FAQs

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities. It is managed by a professional money manager that is typically tailored to meet specific investment objectives.

An investor in PMS owns individual securities unlike a mutual fund investor, who owns units of the entire fund. Additionally, the freedom and flexibility to tailor the portfolio as per personal preferences and financial goals remains. Although our managers oversee hundreds of portfolios, each account is unique and customized to suit the needs of a particular client.

Investment Management Solutions in PMS, can be provided in the following ways:

  • Discretionary
  • Non Discretionary
  • Advisory

Discretionary:

Under these services, the choice as well as the timing of the investment decisions rest solely with the Portfolio Manager.

Non Discretionary:

Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timing of the investment decisions rest solely with the investor. However, the execution of trade is done by the portfolio manager.

Advisory:

Under these services, the portfolio manager only suggests the investment ideas.
The choice as well as the execution of the investment decisions rest solely with the investor.

Note: In India majority of PMS providers offer Discretionary Services.

PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services. Currently in India, it is offered by specialized PMS players, asset management companies (AMCs) and brokerage houses.

The investment solutions provided by PMS cater to a niche segment of clients. They can be individuals, family offices or institutional entities with a high net worth.

The offerings are usually ideal for investors who:

  • Want to invest in asset classes like equity, fixed income, structured products, etc.
  • Desire personalized investment solutions
  • Aim for long-term wealth creation
  • Appreciate a high level of service
  • Understand risks associated with investing in PMS

The following investors are eligible to invest through PMS:

  • Resident Individuals
  • Hindu Undivided Families (HUF)
  • Body corporate (Private/Public)
  • Trust (Registered)
  • Non Resident Indian (NRI)*
  • Partnership Firms or any other eligible investor

* Subject to RBI approval

Apart from cash, you can also hand over an existing portfolio of stocks, bonds or mutual funds to a PMS provider who will revamp the portfolio to suit your profile. However, the Portfolio Manager may at his or her sole discretion sell the existing securities in favor of fresh investments.

The portfolio manager is a trustee acting in a fiduciary capacity on behalf of the investor. Therefore, the tax liability for a PMS investor would be the same as that of a direct investor. However, the investor should consult a tax advisor for the same. Audited statement of accounts provided by the portfolio manager would help the investor in assessing his/her tax liabilities. This is made available, ideally at the end of the financial year.

In PMS, you can specify if you do not want exposure to a particular sector due to direct overexposure through your business, investments or professional association within the sector. For e.g. Mr. Bill Gates may not want his portfolio to have any weightage in the technology sector as he is already overexposed to the sector through his holding in Microsoft.

In the case where a client is the Director of a listed company, then we would request him to make these disclosures to us at the time of account opening. A request letter is also sought from him that clearly states the securities that should not be dealt in. These details are updated in the system, which then automatically refrains from dealing in the specified securities.

  • Professional Management- The service provides professional management of portfolios with the objective of aiming to deliver consistent long-term performance while controlling risk
  • Continuous Monitoring - The PMS provider ensures that portfolios are constantly monitored and periodic changes are made to optimize the results
  • Risk Control - A research team is responsible for establishing your investment strategy and providing the portfolio manager real time information to support it.
  • Hassle Free Operation - All the administrative aspects of your portfolio are taken care of. You are also updated through periodic reporting on the overall status of the portfolio and its performance
  • Flexibility - The portfolio manager has a fair amount of flexibility in terms of holding cash (can go up to 100% also depending on the market conditions). He can create a reasonable concentration in your portfolio by investing in other lucrative opportunities
  • Transparency - PMS provides you comprehensive updates through regular newsletters. Also, through account statements you will know about individual securities held in your portfolio. Web access is also given to access all the pertinent information. A monthly portfolio commentary by the manager provides an overview of the markets as well
  • Customised Advice - PMS gives select clients the benefit of tailor-made investment advice designed to achieve their financial objectives. It can be structured to automatically exclude investments owned in another account or a negative list of investments
  • Personalised Approach - In PMS, a greater personalized access to the professional money managers is given. This interaction can take various forms such as in-person meetings, conference calls, written commentary, etc.

When you have entrusted your money to PMS, you may expect:

  • A relationship manager/ financial advisor with whom you can interact
  • To be updated on any major changes in asset allocation or in the investment strategy relating to your portfolio
  • All administrative matters, including operating a bank account and dealing with settlement and depository transactions, will be handled by the PMS

Most Portfolio Managers allow a choice between a fixed and a performance-linked management fee or a combination. In addition, actual expenses like custodian expenses, audit fee, brokerage on transactions, etc. are charged on actuals. For charging performance-based fee, the concept of high watermark is typically applicable.

Yes. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. You are requested to consult your financial/ tax advisors before taking any decisions.

The differentiators between Mutual Funds and PMS are:

FAQs

Portfolio Management Services (PMS) is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities. It is managed by a professional money manager that is typically tailored to meet specific investment objectives.

An investor in PMS owns individual securities unlike a mutual fund investor, who owns units of the entire fund. Additionally, the freedom and flexibility to tailor the portfolio as per personal preferences and financial goals remains. Although our managers oversee hundreds of portfolios, each account is unique and customized to suit the needs of a particular client.

Investment Management Solutions in PMS, can be provided in the following ways:

  • Discretionary
  • Non Discretionary
  • Advisory

Discretionary:

Under these services, the choice as well as the timing of the investment decisions rest solely with the Portfolio Manager.

Non Discretionary:

Under these services, the portfolio manager only suggests the investment ideas. The choice as well as the timing of the investment decisions rest solely with the investor. However, the execution of trade is done by the portfolio manager.

Advisory:

Under these services, the portfolio manager only suggests the investment ideas.
The choice as well as the execution of the investment decisions rest solely with the investor.

Note: In India majority of PMS providers offer Discretionary Services.

PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services. Currently in India, it is offered by specialized PMS players, asset management companies (AMCs) and brokerage houses.

The investment solutions provided by PMS cater to a niche segment of clients. They can be individuals, family offices or institutional entities with a high net worth.

The offerings are usually ideal for investors who:

  • Want to invest in asset classes like equity, fixed income, structured products, etc.
  • Desire personalized investment solutions
  • Aim for long-term wealth creation
  • Appreciate a high level of service
  • Understand risks associated with investing in PMS

The following investors are eligible to invest through PMS:

  • Resident Individuals
  • Hindu Undivided Families (HUF)
  • Body corporate (Private/Public)
  • Trust (Registered)
  • Non Resident Indian (NRI)*
  • Partnership Firms or any other eligible investor

* Subject to RBI approval

Apart from cash, you can also hand over an existing portfolio of stocks, bonds or mutual funds to a PMS provider who will revamp the portfolio to suit your profile. However, the Portfolio Manager may at his or her sole discretion sell the existing securities in favor of fresh investments.

The portfolio manager is a trustee acting in a fiduciary capacity on behalf of the investor. Therefore, the tax liability for a PMS investor would be the same as that of a direct investor. However, the investor should consult a tax advisor for the same. Audited statement of accounts provided by the portfolio manager would help the investor in assessing his/her tax liabilities. This is made available, ideally at the end of the financial year.

In PMS, you can specify if you do not want exposure to a particular sector due to direct overexposure through your business, investments or professional association within the sector. For e.g. Mr. Bill Gates may not want his portfolio to have any weightage in the technology sector as he is already overexposed to the sector through his holding in Microsoft.

In the case where a client is the Director of a listed company, then we would request him to make these disclosures to us at the time of account opening. A request letter is also sought from him that clearly states the securities that should not be dealt in. These details are updated in the system, which then automatically refrains from dealing in the specified securities.

  • Professional Management- The service provides professional management of portfolios with the objective of aiming to deliver consistent long-term performance while controlling risk
  • Continuous Monitoring - The PMS provider ensures that portfolios are constantly monitored and periodic changes are made to optimize the results
  • Risk Control - A research team is responsible for establishing your investment strategy and providing the portfolio manager real time information to support it.
  • Hassle Free Operation - All the administrative aspects of your portfolio are taken care of. You are also updated through periodic reporting on the overall status of the portfolio and its performance
  • Flexibility - The portfolio manager has a fair amount of flexibility in terms of holding cash (can go up to 100% also depending on the market conditions). He can create a reasonable concentration in your portfolio by investing in other lucrative opportunities
  • Transparency - PMS provides you comprehensive updates through regular newsletters. Also, through account statements you will know about individual securities held in your portfolio. Web access is also given to access all the pertinent information. A monthly portfolio commentary by the manager provides an overview of the markets as well
  • Customised Advice - PMS gives select clients the benefit of tailor-made investment advice designed to achieve their financial objectives. It can be structured to automatically exclude investments owned in another account or a negative list of investments
  • Personalised Approach - In PMS, a greater personalized access to the professional money managers is given. This interaction can take various forms such as in-person meetings, conference calls, written commentary, etc.

When you have entrusted your money to PMS, you may expect:

  • A relationship manager/ financial advisor with whom you can interact
  • To be updated on any major changes in asset allocation or in the investment strategy relating to your portfolio
  • All administrative matters, including operating a bank account and dealing with settlement and depository transactions, will be handled by the PMS

Most Portfolio Managers allow a choice between a fixed and a performance-linked management fee or a combination. In addition, actual expenses like custodian expenses, audit fee, brokerage on transactions, etc. are charged on actuals. For charging performance-based fee, the concept of high watermark is typically applicable.

Yes. All investments involve a certain amount of risk, including the possible erosion of the principal amount invested, which varies depending on the security selected. You are requested to consult your financial/ tax advisors before taking any decisions.

The differentiators between Mutual Funds and PMS are: