What are the Benefits of Portfolio Management Services?

In today’s complex and dynamic financial market, investors are increasingly looking for strategic solutions to manage and grow their wealth. One such solution gaining traction among high-net-worth individuals is Portfolio Management Services (PMS) — a personalised investment approach tailored to individual financial goals. By leveraging professional expertise, PMS enables investors to maximise returns while effectively managing risk.

Read this blog to explore the different types and benefits of PMS.

What are Portfolio Management Services?

Portfolio Management Services provides customised investment solutions to investors to help them achieve their financial goals. These services include building diversified investment portfolios in different asset classes. Experienced portfolio managers and stock market experts manage the equity portfolio of investors with the help of a research team.

While maximising your returns, PMS can minimise your risks. It enables you to make informed investment decisions using extensive market research. Firms offering PMS must get registered under the Securities and Exchange Board of India (SEBI) to reduce risks and ensure transparency.

Different Types of Portfolio Management Services

Each type of PMS functions differently. Before jumping into the advantages of PMS, let us explore the different types of PMS:

• Active Portfolio Management

  Maximising returns is the main goal of this type of PMS. In this method, the portfolio managers lower the risk of your investment. It diversifies your investments across different asset classes and industries.

• Passive Portfolio Management

  Passive portfolio management follows the performance of the market average and benchmark index. This ensures lower risk, lower cost, and even lower involvement of portfolio managers.

• Discretionary Portfolio Management

  In this type of PMS, portfolio managers have the full discretion to invest according to their judgment. They execute trades that are aligned with the financial plans and goals of the investors.

• Non-Discretionary Portfolio Management

  In non-discretionary PMS, portfolio managers must wait for the approval of investors to make transactions. It is mainly a consultative approach, where portfolio managers provide investment advice.

What are the Benefits of Portfolio Management Services?

Providing higher returns to individuals is not the only reason investors choose PMS. Below are some of the common benefits of using a PMS:

• Asset Diversification

  Diversification of assets is one of the crucial PMS advantages. These services offer a diverse range of investment options, including commodities, real estate investment trusts, and debt securities. PMS also provides fundamental and technical analyses and determines entry and exit points.

• Portfolio Customisation

  Portfolio Management Services also offers a customisation feature for your portfolio. You can choose an asset type that aligns with your risk appetite. As per your liquidity requirement and investment objective, portfolio managers customise your portfolio. Non-discretionary PMS will ask clients and get their approval to make investments.

• Regulatory Compliance

  Regulations closely monitor PMS and fund managers, as portfolio managers have to submit their holdings, transaction statements, and price details to the regulatory authorities. Portfolio managers must maintain a minimum net worth of INR 5 crore, certified by chartered accountants.

• Transparent Fee Structure

  Portfolio Management Services ensure a transparent fee structure and allow investors to choose between performance-based and fixed fees. Investors can also communicate with the portfolio managers and receive regular feedback on their portfolios.

• Real-Time Access

  Most PMS providers have online platforms that allow investors to get access to their portfolio values, expenses, and holdings. You can also access research reports to understand the rationale for their investment.

• Portfolio Rebalancing

  With an active investment strategy, PMS adjust portfolios according to market conditions. PMS services not only focus on the short- and long-term gains but also prioritise the quality of the portfolio.

Final Thoughts

Portfolio Management Services diversifies investment portfolios in a variety of asset classes. It helps investors maximise returns and minimise risks. Some of the benefits of PMS are asset diversification, providing real-time access, portfolio customisation, and portfolio rebalancing.

Do you want a Portfolio Management Services provider that uses cutting-edge technology? Download the PL Capital Group – Prabhudas Lilladher application to avail PMS. PL Capital comes with a differentiated approach to investing with Quant methodology and an experienced investment committee.

Frequently Asked Questions

1. How does PMS assist in portfolio diversification?

Portfolio Management Services builds and manages diversified investment portfolios in various asset classes. Portfolio managers optimise and oversee the investment on behalf of their clients.

2. How do PMS manage risks?

PMS manage risks by prioritising diversification, regular monitoring of the portfolio, leveraging risk management tools, and hiring experienced portfolio managers.

3. How does PMS save time for investors?

Portfolio Management Services save valuable time for investors since they research different securities, execute trades, monitor portfolios, and complete other tasks on behalf of investors.