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Home Knowledge Center Absolute Freedom Login Option This investment option is a What is Portfolio Management Services (PMS)? Portfolio Management Services (PMS) is an investment highly flexible one with a portfolio in stocks, fixed income, debt, cash, structured products Knowledge Center very direct focus. To make and other individual securities, managed by a professional the most of investment money manager, that can potentially be tailored to meet specific openings across a wide investment objectives. gamut of large cap, mid When you invest in PMS, you own individual securities unlike a cap and small cap stocks. mutual fund investor, who owns units of the entire fund. You more have the freedom and flexibility to tailor your portfolio to
3099 Discretionary: Under these services. The offerings are usually ideal for investors: who are looking to invest in asset classes like equity.However the portfolio manager may at his own sole discretion sell the said existing securities in favour of fresh investments. (PMS)? Investment Management Solutions in PMS. The choice as well as the execution of the investment decisions rest solely with the Investor. can be provided in more the following ways: Call Us Anytime! 91 . Currently in India PMS is offered primarily by asset management companies (AMCs) and brokerage houses. However the execution of trade is done by the portfolio manager.3099 4915(D) 91 .3099 4600(B) 91 . What is the tax liability for the PMS investor? The portfolio manager is a trustee acting in a fiduciary capacity .com well as the timings of the investment decisions rest solely with the Investor. fixed income. the client can also hand over an existing portfolio of stocks. Who is an ideal PMS investor? The Investment solutions provided by PMS cater to a niche segment of clients. Advisory: Under these services. the portfolio manager only suggests the investment ideas. Who can offer PMS? PMS can be offered only by entities having specific SEBI registration for rendering portfolio management services. the portfolio reliance.22 . The clients can be Individuals or Institutions entities with high net worth. Although What is Portfolio portfolio managers may oversee hundreds of portfolios. the choice as well as the timings of the investment decisions rest solely with the Portfolio 4927(Fax) Discretionary Non Discretionary Advisory Manager. your Management Services account may be unique. Note: In India majority of PMS providers offer Discretionary Services.portfolios@reliance manager only suggests the investment ideas.3099 4913(D) 91 . The choice as ada. bonds or mutual funds to a PMS that could be revamped to suit his profile.address personal preferences and financial goals.22 . email to Non Discretionary: Under these services. structured products etc who desire personalised investment solutions who desire long-term wealth creation who appreciate a high level of service Does one necessarily have to invest in cash to open a PMS account? Apart from cash.22 .22 .
Therefore. Web-enabled access will ensure that client is just a click away from all information relating to his investment. o market commentary from your Portfolio Manager Customised Advice .It is important to recognise that portfolios need to be constantly monitored and periodic changes made to optimise the results.PMS provide comprehensive communications and performance reporting. However the investor should consult his tax advisor for the same. conference .The Portfolio Manager has fair amount of flexibility in terms of holding cash (can go up to 100% also depending on the market conditions).PMS give select clients the benefit of tailor made investment advice designed to achieve his financial objectives. the tax liability for a PMS investor would remain the same as if the investor is accessing the capital market directly. you may gain direct personalised access to the professional money managers who actively manage your portfolio.Portfolio Management Service provider gives the client a customised service. Personalised Approach . It can be structured to automatically exclude investments you may own in another account or investments you would prefer not to own. Risk Control . Investors will get regular statements and updates from the firm. Flexibility . sales and dividends paid out or reinvested). This interaction may come in various different ways including in-person meetings. a separately managed account provides you with the ability to exclude that stock from your portfolio. o your portfolio's performance in comparison to a benchmark. o details of account activity (such as purchases. For example.Some Portfolio Managers may provide a personal investment management service to achieve the client's investment objective. He can create a reasonable concentration in the investor portfolios by investing disproportionate amounts in favour of compelling opportunities.The service provides professional management of portfolios with the objective of delivering consistent long-term performance while controlling risk. In PMS. backs any firm's portfolio managers. as well as the number of shares you own. Continuous Monitoring . Transparency . o the cost basis of each security. Your account statements will give you a complete picture of which individual securities you hold. What are the benefits of PMS? Professional Management . o your portfolio's asset allocation. The company takes care of all the administrative aspects of the client's portfolio with a periodic reporting (usually daily) on the overall status of the portfolio and performance.A research team responsible for establishing the client's investment strategy and providing the PMS provider real time information to support it. The portfolio manager ideally provides audited statement of accounts at the end of the financial year to aid the investor in assessing his/ her tax liabilities. if you are a longterm employee in a company and you have acquired concentrated stock positions over the years and have become over exposed to few company's stock.on behalf of the investor. Hassle Free Operation . It will also usually provide: o the current value of the securities you own.
150 at the end of the year. custodial services and towards meeting tax payments. All administrative matters. audit fee.earned over and above a threshold level. apart from a performance-linked fee usually it may include a flat fee. For instance. 150 mark. 110.50 per cent of portfolio value." Portfolio Management Services and Mutual Funds: The . If one opts for the fixed fee. as a detailed statement of the transactions on his portfolio for tax purposes comes as a part of the package. separate charges will be levied towards brokerage. 150. etc with the fund management team. Apart from management fees. which may be charged on actuals.usually 15-20 percent . he pays a fee on the profit of Rs. this is usually calculated on a weighted average basis. written commentary. That is. If the value of his portfolio slumps to Rs. one pays the fee only on the positive returns on his portfolio. Usually the fixed fee component is charged on a monthly basis and the variable component is charged on a yearly basis. the Rs. he may pay between 2.50-3. Subsequently. What can you expect from PMS? When one has entrusted his money to a PMS. usually. if one invests Rs.calls. The structure for the performance-linked fee differs across players. including operating a bank account and dealing with settlement and depository transactions. One can expect to have a relationship manager/ financial advisor through whom he can interact with the fund manager at any time of his choice. 70. which may range between 8 per cent and 15 per cent. Keeping track of capital gains (and losses) for the taxman can be a depressing chore. he will receive a user-ID and password from the PMS. 100 in a PMS and its value appreciates to Rs. a fee will be levied only on gains over and above the Rs. On handing over one's money. What one pays for PMS? Most Portfolio Managers allow one to choose between a fixed and a performance-linked management fee or a combination. the profits are reckoned usually on the basis of "high watermarking". one can expect: Handholding from his portfolio manager than he has been accustomed to from his mutual fund. and climbs back to Rs. To be updated on any major changes in asset allocation or in the investment strategy relating to his portfolio. Opting for PMS will free him of this chore.When one opts for a performance-based fee. One can also expect frequent (maybe monthly) interaction with the portfolio manager to discuss any concerns that he might have. brokerage on transactions etc. 50. This fee is apart from the actual expenses like custodian expenses. He can use these to check back on his portfolio as often as he likes. will be handled by the PMS. the previous "high watermark. which will grant him online access to his portfolio details. 40 you earn will not be reckoned as profit. The portfolio manager also gets to share a percentage of your profit . when one has furiously churned his investments through the year. You will again be charged a fee only if the value of your portfolio recovers to over Rs.
personalized access to professional money management services Customization Management Ownership Liquidity Although managers may hold cash. they are not required to hold cash to meet redemptions Significantly higher minimum investments than mutual funds.Differences Features Management PMS Provide ongoing. allowing for tax management flexibility Mutual Fund Provide access to professional money management services Portfolio structured to meet the fund's stated investment objectives Provide access to professional money management services Shareholders own shares of the fund and cannot influence buy and sell decisions or control their exposure to incurring tax liabilities Mutual funds generally hold some cash to meet redemptions Provide ongoing. 20 Lacs + for Structured Products Flexibility Generally more flexible than mutual funds. personalized access to professional money management services Investors directly own the individual securities in their portfolio. personalized access to professional money management services Portfolio can be tailored to address each investor's specific needs Provide ongoing. 1 Crore + for Equity Options Rs. Generally. The Portfolio Manager may move Comparatively less flexible . minimum ranges from: Minimums Rs. 5 Crore + for Fixed Income Options Rs.
Ongoing Personal Service:PMS service may include ongoing communication and frequent contact from the Financial Advisor.to 100% cash if required. 5. 3. the Financial Advisor can recommend adjustments to help meet investor objectives. and help you decide whether it may be appropriate to: modify your expectations to reflect a changing market. The Financial Advisor's choice of managers is generally based on the manager's investment style and performance history. cash. This process may include the following: 1. The Portfolio Manager can also manage a portfolio with disproportionate allocation to select compelling opportunities The Role of the Financial Advisor The Financial Advisor should guide the investor through an ongoing consulting process designed to lead him towards his investing goals and keep his investment strategy on track. such as large cap growth. fixed income. 4. structured products and other investments and also determine which investment vehicles are most appropriate for the investor. the Financial Advisor may suggest an asset allocation divided among stocks. If a change is needed. o o o Frequently Asked Questions . the Financial Advisor may recommend specific portfolio managers who manage assets in a particular style. in addition to periodic reviews. Having a mix of broad asset categories is an important factor in achieving the investor's investment objectives. Selecting Investment Managers and Investment Vehicles: After determining asset allocation. Managing and Monitoring Investor Accounts: Investors may receive periodic statements detailing their account's holdings and performance. Setting Goals and Guidelines:The investor along with the Financial Advisor can work together to identify his financial goals and expectations. the professional relationship he or she has developed with the manager and the manager's firm. adjust your risk considerations. 2. and a number of other criteria. Also the Financial Advisor may help you put investment performance in the proper perspective. debt. The Portfolio Manager may take his own time in building up the portfolio. Determining Asset Allocation:Based on the investor objectives. or reallocate the assets in your portfolio. which can be translated into a longterm investment plan. The Financial Advisor may want to meet with the investor to explain the information in these statements and evaluate the performance in light of his goals. for example.
portfolio managed account holders own the individual securities in their accounts. Q: What types of investors own PMS accounts? Each individual client has different needs that change over time. value and growth and international asset. debt. Q: How much input does the investor have in the stocks . risk tolerance and other factors. Q: What are the benefits of PMS? PMS can offer the following characteristics: individualised portfolios. the investor and the Financial Advisor may decide not to invest additional assets in the company. time horizon. and continues to provide the services of a primary relationship manager. transparency. or that some holdings be sold to produce capital gains or losses. including large cap. among others. A Financial Advisor can help the investor decide whether portfolio management service is appropriate. structured products and other securities that is tailored to meet specific investment objectives. mid cap. Q: How does the investor stay updated on his portfolio's performance? Regular communication from the portfolio management team is an essential tool in keeping the investor and the Financial Advisor informed. based on his current financial situation. small cap. multi cap. Q: What is the difference between a PMS account and a mutual fund? Unlike an investor in a mutual fund. fixed income. For example. Financial Advisors also help in evaluating the investment performance of the investor.Q:What is Portfolio Management Services? PMS is an investment portfolio of stocks. if the investor owns his employer's stock in investment. investment objectives. Q: What is the role of the Financial Advisor after a PMS account is opened? The Financial Advisor helps the investor identify and select investment options. Although investment managers oversee hundreds of accounts. the investor may request that the portfolio include or exclude a particular security or sector. monthly investment commentary. flexibility. or other preferences and restrictions on the management of their accounts. professional management. sector. Q: What investment strategies are available? PMS is offered in a wide variety of asset classes and investment styles. Q: What if the investor has special requests? PMS allow investors to impose reasonable stock. Financial Advisors take on a consultative role with the investor by helping the investor work with the portfolio management team to discuss and determine the appropriateness of the investor's current investment strategy. diversification and asset allocation. cash. Among the tools that are usually provided: periodic performance reporting. a PMS investor's account is "separate" from that of any other investor. which gives the investor the ability to direct the manager to customize the portfolio based on personal and financial needs and goals. richer canvas. and online portfolio information. For example.
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