Portfolio Management Services (PMS)

What are Portfolio Management Services (PMS)?

Portfolio Management Services (PMS) are professional investment management services that aim to help investors achieve their financial goals by constructing and managing customized investment portfolios. PMS are designed for high net-worth individuals (HNIs) who have a minimum investment amount of ₹50 lakhs.

How Does PMS Work?

When you opt for a PMS, a separate bank account, demat account, and trading account are opened in your name. All investments are made directly in your name, not in a pooled fund like mutual funds. Any income, dividends or capital gains from the investments are credited directly to your bank account.The portfolio manager is given a power of attorney to manage your investments on your behalf. They construct a customized portfolio based on your financial goals, risk tolerance, and investment horizon. The portfolio manager actively monitors and rebalances the portfolio as needed to optimize returns.

1. Discretionary PMS: The portfolio manager has full discretion to make investment decisions without consulting the client.
2. Non-Discretionary PMS: The portfolio manager provides investment recommendations but the client makes the final decision. The manager executes the trades as per the client's instructions.
3. Advisory PMS: The portfolio manager only provides investment advice. The client makes all investment decisions and executes the trades themselves.

• Customized portfolio: The portfolio is tailored to your specific financial goals and risk profile.
• Professional management: Your portfolio is managed by qualified and experienced investment professionals.
• Diversification: PMS helps diversify your investments across asset classes, sectors and stocks to manage risk.
• Transparency: You can track your portfolio performance through online access and regular reports.
• Tax efficiency: The portfolio manager optimizes your investments for tax efficiency.
• Flexibility: You can modify your investment strategy as your needs change over time.

In summary, PMS provides a convenient way for HNIs to access professional investment management services to grow their wealth over the long-term. The key is to select a reputable PMS provider with a proven track record of delivering consistent risk-adjusted returns.