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Portfolio Management Services in India

Management services for your portfolio are a popular investment option for high-net-worth individuals (HNIs) in India. PMS is a professional investment service where a portfolio manager manages an investor’s portfolio based on financial goals, risk appetite, and investment horizon. With several firms offering portfolio management services (PMS) in India, it can take time to choose the best one.

PMS is a personalized investment service where a portfolio manager manages an investor’s portfolio based on their financial goals, risk appetite, and investment horizon. The portfolio manager invests in a diversified range of securities, like stocks, bonds, mutual funds, etc., to optimize returns for the investor.

portfolio management services india

Types of portfolio management services 

On the basis of provider of the services PMS can be classified as:

  1. PMS by asset management companies
  2. PMS by brokerage houses
  3. Boutique (independent) PMS houses

They can further be classified on the basis of product class as:

  1. Equity based PMS
  2. Fixed Income based PMS
  3. Commodity PMS
  4. Mutual Fund PMS
  5. Multi Asset based PMS

Portfolio managers may classify their clients on the basis of their net-worth. Another way which also finds mention in the regulation also is on the basis of the services provided by the portfolio managers. The following are the types of portfolio management services: 

Discretionary services

As per SEBI’s portfolio managers regulation “discretionary portfolio manager” means a portfolio manager who under a contract relating to portfolio management, exercises or may exercise, any degree of discretion as to the investment of funds or management of the portfolio of securities of the client, as the case may be. In other words, discretionary portfolio manager individually and independently manages the funds of each investor as per the contract. This could be based on an existing investment approach or strategy which the portfolio manager is offering or can be customized based on client’s requirement. 

 Non-discretionary services

Non-discretionary portfolio manager manages the funds in accordance with the directions of the client. The portfolio manager does not exercise his/her discretion for the buy or sell decisions. He/she has to consult the client for every transaction. Decisions like what to buy/sell? And when to buy/sell? Rest with the Investor. The execution of trade is done by the portfolio manager. So, in this case the Portfolio manager provides investment management services with the consent of the client. 

Advisory services

In advisory role, the portfolio manager suggests the investment ideas or provides non-binding investment advice. The investor take the decisions. The investors also executes the transactions. These kind of services are typically used for institutional clients, who manage portfolios on their own, but typically hire country experts in each country.

Here are Important Factors to consider while selecting PMS Services.

The reputation of the PMS Provider

When choosing portfolio management services in India, the reputation of the provider is a crucial factor to consider when choosing the best management services. Investors can research the PMS provider’s track record and assess their credibility. Investors can check the PMS provider’s past performance, customer reviews, and ratings to determine their reputation. Investors can also research the PMS provider’s experience in the industry and their team’s expertise in managing portfolios.

Investment Philosophy

Investors should consider the investment philosophy of the PMS provider while choosing one. The investment philosophy should align with the investor’s financial goals and risk appetite. Investors should understand the PMS provider’s approach to investing, including their investment strategies and research methodology. Investors should also assess the PMS provider’s investment philosophy to ensure it aligns with their investment goals and risk appetite.

Customization

Customization is critical when choosing a management service. The PMS provider should offer personalized investment strategies based on the investor’s financial goals and risk appetite. Investors should ensure that the PMS provider offers a diversified range of securities, including stocks, bonds, mutual funds, and alternative investments. Investors should also assess the PMS provider’s ability to tailor the investment strategy based on changing market conditions and the investor’s evolving financial goals.

Performance

Performance is a critical element when choosing a management service. Investors should check the PMS provider’s track record and performance against the benchmark. Investors should assess the PMS provider’s performance over the long term and in different market conditions. Investors should also assess the PMS provider’s ability to manage risk while optimizing returns.

Fee Structure

Investors should understand the PMS provider’s fee structure, including management and performance-based fees. Investors should assess the PMS provider’s fee structure to ensure it aligns with their investment goals and risk appetite. Investors should also assess the PMS provider’s ability to provide value for money based on their fee structure.

Transparency

Investors should ensure that the PMS provider is transparent about their investment process, fees, and portfolio performance. Investors should assess the PMS provider’s ability to provide regular updates on portfolio performance and changes in investment strategy. Investors should also assess the PMS provider’s ability to provide clear and concise reports on portfolio performance and investment strategy.

Conclusion

Choosing the best portfolio management in India requires careful research and analysis. Investors should consider several factors, including the PMS provider’s reputation, investment philosophy, customization, performance, fee structure, and transparency. Investors should also consider their financial goals and risk appetite while choosing a management service. Choosing a PMS provider that aligns with the investor’s financial goals and risk appetite and offers personalized investment strategies is essential. With the right management services, investors can optimize their returns while minimizing risk.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money.