What is PMS and Its Advantages

Many individuals who have plenty of wealth with them to invest in capital markets but them refrain from investing because of lack of financial knowledge needed to invest in markets, for such individuals PMS can be very valuable thing.

PMS is called portfolio management service which is a highly specialized service that is tailor made for the client. In this service a portfolio manager is assigned the task of managing the investments of the client. Portfolio manager will ask the client about his preference that is how much to invest, his risk tolerance, time horizon of investments and then formulate the investment strategy. For PMS one has to pay either a flat fee structure which is a fixed amount or it can be performance based depending on the return on investments generated by the manager, still PMS has the following advantages –

1. The client gets to utilize the services of a portfolio manager who is an expert in his field and hence chances of good returns on investments are enhanced.

2. Since portfolio manager make use of risk management tools, portfolio of the client is protected against volatile market movements, also client get the advantage of fundamental and technical research on markets s well as individual stocks done by the manager.

3. Portfolio management service is a cheaper option as compared to mutual fund in which there is entry load and also there is no client wise segregation like PMS.

Though PMS is provided to only those who are high net worth individuals (persons having large amount of money). Still it is an invaluable service for individuals who are not familiar with equity markets.

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