InvestorQ : What is Portfolio Management Service (PMS) and what are its types?
Anushri Vasa made post

What is Portfolio Management Service (PMS) and what are its types?

Answer
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Tanu Shukla answered.
10 months ago


It is a service targeted at High Net-worth Individuals who have a high-risk appetite, and the minimum ticket size of the investment required under PMS is Rs.50 Lakh.

PMS can be a good option for those who want to look beyond equity. It is a professionally managed service by experts in their own fields and helps the investor to capture better returns by diversifying the portfolio.

PMS can be categorized into 3 different types:

  • Discretionary: Under this type of portfolio, the service provider is allowed to make decisions on behalf of the client, be it buying decision or selling decision. The service provider is not bound to consult it first with the client and then take any action.
  • Non-Discretionary: Under this portfolio, the manager suggests some ideas to clients keeping in mind the risk appetite, goals, etc. of the client and the final decision to invest is taken by the client. The client chooses stocks or other investment products. However, the execution of the overall trade is done by the manager.
  • Advisory: Under this type of service, the manager only advises the client on whether or not make a certain investment. The choice and trade are executed by the client himself.