If you have loads of money you can think about portfolio management services (PMS). It may involve more expenditure but at the same time you deserve ‘mehmaan nawazi’ with 5 start services. Suppose you want to invest. You can select the avenues of investment and invest. You, naturally, will try to invest where returns will be comparatively more or tends to maximum. But if you need guidance or an active participation of a guide, your best guide will be a PMS Manager who will guide you on how and in which shares, debentures or projects you should invest, or will decide to invest, on your behalf.
A portfolio may be referred to as a ‘furnished garden’ of different investments, altogether, where money is invested in Shares, PPF, Fixed Deposits, and Mutual Funds in a scattered manner. Therefore, the role of a PMS Manager is just like an efficient gardener who selects the right avenues of different investments, a combination of proper plantation of different investment trees to get the expected returns of fruits and flowers as much as possible.
Under PMS organisation, there may be one or more than one manager. There are two types of PMS functions –discretionary and non-discretionary. Under first method, a PMS Manager or his team makes all kinds of decisions on behalf of the client -investor. All powers of making decisions will be vested in the PMS Manager by the concerned investor through an agreement. Under the second method, the investor decides his own investment plan and according to that, the PMS Manager will do the job. He has no power to invest anything without the approval of the investor. Even an organisation too may get the benefits of portfolio management services. You can get in touch with PMS organisations through the relationship manager or investment analyst of your bank. Moreover, many PMS organisations have their own distributors through whom any individual or even an organisation can connect with the PMS organisations.
After the preparation of agreement made between an investor and PMS Manager, a PMS account will be opened in the name of that investor. A D-Mat account is opened for buying or selling of shares or debentures. The money can be remitted to PMS Manager through net banking. This is the way an investor can watch how the money is being invested in different financial instruments. If the said investor has any doubt or if he wants to know more about his own fund or methodology of investments, it can be seen.
Under PMS the minimum amount of investment is Rs 25 Lakhs. As per the demand of the investor, there is always an opportunity to change the shares in the portfolio under PMS. The investor is the owner of Shares directly and hence it can be bought and sold, whereas under Mutual Funds, a mere partnership belongs to the same investor but not full ownership. PMS Manager selects shares under his own discretion with the objective to increase the fund of each investor, as per agreement. How much will be invested and for what period or periods — a PMS Manager has the power to decide those. The manager can even put the entire money in the Capital Market. PMS Manager participates in the process of trading and selection of shares or debentures, under the discretion of the client investor. Normally shares of 15 to 20 organisations are invested in after selection. If the PMS account is closed, shares are returned directly to the D-Mat account.
Ultimately a little more expenditure sometimes brings manifold benefits to the investors and Portfolio Management Service is the best instance for that, where risk is properly diversified and the chance of fetching expected return is much higher.