A STUDY ON WEALTH CREATION OF AN INDIVIDUAL ACCORDING TO THEIR RISK APPETITE AT KOTAK MAHINDRA BANK

Abstract

Wealth creation is the systematic process by which individuals grow their net worth over time through disciplined saving, strategic investment across diversified asset classes, and effective risk management tailored to their unique financial capacity and psychological tolerance for loss. Individual risk appetite—the degree of variability in investment returns an investor is willing to accept in pursuit of higher wealth accumulation—serves as the foundational parameter for constructing investment portfolios that balance growth aspirations with loss tolerance constraints. Kotak Mahindra Bank's wealth management division, operating through Kotak Private Banking and Kotak Securities, provides riskprofiled investment advisory and portfolio management services to retail, high-networth individual (HNI), and ultra-high-networth individual (UHNI) segments, offering asset allocation frameworks aligned with conservative, moderate, and aggressive risk profiles. This study examines the relationship between individual risk appetite and wealth creation outcomes at Kotak Mahindra Bank, analysing risk profiling methodology, asset allocation frameworks across risk categories, investment product selection, portfolio performance outcomes, and financial planning effectiveness. Primary data was collected through structured questionnaires administered to 110 respondents comprising Kotak Bank wealth advisors, relationship managers, and clients across different risk profile categories. Secondary data was sourced from Kotak Mahindra Bank annual reports (2021– 2024), SEBI investor education publications, AMFI industry data, and academic literature on risk tolerance and wealth management. Findings indicate that aggressive-risk-profile investors at Kotak achieve 5-year annualised portfolio returns of 14.8–18.4% compared to 7.2–8.6% for conservative-profile investors, while goal-based financial planning integration improves 10-year wealth accumulation by an estimated 34% compared to product-centric advisory approaches. Recommendations address risk profiling accuracy enhancement, goal-based planning adoption, digital wealth management capability, and financial literacy investment for improving individual wealth creation outcomes.