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Questions (FAQs) on
Portfolio Management Services
What is PMS (Portfolio Management Services)?
Portfolio Management Service (PMS) is a customized professional service offered by SEBI registered investment advisors/financial institutions/brokers etc. It caters the investment management of portfolio of investor with the help of professionals in Investment advisory services. Portfolio manager is a professional who manage the client's fund either on non-discretionary or discretionary basis.
Types of PMS (Portfolio Management Services)
"Discretionary" portfolio management service said to be the investment decisions are made by portfolio manager's judgment. The main objective of discretionary PMS is to beat the benchmarks.
Non-discretionary portfolio management services said to be the investment decisions can be approved by the client i.e. the trades must be discussed and approved by clients before taking place.
What are the benefits of PMS?
Managed by Professionals: PMS provides professional management of portfolios with the objective of creating wealth subject to the controlling of risk.
Constant Portfolio tracking: Equity as an asset class is very much volatile, constant tracking is mandatory to generate good returns.
Transparency: If you opt for PMS – Portfolio management services, you will get performance reports, account statements, capital gain/loss statement etc. on monthly basis. Beside this you will be able to track all information related to your investment on daily basis as well.
How can I put money in my PMS account?
Your PMS account will be activated only after you deposit a minimum of INR. 25 lacs in the account. To put in money, you can use either use cheque, RTGS etc mode of payment.
How can I monitor my PMS portfolio?
Portfolio Management Services can be managed by professionals, you will get the reports of stocks, profit and loss statement, Holding Statement, Account Performance Statement, Transaction Statement, Debit Note, Taxable Gain/Loss statement etc. on the basis of reports you can easily monitor your portfolio.
Can I specify sectors allocation I want or don’t want to invest?
PMS are of two types, discretionary as well as non-discretionary. The preference of PMS (discretionary or non- discretionary) will be decide before entering into PMS.
Can I meet my PMS team?
Yes, you can anytime meet your portfolio managers and that meeting has been arranged by your PMS provider on monthly/quarterly or half yearly basis.
Eligibility for PMS:
If you are a citizen of India, any Individual, HUF (Hindu Undivided Families) , association of persons, Pvt. Limited Companies, NRI (Non-Resident Indian), overseas companies, firm, society with minimum investment of INR 25 Lakhs as per SEBI norms.
Portfolio Management Services (PMS) Charges
The charges of PMS have been decided by investor at the time of investment. Charges of PMS will be applicable as:
Entry Load – At the time of buying PMS scheme from any professional, it may have an entry load of around 3%.
Fund manager Charges – Fund manager charges are applicable on every PMS Schemes charged by PMS provider. The Charges will be between 1 to 3%, depending on scheme provider. It is charged on a quarterly basis to the investor account.
Sharing of profit – Some of the PMS provider also has an option for profit sharing depending upon the return generated from the investment subject to the minimum portfolio size of 25 Lakhs.
Beside these charges, PMS provider also charges custodian fee, Demat account opening charges, audit charges, transaction brokerage etc.
How do PMS schemes work?
Each PMS scheme has its own value and valuation. There is no NAV for a PMS scheme; the investor will get the valuation of his/her portfolio on daily/monthly basis (depending upon the PMS provider). Every PMS scheme has its uniqueness. MS scheme has a standard portfolio and investments of a client (investor) are done in the Portfolio Management Services on the basis of model portfolio of the scheme. Sometimes the portfolio can be differ from investor to investor as difference at the time of entry, difference in amount of investor (ticket size), additional purchase/ redemption of units or stocks.
How do I find PMS Advisors near me?
While selecting a wealth manager, you must verify whether that wealth advisor and/or his firm are licensed by SEBI for wealth management or not. You should also look out for more & more information about the background of the advisors and ask for their past performance figures. Having a look at their overall wealth trends would also give you a good amount of signal about the wealth manager.