Portfolio Management Services (PMS): A Comprehensive Guide
What is PMS?
Portfolio Management Services (PMS) are personalized investment solutions where professional portfolio managers manage an individual’s or institution’s investments. PMS focuses on creating a customized portfolio to meet the specific financial goals, risk tolerance, and investment horizon of clients. It allows for more control, personalized strategies, and flexibility compared to mutual funds, making it ideal for high-net-worth individuals (HNIs) or those with significant capital to invest.
Types of Portfolio Management Services
- Discretionary PMS:
- The portfolio manager has full discretion to make investment decisions on behalf of the client.
- Allows the manager to act quickly and adjust the portfolio as per market conditions.
- Ideal for clients who prefer a hands-off approach and trust the expertise of the portfolio manager.
- Non-Discretionary PMS:
- The portfolio manager provides recommendations, but the client has the final say on investment decisions.
- Gives clients more control and involvement in the investment process.
- Suitable for clients who want expert guidance but still wish to make the final decisions.
- Advisory PMS:
- Involves providing professional advice and suggestions based on the client’s financial goals.
- Clients have the discretion to accept or reject the advice provided.
- Best for clients who seek ongoing guidance but want to manage their own portfolio actively.
Benefits of PMS
- Customized investment strategies based on individual goals.
- Active management of the portfolio with regular monitoring.
- Flexibility to invest in a variety of asset classes, such as equities, bonds, real estate, etc.
- Higher transparency and greater control over the portfolio.