What do you do when you have considerable amounts of surplus funds for investment? Can you handle your investments yourself or do you need professional help?
High and ultra-high net worth individuals need specialized portfolio management services to invest their funds into different avenues which suit their investment preferences. This is where Portfolio Management Services, or PMS in short, comes into the picture. PMS is a professional wealth advisory service which handles the financial portfolio of niche clients and helps them invest as per their investment needs and preferences.
PMS can be of three types which are as follows –
- Discretionary services are when the choice of investment avenues and the timing of investing into such avenues rests completely in the hands of the portfolio managers
- Non-discretionary services are when the portfolio managers advise the clients with investment ideas. The choice of investment avenues and the time to invest rests in the hands of the investor himself. However, investment into the selected avenues is done through portfolio managers
- Under advisory, the portfolio managers only suggest investment ideas to their clients. The selection of investment avenues, timing of investment and investing in the avenues is done completely by investors.
In India, PMS services are primarily discretionary wherein the portfolio manager has complete control over the management and investment of the client’s portfolio.
A minimum investment of Rs.25 lakhs is needed to opt for PMS. This is the main reason why PMS services are often used by the rich and super rich individuals.
If you choose PMS, you would be the owner of actual stocks bought with your money unlike mutual funds wherein you are allotted units of a fund. You have to issue a Power of Attorney to the portfolio manager to invest your money and manage your investments as per his/her expertise.
PMS services fall under the ambit of SEBI’s regulations and the portfolio manager adheres to the rules and guidelines issued by the regulator. Moreover, performance reports are also prepared by portfolio managers and sent to their clients so that the clients can track the performance of their investments.
PMS services are, therefore, specialized and tailor-made services for individuals with a considerable corpus which help them achieve their investment needs with the best strategies.
Disclaimer: Please note that the information & tools provided above is only for education purpose and we are only Distributors to execute the transaction on the instruction of investors.