Benefits of Portfolio Management Services

Portfolio management services refer to the customised investment portfolio management for HNIs and institutions by professional managers. They build and manage portfolios tailored to the client’s financial goals, time horizon, and risk profile, with periodic reporting and rebalancing. There are several benefits that investors should also be aware of in this regard. Here is a closer look at them below. 

Key Benefits of Portfolio Management Services

Here are some of the key advantages of  portfolio management services -

• Professional Expertise

Portfolio management offers professional expertise and guidance. Experienced portfolio managers handle your investments, backed by dedicated research teams. Their deep market knowledge and strategic acumen help them make informed investment decisions on your behalf. This helps you better handle risks and volatility, while adjusting portfolios to optimise and risk-adjust returns. 

• Customised Investment Strategy

Unlike generic funds or other investments, PMS helps build a portfolio that is tailored to your specific financial objectives, time horizon, risk appetite, and liquidity requirements. It helps you align investments precisely with your goals. 

• Active Management and Rebalancing

Your portfolio will be continuously tracked and proactively rebalanced in response to market changes and your evolving financial scenario. It will help you benefit from active risk mitigation. PMS can help you identify and tap new market opportunities better as well. 

• Diversification for Risk Management

Professional managers help to build a more diversified portfolio throughout multiple asset classes, including equity, debt, commodities, and other instruments. They will also help you diversify across multiple geographical regions, sectors, and company sizes. The end goal here is to spread out and reduce concentration risk while cushioning the impact of market volatility or downturns. 

• Transparency and Direct Ownership

You will hold the individual securities directly in your demat account rather than in pooled funds/units. This will give you direct ownership over these individual securities throughout the entire journey. At the same time, you will also get full visibility into your holdings, performance, transactions, and more on a real-time basis. There will also be regular, detailed reporting, in addition to online access. 

• Tax Efficiency

Portfolio managers will implement smart strategies to help you manage your capital gains better, while timing buy and sell decisions to optimise post-tax returns. They will implement strategies to lower tax liabilities. 

• Convenience and Peace of Mind

The biggest benefit that PMS offers is mental peace. You can delegate the day-to-day fund/wealth management job to professionals, while saving time and effort in the bargain. You also benefit from day-to-day research and smart strategies, along with regular tracking. Also, there is the confidence that an experienced professional or entity is managing the investments and making informed decisions on your behalf. 

• Focused Portfolios

With PMS, you get the advantage of more focused portfolios that are tailored to your risk appetite, financial scenario, preferences, and so on. You can build a portfolio that is more attuned towards your chosen sectors and asset classes, or even specific company sizes, as per your desired strategy. Everything is tailored to your needs, and that is one of the key portfolio management benefits. 

• Regulatory Compliance and Investor Protection

Another advantage is that PMS providers are registered and regulated by the SEBI (Securities and Exchange Board of India). This ensures compliance with strict disclosure, ethical, and compliance standards. It goes a long way towards safeguarding investors and, in turn, building trust. 

How PMS Benefits Different Types of Investors

There are several portfolio management advantages for different types of investors. They include: 

• Busy professionals or HNIs

Some core benefits include expert management, time savings, and access to superior research and investment management. It eliminates the need for constant market monitoring while portfolios are built around specific financial objectives. 

• Risk-averse investors

PMS enables diversification of investments across multiple asset classes to reduce risk. At the same time, it also offers active monitoring and risk mitigation/management strategies and techniques. There is full transparency with regular performance reports. 

• Growth-oriented clients

PMS offers access to growth, value, or momentum investing strategies, along with the potential to earn higher returns. This is possible through more concentrated positions than those allowed by mutual funds, potentially generating alpha (returns above market benchmarks). 

• Investors seeking flexibility or control

Those seeking control may opt for discretionary PMS (where managers have full authority) or non-discretionary PMS (where client approvals are required for decisions). At the same time, portfolios are dynamically rebalanced in response to personal requirements and market changes. 

Who Should Consider Portfolio Management Services

Portfolio management services are worth considering for HNIs (high-net-worth individuals), busy entrepreneurs, professionals, and NRIs who can invest a minimum of ₹50 Lakh in PMS, as per legal requirements.

It is ideal for anyone who wants direct ownership of individual securities, along with customised portfolios built to personal preferences, goals, and risk appetite.

At the same time, it also suits those looking for hands-off management, informed and research-based decision-making, and time/energy savings in managing investments/wealth. 

Complex family wealth structures, tax considerations, transitions from pooled funds, and the desire for dedicated research, management, and portfolio rebalancing also make a strong case for choosing PMS.