Mutual Investment is Required in “It’s Their Job, But It’s Your Career”

Robert Segall, author of the new book It’s Their Job But It’s Your Career: The Underground Guide to Career Success, is on a mission.

A veteran human resources executive and founder of human resources firm Career Underground, Segall sent me a review copy and explained his inspiration for the career guide for professionals. He noted that the contract between employee and employer is broken. That viewpoint on the implicit employment contract resounds throughout Segall’s prescription for fixing today’s career ailments. Your employer has a responsibility to you, but so do you for achieving your career.

Being good at your job does not mean you are good at your career. In fact, early on in the book, Segall lists ten reasons why we don’t talk about career, as well as an example of how our collective devaluation of career direction can lead to organizational direction.

He offers an account of human resources using lower salaries because people are seen as a cost. He cautions:

“When we become more value to ourselves, we become more valuable to our employers as well. It’s a mistake to think that we are simply more expensive. Instead, we must remember that our value comes from our effect on the workplace and not just the work product….We have failed to recognize this perspective of career as a mutual investment…..”

I tried to imagine how this book best serves its intended audience. The solutions describe enterprise-level environments in general, but they can fit smaller firms more susceptible to keeping employees motivated when advancement opportunities vary wildly. The ideas can be a starting point to how to develop employees to imagine their careers, even if it may mean moving forward from a firm.

That kind of move in the right context can broaden a network for a smaller firm; a win-win aspect. That perspective permeates the ideas Segall advocates. The end result is a bright tone in between the talks about controlling your career, such as this passage:

“We’re in a world filled with people who have no interest in conflict with one another and would rather agree on nearly everything of substance and matter. We seek to be respected, to be able to come together (or apart) as we please. We want our future world to live as brightly as the golden ages of the past…. This globally integrated world creates opportunities for each of us to connect and do business, if only we have the creativity and initiative to meet the opportunity.”

That win-win perspective enhances any encouragement in taking charge of your networking and skill development:

“…if people around us are generally good and want to help us if they can, then it is our responsibility to engage with them as part of our career development.”

The cost of lost engagement can be high. Segall notes what can result from a dysfunctional process in an organization, such as the cost of a poor recruitment program:

“The dysfunctional employer will have to explain to its remaining workforce why it can’t keep its best talent in its ranks, or if it buries its head in the sand and ignores the absence of its key personnel, the staff will be well aware of the corporate dysfunction and the exit trend will continue.”

I can imagine someone giving this book to an employee to show some ideas to what to expect from career management in general. Or it can be given as an inspiration on what a good workplace should promise to its workforce.

Budding entrepreneurs may also find inspiration in the text. As a matter of fact, I recall a conversation with an interested professional that he felt uncomfortable charging someone for his services – comments from Segall can positively inspire entrepreneurs to get past such psychological hang ups:

“It doesn’t matter what you do for a living. You have skills to offer, and they are part of a solution. The solution you choose to work on shows where your passions lie.”

Entrepreneurs can combine this thought with those from Adrienne Graham’s excellent No You Can’t Pick My Brain.

Regardless of the reason, you should read this book to learn why win-win thinking can enhance and bring value to your teams.


Mutual fund SIPs can be for long-term and short-term goals



I am 37 and earn Rs. 12 lakh per annum. I have a pure-term insurance of Rs. 50 lakh from LIC and health insurance ofRs. 10 lakh from National Insurance. I also have a home loan of Rs. 15 lakh and car loan of Rs. 2.4 lakh. Every year I invest Rs. 75,000 in Edelweiss Tokio’s (top 200 and large cap) unit-linked investment plan (Ulip). I and my wife invest Rs. 1.5 lakh each in Public Provident Fund (PPF). I have invested Rs. 26 lakh in various post-office savings schemes including National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and monthly income scheme (MIS) . I also have a recurring deposit (RD) of Rs. 5,000 per month in a post office account. Kindly suggest, what else I can do for my 11-month-old son’s future.

—Satyajit Dutta

Any portfolio construction has two main components—insurance and investment. The main purpose of insurance is to ensure that the investments run smoothly, i.e., in case of death the insured person’s family can maintain financial well-being as well as protect the investments for future financial goals.

Ideally, the insurance cover should be enough to provide for your financial goals post loans and liabilities. As a thumb rule, 6-8 times your annual income is a good goal for the sum assured. In your case, you have term insurance. But considering the net of loans, the sum assured is not adequate. You can consider increasing the term insurance accordingly. You have adequate health insurance cover, but make sure that your child is covered in the plan. The insurances need to be reviewed periodically to stay in line with goals.

In investments, it appears you that you are a conservative investor. Your portfolio is mostly debt, comprising PPF and post office investments like KVP, NSC, MIS and RD. The equity flavour is only from the one Ulip. The key to any investments is to beat inflation over the long term.

This becomes even more important for young investors who have many milestones to achieve, and outperforming inflation becomes critical. You should take a risk profile test to understand your risk appetite, and based on that increase your equity exposure. While that may expose you to more risk, it also delivers superior inflation-adjusted returns if equities are held for a long time.

You can classify your financial goals as short term and long term. Short-term goals can be assigned to debt securities such as bank RD, NSC and KVP; which are due for maturity.

You can also consider monthly investments in mutual funds via a systematic investment plan (SIP). This can be done for short-term as well as long-term goals.

For short-term needs consider ultra short-term and short-term debt funds. For long-term needs like child education and retirement, you can create a combination of large-cap, multi-cap, mid-cap and even hybrid equity funds. The performance of these funds needs to be monitored regularly.


CAS includes full list of mutual fund holdings and their current value

iStock Photo

iStock Photo

I am 28, married, and with no kids. I started investing in systematic investment plans (SIPs) in November 2014 as follows: Rs.2,500 in ICICI Pru Focused Bluechip fund,Rs.3,500 in UTI Equity, Rs.2,000 in Franklin Flexi Cap andRs.2,000 in HDFC Mid Cap Opportunities. I also made one-time investments in the following funds during market dips (2015-16): Axis Equity-growth (Rs.10,000), Axis Long-term Equity for tax saving (Rs.70,000), and ICICI Prudential Value Discovery (Rs.10,000).

I also invest in Public Provident Fund (PPF) and PF. I also have a term plan. I wish to increase my SIPs to Rs.40,000. My wife also intends to start investing an additionalRs.3,000 per month. I have no specific goals but I am looking at 10-12 years’ horizon for the MF investments.

Am I on the right path? I can bear medium risk while my wife prefers medium to low risk.

—Tapas Ruparelia

You’re doing well. A term insurance to cover life risk and regular SIPs to take care of future are the foundations for a healthy financial life. Also, you are continuing the discipline of investing in PF options, and you have chosen good funds for your mutual fund portfolio. Your current SIP portfolio consists of a large-cap fund, two diversified funds, and a mid-cap fund in a ratio of 25%, 55%, and 20%, respectively. This is a good combination. The only change that I would suggest is to add an additional mid-cap fund. You could go for Mirae Asset Emerging Bluechip fund to split your mid-cap allocation between two funds (10% each). So, you can take the total of Rs.50,000 in your SIP portfolio and spread it in these five funds in the existing proportion.

For your wife’s portfolio, you could add a balanced fund such as HDFC Balanced fund to give moderate risk addition.

What is a consolidated account statement (CAS)?

—Vinay Jain

A CAS is a statement of transactions and investments across mutual funds and depository accounts that an investor might have. Starting March 2015, the market regulator, Securities and Exchange Board of India (Sebi), instructed depository companies to take the responsibility of consolidating all the investment information of an investor (consolidated by Permanent Account Number or PAN), and sending a monthly statement to the investor. If the investor has a registered email address, this statement would be sent electronically. If not, it could be delivered to the physical address.

CAS would contain all financial transactions (buy, sell, switch) made in mutual fund folios or equity account(s) maintained by the investor. It would also include the full list of holdings (even if no transaction was conducted during the period) and their current value. Starting October 2016, Sebi has also mandated that, for mutual fund folios, CAS should carry information about commission (if any) paid to an adviser or distributor.


Edelweiss to buy JPMorgan’s mutual fund business in India

JPMorgan AMC is the seventh foreign company to sell off its mutual fund business in India. Photo: AFP

JPMorgan AMC is the seventh foreign company to sell off its mutual fund business in India. Photo: AFP

Mumbai: Edelweiss Asset Management Ltd, a unit of Edelweiss Financial Services Ltd, said on Tuesday that it has agreed to buy the mutual fund (MF) business of JPMorgan Asset Management India Pvt. Ltd for an undisclosed sum.

A person directly familiar with the development said on condition of anonymity that the transaction is an all-cash deal valued at 1.5%-2% of JPMorgan Asset’s Rs.7,501-crore asset size.

That works out to a price of Rs.112-150 crore.

JPMorgan Asset is almost five times as large in terms of assets as Edelweiss Asset. For the quarter ended 31 December, Edelweiss managed average assets worthRs.1,632.36 crore.

In a similar deal last year, DHFL Pramerica Asset Managers Pvt. Ltd bought out Deutsche Asset Management (India) Pvt. Ltd that managed 10 times more assets than Pramerica then.

“We have built a substantial onshore funds business in India over the past decade. As a result of a global strategic review and after careful consideration of what is best for our clients and employees, we have decided to find an acquirer for this business,” said Michael Falcon, chief executive officer of Asia Pacific, global investment management, at JPMorgan Asset Management, in a statement.

“We believe that Edelweiss is a suitable acquirer for this business, and this will be a positive development for our clients and our employees,” Falcon added.

On 16 March, Mint reported that Reliance Capital Asset Management Ltd and at least two other large and two mid-sized asset management companies (AMCs) were eyeing the India assets of JPMorgan AMC.

On 4 March, The Economic Times reported that Tata Asset Management Ltd was in talks to buy out the assets of JPMorgan’s domestic mutual fund business.

“Edelweiss has shown a clear commitment to grow its asset management business in India, which is in line with the aspirations JPMorgan AMC employees have. The deal will enable it to sell our products and use our channels and on the other hand it will allow us to sell its schemes and utilize its channels, which is predominantly through Independent Financial Advisers. So, there is a significant synergy in the deal,” said Nandkumar Surti, managing director and CEO, JPMorgan Asset.

Speculation of a possible sale by JPMorgan Asset strengthened after the US-based fund house faced a crisis in two of its fixed income schemes in India last year.

In August 2015, the fund had to restrict redemptions from the two schemes due to their exposure to debt securities of troubled Amtek Auto Ltd, which was downgraded by rating agencies.

JPMorgan subsequently split those holdings into a separate unit and eventually sold off the Amtek bonds to repay investors.

According to Kaustubh Belapurkar, director-fund research, Morningstar India Pvt Ltd., it is good deal for Edelweiss.

“JPMorgan AMC has built up a decent bouquet of MF schemes over the past few years, and some of its schemes are really performing and large. Edelweiss has been showing keenness to grow its asset management business and this deal gives Edelweiss a ready MF portfolio. This also gives Edelweiss an expert fund management team, which is really better than many other teams in the industry,” Belapurkar said. “In my opinion, the withdrawal of investors from JPMorgan AMC’s fixed income schemes in August-September due to the Amtek bond exposure episode was a trigger point for JPMorgan AMC to sell off in India. Otherwise, since foreign players are mostly deep-pocketed, it is not really difficult for them to compete and do business in India if they are able to build a strong franchise or a performing asset-base here.”

In the mutual fund industry, acquisitions are valued on the basis of the asset mix of a fund house, network strength, long-term earning prospects and profitability of the schemes sold. Typically, the higher the amount of equity assets under management over the long term, the greater is the valuation.

Dhirendra Kumar, chief executive of Value Research, a Delhi-based MF analytics firm, said in the 16 March Mintreport, “If one segregates the equity and fixed income assets of JPMorgan AMC and analyses their earnings for a three-year period, the valuation of a fund house like this can be a minimum of 2-2.5% of its assets.”

JPMorgan AMC does have a few top-rated schemes, according to Value Research.

For instance, JPMorgan India Mid and Small Cap Fund, with assets worth Rs.539 crore, is a four-star rated equity scheme in terms of its performance over a one-year period, according to Value Research.

Market volatility, an increase in minimum net worth requirements to Rs.50 crore from Rs.10 crore and a rule requiring sponsors to invest their own money in all their open-ended schemes have put pressure on AMCs in India’sRs.12.62 trillion mutual fund industry in recent years.

JPMorgan is the seventh foreign company to sell its mutual fund business in India.

While Goldman Sachs SA and Deutsche AMC exited last year, ING Investment Management (India) Pvt. Ltd sold its MF business to Birla Sun Life Asset Management Co. Ltd in 2014. In the same year, Kotak Mahindra Asset Management Co. Ltd purchased the assets of PineBridge Investments Asset Management.

Earlier, Morgan Stanley Investment Management Co. Ltd had its schemes acquired by HDFC Asset Management Co. Ltd.