What are Portfolio Management Services?

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Investment portfolios generally consist of investment in a wide range of securities like bonds, stocks and cash equivalents. This combination depends on the investor’s risk tolerance level with their effective returns potential of the portfolio Investments.

However, establishing a strong investment may be challenging especially if they invested as an amateur. This demands extensive knowledge regarding the market and the securities, in order to calculate the return risk ratio accurately. This is a Portfolio Management Services role.

Portfolio Management services or PMS offer tailor-made investment solutions to each of their investors according to the risk tolerance and financial capabilities in order to get the best returns. Choices regarding the solutions are in relation to debt v/s equity investment, the risk to return balance and the Time Horizon of the investor, which determines how long they are willing to invest.


There are three types of Portfolio Management Services:

  • Discretionary

In this type, the investors do not have to make any financial decisions. all the necessary financial decisions and actions are taken by the portfolio manager

  • Non-discretionary

In this type, the portfolio manager suggests possible courses of action and works according to the direction given by the investor client

  • Advisory

In this type, Portfolio managers it was investors and health and make informed investment decisions. Here the investor executes the trade.


Some of the important objectives of Portfolio Management services are given down below:

  • Capital growth

One of the main responsibilities of a portfolio manager is capital growth. A portfolio manager will always look for the best investment opportunity that appreciates the capital of the investor client.

  • Tax planning

There are a lot of tax liabilities an investor must stick to while making Investments. Furthermore, multiple tax provisions can help investors reduce their tax liability. Professionals that are managing the portfolio must ensure that all the investments comply with the tax implication while helping them save tax whenever possible.

  • Rebalance portfolio

This means going back to the original mix of securities after fluctuations or movements in the market tilt the balance towards a particular form of security, and it is usually done annually.

  • Diversification of risk

Diversification of risk is done to selectively meet the goal of the investors while also maintaining a healthy risk-return ratio. This can happen in the following ways:

  • Debt v/s Equity

While equity investments are known for their high risk and return potential, Debt instruments can help lower the risk of a Portfolio and  add liquidity

  • Domestic v/s International

Portfolio managers will seek to diversify risk by evaluating investment opportunities in domestic and international markets. This helps them to diversify between various economies.


Some of the benefits of Portfolio Management services are:

  • Performance tracking

Other services have websites or apps where the investors can track the holding in real-time. However, unlike mutual funds, an investor comes to know the status of the whole time once in a month or quarter, this gives the investor better control over investments

  • Highly customisable

The portfolio manager can diversify the investments based on investment risk tolerance and expectations regarding Returns

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