Not many investors are familiar with the huge potential of PMS services. This isn’t a coincidence that many such investors then hop onto the internet and run searches for – How can an investor invest in portfolio management services?
However, Portfolio Management Service is one financial product that often fails to grab investor’s attention, or some of the investors who are already well versed enough with the investment world tend to do so because of the huge initial investment capital.
Before we go any further, we should understand the topic of PMS.
What is Portfolio Management
Portfolio Management is a type of financial service where investors take the assistance of professionals in the management of their portfolio.
Investors, usually HNIs opt for this service to invest more strategically to maximize the profit potential on their investments. Investors lacking an understanding of the time that goes into the management of a portfolio can opt for availing PMS service.
Discretionary PMS Service – In Discretionary PMS Service, all the investments are made by the portfolio manager as per their discretion. The portfolio manager has complete autonomy over the portfolio and makes the investments without the client’s permission.
The client simply has the account in their name and all the investment-related decisions are made by the portfolio manager.
The investor can get their portfolios customized by the portfolio manager to suit their investment objectives.
2. Non-Discretionary PMS Service – In Non-Discretionary PMS Service, a portfolio manager cannot transact without the investor’s permission. The investor holds complete autonomy over the portfolio.
The portfolio manager advises the client where to invest and the right time to make the investments. However, the client is under no obligation to act on the recommendations made by the portfolio manager.
The investments however would be made by the portfolio manager only.
3. Advisory PMS Service – As the name suggests Advisory PMS service is limited to providing investment related recommendations. The client manages their portfolio on their own but simply seeks investment advice.
In PMS advisory service, the client makes investments on their own and just takes recommendations from the portfolio manager.
Now, moving onto the query at hand – How can an investor invest in portfolio management services?