Business & Finance

An Introduction to Portfolio Management Services: Features, Types, Terminologies, and Characteristics

An Introduction to Portfolio Management Services

Portfolio management services (PMS) allow investors to obtain professional, expert advice and services beyond the typical financial advisor’s normal services. PMS is tailored to each investor’s needs, considering their risk tolerance, investment goals, and time horizon. By providing an in-depth analysis of an investor’s financial situation, PMS can help ensure that the investments are properly aligned with the investor’s overall financial objectives. It offers various features and benefits, from asset allocation and risk management advice to portfolio monitoring and rebalancing. Whether a beginner or an experienced investor, you can look for the best portfolio management services that can help you make informed investment decisions. It targets the highest returns possible for investors.

What is Portfolio Management Services (PMS)?

Portfolio management services (PMS) are customized investment advisory services provided by investment advisors. In other words, PMS is a type of investment advice customized to meet each investor’s specific needs. PMS is often offered to high-net-worth individuals, institutional investors, and other sophisticated investors with complex financial situations requiring a more in-depth analysis of their financial situation. Notably, Portfolio Management Services are reserved for HNIs (high net-worth individuals) that help them invest in the stock market under the professional guidance of portfolio managers.

Essentially, PMS provides investors with more robust investment advisory services. Whereas a traditional financial advisor may provide general advice about the investments that may be a good fit for an investor, a PMS provider will go beyond that. It helps investors choose specific investments aligned with their financial situation and objectives.

Features of PMS

  • Professional, expert advice and services: PMS helps you grow wealth by investing in the right financial products. Moreover, they continuously monitor your investments and rebalance them to suit your risk profile. PMS also offers market advice to buy or sell based on risk tolerance, where to put your money for the best returns, and how to diversify your portfolio. PMS providers give expert advice to help investors make better investment decisions and reach their financial goals.
  • Comprehensive approach: PMS provides an in-depth analysis of an investor’s financial situation, investment needs, and goals. Comprehensive PMS covers all aspects of the investment process, including asset allocation, portfolio monitoring and rebalancing, and other services such as risk management.
  • Customized approach: Each investor’s situation is unique, and therefore there is no “one-size-fits-all” solution. PMS providers work with each investor to determine their risk tolerance, investment goals, and time horizon and then select the appropriate financial products to help them meet their financial objectives.
  • Investment tailoring: PMS providers work with investors to select the appropriate investment products for their portfolios. PMS providers may tailor their recommendations to each investor’s specific investment needs as part of their service.
  • Ongoing monitoring and rebalancing: PMS providers make recommendations for investors’ investment portfolios based on the current financial situation, but they also monitor the performance of the investments on an ongoing basis and make adjustments when needed, such as rebalancing the investment portfolio.
  • Ongoing advice and services: PMS is not a one-time service but rather an ongoing process in which the provider regularly meets with the investor to discuss their financial situation and investment portfolio.
  • Greater diversification: PMS providers take an in-depth look at each investor’s financial situation, investment needs, and goals and help them select appropriate investments that are properly aligned with their overall financial situation. As a result, PMS helps ensure each investor has a more diversified investment portfolio.

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Types of PMS

There are basically two types of PMS.

1- Discretionary Portfolio Management Services

2- Non- Discretionary Portfolio Management Services

Discretionary portfolio management: what is it?

With discretionary portfolio management, the fund manager has complete control over the client’s investment choices. The discretionary fund manager utilizes the unique approach they believe to be the most effective when making decisions on selling or buying on behalf of their client. Only trained professionals with in-depth investment expertise and understanding can offer this kind of specialized strategy. Clients must have complete faith in their consultant and feel secure knowing that they are leaving their individual investment decisions in the capable hands of a professional.

Non-discretionary portfolio management – what is it?

Simply said, a financial advisor is a non-discretionary method of portfolio management. The advisor will outline the benefits and drawbacks of investing in a specific strategy or market for their client. However, they won’t carry out the procedure without their client’s explicit consent. Using non-discretionary versus discretionary portfolio management services has the above as a fundamental distinction.

Some terminologies to take into consideration

Asset allocation is dividing an investment portfolio among different types of investments. A risk-controlled asset allocation is a critical component of any investment strategy and is the single most important factor in determining an investment portfolio’s risk and return. PMS providers can help investors select appropriate asset allocations based on their financial situation and risk tolerance.

Risk Management

Risk management regularly reviews the investment portfolio and makes adjustments to reduce risk. PMS providers can help monitor and manage risk by regularly reviewing an investor’s investment portfolio and making adjustments when appropriate.

Portfolio Monitoring

The portfolio monitoring process can help reduce the risk of any one investment outweighing an investor’s overall risk tolerance. It’s important to remember that there are no guarantees when investing and that risk is ever-present in any market environment. PMS providers can also help clients set expectations and stay disciplined during bull and bear markets. They can help monitor and manage risk by regularly reviewing an investor’s investment portfolio and making appropriate adjustments.


Unbalanced portfolios can lead to sub-par returns and increased risk. While rebalancing is often recommended after a certain threshold has been crossed. Rebalancing is restoring an investment portfolio to its original asset allocation. Portfolio management systems can help to rebalance an investment portfolio if it has become unbalanced due to changes in the financial markets.

Who should opt for PMS?

  • Those who have limited knowledge of the investment procedures
  • Those who don’t have time to rebalance and monitor investment
  • Those who don’t know how to deal with market volatility
  • Those who are looking to diversify investment to get maximum output need a section on types of pms… there are basically two types – discretionary and non-discretionary… google will give you further info… make sure you compare non-discretionary pms service with RA or research analyst service

We have just updated the types, for now, we will highlight differences in a separate blog. We will have separated blogs for different types of PMS, will that work for now?


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