portfolio
a. Risk and return on a portfolio
b. Measuring portfolio risk
c. Effect of diversification on portfolio risk and return
7. Pricing Models:
a. Capital Asset Pricing Models
b. Modern Portfolio Theory
c. Arbitrage Pricing Model
8. Asset Allocation
a. Importance of Asset Allocation
b. Strategic Asset Allocation
c. Tactical Asset Allocation
9. Rebalancing Techniques:
a. Buy and Hold.
b. Constant Mix Strategy.
c. Constant Proportion Portfolio Insurance.
10. Investment Strategies:
a. Active Strategies
b. Passive Strategies
c. Value Investing
d. Investing for Growth
e. Momentum Trading
f. Contrarian Investing
11. Asset/liability-analysis and management
a. Introduction
b. Modeling liabilities
c. Modeling assets
d. Surplus and funding ratios
e. Integrated optimization
f. Implementation of strategies
12. Practical portfolio management
a. Derivatives in portfolio management
b. International investments
Unit-7: Loan And Debt Management
Course Objective: The objective of the unit is to enable the student to understand the various types of secured and unsecured loans, benefits of loans and best practices in Debt Management.
Describe Credit
Various methods of availing Credit;
• Limits and Term Loans
• Secured and Unsecured Loans
Credit facilities available to an Individual:
Unsecured Credit Facilities:
• Credit Card
• Personal Loan
Secured Credit Facilities:
• Home Loan
• Auto Loan
Education Loan: Secured and Unsecured.
Main features of the following credit agreements:
• Hire purchase
• Credit sale
• Credit cards
• Mortgage
• Credit unions
• Other types of credit agreement
Determining which type of credit agreement is the most appropriate in a given set of circumstances. The role of Credit in the life of a consumer:- Benefits and dangers in using credit Understanding consumer rights and obligations Credit Disbursal Process:
Assessing the Creditworthiness of an Individual
• Credit Evaluation:-
o The 7 C’s of Credit:-
o Character
o Capacity
o Capital
o Collateral
o Credit History
o Conditions
o Common Sense
• Consumer Assessments:-
o Gathering Information
o Credit Applications & Credit Agreements
o (Open accounts, cash loans & installment )
o (Which information is asked for & why)
o Credit Bureau – CIBIL, Credit Score
o (include the role of the bureau and consumer information)
Securing an Account
• Theory of Securities - Role of securities
o Securities available
o Documentation required
o Cost in taking securities
o Value of security when taken
• Practical application of securities - Value of security when needed
o Maintaining securities
o Perfecting securities
o Limitations of Securities
• Insurance -
o Debtors
o Goods
Issues of Life Cycle in Debt Management
Financial Mathematics of a Loan:
• Different Rates used in Loans
• Fixed vs Floating
• Flat Vs. Reducing
• Calculation of Principal Outstanding
• Calculation of Interest Paid
• Calculation of EMI
• Tax Benefits of Loan:
• Income Tax Benefits u/s 24, 80 C and 80E
Unit-8: Use Of Alternative Products In Wealth Management
Course Objective: Explains the importance of alternative assets and discusses the sources of return to this asset class in terms of beta and alpha drivers. Describes various hedge fund strategies, explains their sources of risk and return and provides historical data showing their distributional characteristics. Discusses the role of incentive fees in the performance of hedge funds and analyzes several cases involving hedge fund liquidations. Discuss the role and structure of Managed futures, Private equity and Collateralized Debt Obligations.
The unit also covers method of classification and inferring the pay off of a Structured Product
1. Alternative Assets
a. What is an Alternative Asset Class?
b. Why Alternative Assets are Important
c. Super Asset Class
d. The Beta Continuum
e. Alpha versus Beta
f. Beta and Alpha Drivers
g. The Calculus of Active Management- Information Ratio, Information Co-efficient and Breadth, tstatistic and information ratio, transfer co-efficient.
2. Hedge Funds
a. Introduction to Hedge Funds
b. Types of Hedge funds
c. Structure of a Hedge Fund
d. Investment Strategies of a Hedge Funds
e. Establishing a Hedge Fund Investment Program
f. Due Diligence for Hedge Fund Managers
g. Risk Management Part I: Hedge Fund Return Distributions
h. Risk Management Part II: More Hedge Fund Risks
i. Hedge Fund Benchmarks and Asset Allocation
j. Hedge Fund Incentive Fees and the Free Option
k. Hedge Fund Collapses
3. Commodities and Managed Futures
a. Introduction to Commodities
b. Investing in Commodity Futures
c. Commodity Futures in a Portfolio Context
d. Managed Futures
e. Trend Following and Discretionary Trading Strategies
4. Private Equity
a. Introduction to Venture Capital
b. Introduction to Leveraged Buyouts
c. Debt as Private Equity Part I: Mezzanine Debt
d. Debt as Private Equity Part II: Distressed Debt
e. Trends in Private Equity
f. The Economics of Private Equity
5. Credit Derivatives
a. Introduction to Credit Derivatives
b. Collateralized Debt Obligations
c. Risks and New Developments in CDOs
d. Explain factors impacting the growth (or contraction) in the collateralized debt
• Obligation (CDO) market.
• Compare and contrast the structure of:
• Balance sheet CDOs with arbitrage CDOs.
• Cash funded CDO with synthetic CDOs.
• Cash flow CDO with market value CDOs.
• Funded with unfunded CDOs.
e. Explain how special purpose vehicles work in the CDO market.
f. Describe the structure of a cash funded balance sheet CDO.
g. Calculate the net gain (or loss) of a synthetic balance sheet CDO using a total return swap to the bank sponsoring a credit loan obligation (CLO) trust.
h. Explain why synthetic CDOs using credit default swaps (CDSs) are often called correlation products. Identify key benefits to banks from CLOs.
i. Compare and contrast cash flow arbitrage CDOs to market value arbitrage CDOs.
j. Describe synthetic arbitrage CDOs.
k. Calculate the profits from an arbitrage CDO trust.
l. Describe three phases of most arbitrage CDOs.
6. Commodities
a. Key Concepts in Commodity Market Analysis
b. Role of Commodities in Asset Allocation
c. Methods of Delivering Long Commodity Exposure
d. Methods of Delivering Commodity Alpha
e. Commodity Indices
f. Investment Vehicles and Asset Allocation
7. Structured Products
a. Defining a Structured and Synthetic Product
b. Types of Structured Products
c. Types of Risks in a Structured Products
d. Managing Risk of a structured Product
e. Anatomy of a Structured Product
f. Characteristics of a Structured Product: Capital Guaranteed, Participation Rate, hard and soft protection.
g. Structured Products versus other Investment Strategies.
8. Alternative Investments portfolio management and risk mitigation
Unit-9: Real Estate Valuation And Analysis
Course Objective: The purpose of the courses is to gain an understanding of the economic forces that drive real estate value in the market. Students will learn the concepts, tools, and techniques for evaluating individual real estate assets, based on the application of economic theory and principles of urban economics, for the purpose of real estate valuation. Upon completion of the course, students should have a broad understanding of how market dynamics, constrained by the geographic, physical and legal parameters, determine values of individual assets in the market. (In short, at the end of the course, if someone points to any property and asks, “what is it worth?” or “how much should we pay for it?” you will know how to determine an answer.)
1. Introduction: Concept and meaning of Real Estate, Important Features of Real Estate Investment, Difference between Real Estate with Security Investments, Characteristics which distinguish Real Estate investment from other investments, Advantages, Disadvantages and attraction of Real Estate Investment,
2. Categories of Real Estate: Different categories and forms of real estate investment, Residential House, Other Forms of Real Estate, Features and attraction for investment in agricultural land, farmhouse, urban land., Features of Real Estate Market. Real Estate Industry - Micro and Macro aspects
3. Real Estate Financing: Introduction: equity and debt in real estate investment, Financial structure of real estate investors: debt and equity, Housing Loans, Features of Housing Loans, Types of Home Loans, Mortgage contract features, Mortgage valuation and pricing, Market for mortgage debt, Eligibility for Home Loans, Documentation requirements - pre-approval. Documentation requirements - post-approval/ disbursal stage, Repayment Period, Collateral Securities, Mortgage Math, Interest rate calculation, Fixed and Floating/ Adjustable rate of Interest, Fees and Charges, Tax Benefits and Guidelines for buying Flat.
4 Real Estate Appraisal Profession: Ethics, Certification, Licensing, Accreditation, etc.
5. Real Estate Valuation:
A. Determinates of Real Estate Value, Five decision making factors in prioritizing selection of property for investment, Financial Evaluation of Investment in Real Estate for purpose of Renting,Valuation methods, Real estate indices
B. Compared to price, Present Market Value, Present Value Analysis, The Valuation Process
C. Real Estate Markets and Market Analysis: Types of Markets, Market Analysis, Conducting Market Research, Urban Market Forces and Highest and Best Use a. Market Forces in Cities b. Land Rent of Land Use Patterns c. Land-Use Control, Site Analysis and Improvement Analysis
D. Money Markets and Capital Markets & Interest in Real Property
E. Data Collection and Analysis: Factors that affect property values, Defining Properties and Organization of Market Data, Application of Economic Theory and Principles, Property Law, 5. Physical and Economic Factors
F. Cost Approach to Value: Land Value, Replacement Cost, Depreciation, Cost Manuals, City Properties, Buildings and Improvements, Apartment Complexes,
G. Capitalized Income Approach to Value: Introduction, Budgets, Projections, Performa’s, Commercial Leases, Discounted Cash Flow Analysis, Ratio Approaches, Discount rates and returns, Typical operators, Leasehold and Residuals, Capitalization Rates, Annual versus Perpetuity enterprises, Income Approach: Comparing the Models
H. Sales Comparison Approach
I. Other issues: Reconciliation of Value, Highest and Best Use Analysis: Additional Topics, Site Valuation: Additional Topics, Market Value Versus Investment Value, Debt-Equity Models, Cap Rate Topics: Loading the Cap Rate and Capital Reserves, Partial Interest Valuation
6. Integration of the real estate in the mixed-asset portfolio: Return and risks of real estate, Correlation between the returns on various asset classes, determining the share of real estate in optimal portfolios
7. Innovation in Real Estate Investments: Real Estate Investment Trust (REIT), Features of REIT and its eligibility. The salient features of SEBI’s draft guidelines dictate that. Real Estate Mutual Fund (REMF)
8. Real Estate Valuation and Analysis
8.1 Valuation and indices of real estate
Valuation methods
Real estate indices
8.2 Integration of the real estate in the mixed-asset portfolio
Return and risks of real estate
Correlation between the returns on various asset classes
Determining the share of real estate in optimal portfolios
8.3. Financing of real estate
Introduction: equity and debt in real estate investment
Market for mortgage debt
Financial structure of real estate investors: debt and equity
Mortgage contract features
Mortgage valuation and pricing
Unit-10: International Taxation And Trust Planning
Course Objective: Globalization of economies, signing and review of free trade agreements, increase in the number of cross border transactions, mergers, acquisitions, tax treaties, transfer pricing etc. have added to the complexities of various taxation laws. While appreciating these increasing complexities in the area of International Taxation, we try through this unit to understand these complexities.
What is Intl. Taxation? Why we study International Taxation? Features and Principles, Importance
Main trends and evolution of model conventions: Tax Treaties: General, Need & Purpose of Tax Treaties, Effect of Tax Treaties, Overview of the Tax Treaties, Scope of Treaties i.e., Article 1 & 2, How Treaties enter into force and how they are terminated protocols etc., Section 90,90A & 91 and its implications
Historical Overview, Main Trends and Evolution of Various model conventions: Work prior to the league of Nations, League of nations work, Mexico Model Convention, London Model Convention, OECD Work, United Nations Work, Other Regional Level Work, Conclusion
Principles of International and Comparative taxation:
Interpretation of Treaties including Tax Treaties: Dual Nature of Treaties, Various rules of interpretation, Nature of such Rules: A note of caution, Integrated Approach, Context, Supplementary means of interpretation, Authority of interpret, Discretionary Aids and Recognized Maxims, Principle of contemporaneity, Liberal Construction, Treaty as a whole, Broad Approach, Position summarized, Multilingual treaties, Extrinsic Aids to tax treaty interpretation, Use of the OECD Commentaries, Article 3(2) of OECD model Ambulatory V, Fixed Approach Permanent Establishment Article 5, Business Income including Force of Attraction, Attribution of Profits to a PE, Non – Discrimination, Recovery of taxes on behalf of other states and Mutual agreement procedure and exchange of information, Royalties and Fees for Technical Services and most Favored nation (MFN) related to such payment
Independent Personal Services: Tax implications attaching expatriates, Dependent Personal Services, Incoming & Outgoing, Dual employment, Secondment, Relevancy of visa permits, Taxation of ESOPs, Concept of Residence in Tax Treaties i.e., Article 4, Taxation of Income from Shipping and Air Transport services, Interest / Dividend / Capital Gain, Income from Immovable Properties International Tax Planning for Multinational Enterprises, Tax Incentives for Developing Countries and International Taxation
Double Taxation Avoidance Agreements:
Authority for Advance Ruling, Elimination of Double Taxation including tax sparing, Taxation of Entertainers and Athletes, Other income under tax treaties, Deduction of tax at source u/s. 195 & DTAA, Agent of non Resident Partnerships under the law of Tax Treaties
Triangular Cases, Beneficial ownership under tax Treaties, Vienna Convention on Laws & Treaty
Tax Haven Countries
Cross – Border Mergers & Acquisitions – Tax consideration, International Estate & Trust Transaction, Concept of controlled foreign corporation, Thin Capitalization, Hybrid/Financial Instruments
Transfer pricing:
Introduction to transfer Pricing, Principles of Transfer Pricing, International Transaction, Associated Enterprises, Arm’s Length Price, Computation of Arm’s Length Price, Documentation,
Transfer Pricing: Intangibles and intra-group Finance, Transfer Pricing of Business Restructurings
E C Treaties – Parent Subsidiary Directives – Interest and Royalty Directives, Current controversial issues in transfer pricing
Tax Laws of Asia Pacific countries:
Electronic Commerce and Taxation, Tax Laws of Asia Pacific Countries, Principles and Provisions of International Taxation in the Domestic
Tax laws of United States and EU countries:
Law of the following Countries United States, UK, Japan, Singapore, Australia, Cyprus – Comparative Analysis of Holding Co. Jurisdiction, EU Direct Corporate Taxation, Corporate Taxation- International and EU Aspects, Introduction to European Value Added Tax- Selected Issues, Taxation of Holding Companies in Europe
How to read the tax treaty:
(i) India – U.K. DTAA
(ii) India – UAE Treaty and Protocol
(iii) India – Singapore India – Netherlands Treaty
(iv) India – Mauritius Treaty
| Classroom - Regular | ||||
| When | Duration | Where | Remarks | Price |
| Not Specified | Not Specified | All Venues | Not Specified | Price On Request |
| Price Notes: A. Tuition Fees / Enrolment Fees: 1. The Tuition fees / Enrolment Fees for each Level is Rs.25,000 (Plus Services Tax). Which also Include cost of Study Material. 2. Students who would go for Self Study/ Distance Learning for both the Level needs to pay Rs.10,000 towards student enrollment fees, study material and online support.(Inclusive of Services Tax). Payment to be made in CASH / CHEQUES should be made in favour of 'VANTAGE CORPORATE SERVICES LTD' payable at Mumbai. B. Registration Fee: 1. The Registration fees of Candidates going through: Compulsory Pathway: Candidates registering through Compulsory Pathway (having experience less than three years) needs to pay registration fees of Rs. 11,236 (Rs. 10,000 + 12.36% Service Tax). Experience Pathway: Candidates registering through Experience Pathway (having experience of three years or more) needs to pay registration fees of Rs. 5,618 (Rs.5,000 + 12.36% Service Tax). C. Exam Fees: 1. The Examinations Fee for Level 1 & Level 2 examination is Rs. 2,000 (Rupees Two Thousand Only) each per Examination / Level. 2. Experience Pathway candidate is exempted from Level 1 Examination. Hence need to pay for Level 2 exam only i.e. Rs. 2000 Only. Please note the Demand Draft should be made in favour of 'American Academy of Financial Management India Pvt. Ltd.' payable at New Delhi. | ||||
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Vantage Institute Of Financial Markets
Vantage Corporate Services Ltd., the company established in 1991, is headquartered in Mumbai. The company acted as a Securities Exchange Board of India (S.E.B.I.) registered Merchant Banker and is also registered with the Reserve Bank of India (R.B.I.) as a Non Banking Finance Company (N.B.F.C.). Vantage Corporate Services Ltd. is listed on the BSE Ltd. (Bombay Stock Exchange), Ahemadabad Stock Exchange (A.S.E.). Vantage Corporate Services Ltd. has been partnering with its clients to provide Financial Consultancy and Investment Advisory Services.
Gradually, it diversified into different verticals of Education, & Stock Broking. Vantage has adopted a mature model for sustaining and accelerating growth by managing business opportunities across horizons. The diversified entity is guided by experienced and efficient team of professionals.
Vantage Institute Of Financial Markets (VIFM)
The Vantage Institute of Financial Markets is a division of The Vantage Corporate Services Ltd.
Our commitment towards achietive of imparting the right financial education to the right audience would definitely benefit the indiving the objecvidual investors and the industry as a whole.
Vantage Institute of Financial Markets is an Authorized Education Provider of the
1. Financial Planning Standards Board, India (FPSB),
2. American Academy of Financial management (AAFM),
3. Sikkim Manipal University (SMU)
4. Mahatma Gandhi University (MGU)
Vantage have its training Centers at Lower Church gate, Lower Parel, Borivali, Ghatkopar and Thane Poona in Maharashtra Surat in Gujarat and in Delhi.
Vantage is one of the top education facilitator for all the professional financial courses, which includes Financial Planning, Wealth Management, Technical analysis, Banking & Management since 1991.
