If you are a very wealthy person, who is inept at handling finances, or who does not have the time to analyze and park money in an appropriate instrument, you need to engage a Portfolio Management Services (PMS) company.
What does a PMS do?
A PMS company will on your behalf invest in various investment instruments to generate good returns along with safety. For this, they will charge a management fee, which varies.
You will essentially have a portfolio manager, who will understand a whole lot of things about you, before he decides where and how long to park your money.
Let us cite an example. If you are a risk averse individual, who clearly specifies the same to your portfolio manager, chances are that the PMS company will have very little or no exposure to equities on your behalf.
In fact, the portfolio manager, may park his entire money in safe government securities.
On the other hand they may take exposure to equities, if you suggest to them that you are willing to take a risk. If you are 50 years and above, they may choose to have lesser exposure to equities and more in debt.
This is just an example and need not be the investment format.
What are the benefits of PMS services?
There are various benefits of Portfolio Management Services. Among these include, expert managers, continuous monitoring, transparency, hassle free management etc. The most important benefit that we believe you would get from a PMS company is expert advise across instruments from debt to equity to gold and mutual funds. The PMS service also helps you to save valuable time.
A look at some of the best portfolio management services
It is very difficult to quantify which is the best portfolio management services company. Renowned investor Porinju Veilliyath who has made a fortune through investing in equities, runs his service through Porinju Velliyath Equity Intelligence.
Motilal Oswal another renowned name in the stock market circles also runs its own PMS services. It is known to have one of the largest active accounts under its PMS service. They also offer a CA certified client tax statement.
ASK Investment Manager is again one of the best portfolio management service providers in India. The company manages both domestic and offshore clientele. However, the company focuses on equities only.
The charges to manage the portfolio would really vary. Some charge 2.5 per cent of the fund size, while others charge more. You would have to find the same with the company before you decide on engaging a portfolio management company.