An introduction to Portfolio Management Services

Investment lesson

Meta Description: Portfolio Management Services (PMS) is a professional product designed specifically for high-net-worth individuals. Through PMS, individuals can take advantage of customised and flexible portfolios, risk diversification, and liquidity.

Many times, investors who want a direct equity portfolio to multiply and generate wealth in the long term may not have the time or expertise to manage a stock portfolio. Turning to a professional to manage your money can be a good solution.

There are numerous brokerages that are registered with the Securities and Exchange Board of India (SEBI) that provide high-net-worth individuals with professional portfolio management services. Portfolio management services can help you devise an investment strategy based on your financial goals, risk appetite, and investment horizon. A professional handle your investment portfolio and guides you to invest your money to achieve optimal returns.

As per SEBI guidelines, PMS can be offered for a minimum portfolio value of Rs. 50 lakh.

Types of Portfolio Management Services
Broadly, there are three different kinds of portfolio management services available in the market.

  1. Discretionary Portfolio Management
    In a discretionary PMS, the portfolio manager handles the decision-making part of your investment plans for you. Based on your requirements, the portfolio manager will develop an investment strategy and execute it. You must be willing to trust your portfolio manager to do his/her job.
  2. Non-Discretionary Portfolio Management
    When you opt for a non-discretionary PMS, the portfolio manager suggests an investment plan based on your requirements. The final decision on whether to go ahead with the plan or not is up to you. In this portfolio management services style, you will have an active say in managing your portfolio. The portfolio manager will execute investment plans based on your final word.
  3. Advisory Portfolio Management
    As the name suggests, in this PMS facility, the portfolio manager simply advises you about the investments that would best suit your portfolio. The final decision to invest, as well as the investment execution, is up to you. Depending on your investment goals and the amount of time you devote to investing, you can choose among the three types of PMS facilities. No matter which option you choose, you will be able to monitor your investments regularly. Your portfolio manager will give you updates about your portfolio. You should also be able to access these online on your portfolio management services’ website.

    If you don’t have knowledge about the equity market but want to invest in a diversified stock portfolio for wealth creation, you can consider availing of portfolio management services. Geojit offers professional portfolio management services that can help you devise the portfolio of your dreams.
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