Portfolio Management Services (PMS) are one of the most popular approaches in the financial industry. This approach involves offering personalised and tailored services to investors.
Here, portfolio managers design investment management solutions to meet customers’ financial goals and risk appetites.
Investors hold a portfolio of investments, such as stocks, bonds, securities, etc., managed by fund managers. Moreover, through PMS, investors can still maintain ownership of their assets.
This article looks into the minimum investment required to acquire portfolio management services.
Understanding Portfolio Management
High-net-worth individuals receive exclusive services through Portfolio Management Services (PMS), which is a service provided by a portfolio manager to investors.
The primary purpose of appointing a fund manager is to reduce risk and increase returns. An investment portfolio comprises stocks, commodities, fixed income, cash, etc.
Moreover, portfolio managers consider the tax implications, risk profile, financial goals, etc., and suggest the right investment products to investors.
What is the Minimum Investment Required for PMS?
The portfolio manager is a licensed professional who manages investment portfolios and is well-versed in various market instruments.
He also brings his expertise and invests the investor’s money in high-performing funds with low-risk profiles.
Furthermore, he studies the investors’ financial goals and ensures they align with the investments made.
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PMS Investment Regulation
The minimum investment required for PMS is higher than that required for mutual funds. SEBI is the regulatory body that oversees the PMS industry.
Considering small investors, SEBI has set the minimum investment amount for PMS at Rs.50 lakhs.
Moreover, fund managers work on wealth creation, considering the investors’ investment preferences.
PMS is not suited for all investors. It only suits investors with diverse portfolios. Moreover, high-net-worth individuals with diverse portfolios usually own high-entry investments.
Previously, the minimum investment for PMS was ₹25 lakhs. However, it has now become Rs.50 lakhs. With PMS, investors can invest in products not launched in the market.
This is a significant advantage for PMS investors. Investors highly value the association with PMS because it is exclusively customized to their needs.
Portfolio Management Investment – Conclusion
With an investment of Rs.50 lakhs, an investor can hire a portfolio manager and enjoy portfolio management services.
PMS is highly recommended for investors with considerable assets to manage. However, the investor must decide whether to invest in PMS.
Nevertheless, investors can enjoy impressive returns and create more wealth under a low-risk profile if chosen.