Portfolio management service (PMS) is a type of professional service offered by portfolio
managers to their client to help them in managing their money in less time. Portfolio
managers manage the stocks, bonds, and mutual funds of clients considering their
personal investment goals and risk preferences. In addition to money, the portfolio
managers manage the portfolio of stocks, bonds, and mutual funds.
Benefits of Portfolio Management Services (PMS)
•Personalized Advice: Investment advice and strategies from expert Fund Managers
•Professional Management: Money management services that work for client
•Continuous Monitoring: Information about client’s investment decisions
•Hassle Free Operation: High standards of service and complete portfolio transparency
Benefits of Choosing Portfolio Management Services (PMS) Instead of Mutual Funds:
While selecting Portfolio management service (PMS) over mutual funds services it
is found that portfolio managers offer some very services which are better than the
standardized product services offered by mutual funds managers. Such as:
•Asset Allocation: Asset allocation plan is tailor made and is designed after the detailed
analysis of client's investment goals, saving pattern, and risk taking capacity.
•Timing: Portfolio manager analyzes the market and provides his expert advice to the
client regarding the amount of cash he should take out at the time of big risk in stock
•Flexibility: Portfolio managers do not need to follow any rigid rules of investing a
particular amount of money in a particular mode of investment, although they have to
follow rules set up by SEBI.
Portfolio Management Payment Criteria:
There are types of payment criteria offered by portfolio managers to their client, such as:
•Fixed-linked management fee.
•Performance-linked management fee.
In fixed-link management fee the client usually pays between 1-2.5% of the portfolio
In performance-linked management fee the manager gets around 10-20% of the total
profit earned by the client.