How to select the best Portfolio Management Service in India?

What are Portfolio Management Services?

Just as Mutual fund managers manage a portfolio, a Portfolio Management Service providers become your own personal financial manager and take care of your money. Portfolio Management services or PMS schemes are generally for High Net Worth Investors (HNIs) or investors who have a lump-sum corpus to invest.

Be it for retirement or any other goal, PMS providers support you to deploy your funds in the right assets for maximum growth and minimum risks. A portfolio manager evaluates your risk-taking capacity and allocates your funds to different asset classes such as Equity, Debt (Fixed Investment Instruments), and alternative investments proportionately. Unlike a Mutual Fund, a PMS Schemer is designed uniquely to address your needs according to your financial position.

Who requires a Portfolio Management Service?

Any individual who has an adequate amount of money to put to work can employ the services of a portfolio manager. However, you can resort to self-investing, but that requires knowledge, experience, skills as well as time to get good returns. Many investors might not have one of the essential qualities to conduct self-investing. Hence, the portfolio manager comes into the picture.

Types of Portfolio Management Services in India.

There are primarily four types of prevalent portfolio management services in India, they are as follows.

  1. Active Portfolio Management

In an active portfolio management service, a dedicated manager will aim to beat the index returns by taking certain positions in numerous assets. Here the portfolio manager will not only restrict himself to the indices stocks but actively trade in other securities to get better returns than the benchmark index. However, in order to beat the benchmark index, portfolio managers tend to take on additional risks. For investors who don’t want the additional risk exposure, the next type of scheme might be suitable.

  1. Passive Portfolio Management

Unlike Active Portfolio Management services, where the fund manager does not actively buy and sell securities. Alternatively, the primary aim of the fund managers is to generate similar returns as the benchmark index and to keep the turnover as minimum as possible. Generally, the manager of these schemes buys the securities under an index with a similar weightage to extract similar returns. This results in lower transaction costs and additional costs incurred by buying and selling securities.

  1. Discretionary Portfolio Management

Under a discretionary portfolio management service, the manager is given absolute control over the funds. The manager can implement any strategy and allocate any desired percentage of the funds to an asset of his choice. Due to the higher involvement of the management, the fees are also higher when compared to active or passive PMS. Although the transparency in this type of service is the lowest but it’s the best for investors with limited knowledge and skills in this field.

  1. Non-Discretionary Portfolio Management

In a Non-discretionary portfolio management service, the manager possesses no control over the investor’s funds without their authorization. In this scheme, the manager acts as a consultant who prepares various investment road-maps for the investor to reach their destination. Although the manager can advise and instruct certain investment decisions, the investor will make the ultimate call, whether to implement the advice or not.

Steps to select the best Portfolio Management Service

Now that you have gone through the types of Portfolio management services available in India and chosen one as per your needs. It’s time to make sure of certain points from the manager which will ensure the safety of your capital as well as maximizing the returns.

  1. Look for the top Portfolio Management Service providers with the right investment approach.

There are many entities that call themselves portfolio managers, but that does not mean they can be believed in. When handing your money to someone, make sure the managers are credible and have a good track record of decent returns. The proper approach is equally necessary by the managers. The right approach should be of capital preservation rather than trying to extract the maximum returns of the capital.

  1. Look for services that provide streamlined and holistic products.

You should select a PMS in India which includes transparency with their clients. You should be capable to track your investments online as well as get frequent updates on your funds. Alongside, look for services that integrate the services of a CA for all the taxes-related concerns. A professional taking care of all the tax calculations and filings will make the experience much more streamlined than trying to do it by yourself.

  1. Look for Portfolio Management Services with added advantages.

In order to select the best Portfolio Management Service provider in India, you will have to eliminate all the inferior ones. Look for services where you get some extra features like No Lock-In on your funds, No Exit-load, ability to switch investment strategies, additional purchase and withdrawal facilities, etc. All or some of these features will include additional layers of efficiency which will be helpful in the long run.

  1. Look for a hassle-free and personalized approach

When you want a manager to handle your investments, you would demand a piece of mind rather than regular hassles. Therefore, look for a service provider which doesn’t require you to process administrative paperwork or other things.

Plus, the chief aim should be to get a personalized investment plan tailored to your specific requirements. Most renowned portfolio management services focus on a personalized approach and communicate with you periodically for meaningful communications.


Before you appoint a portfolio management service, it is important to run a risk profiling and expected return on yourself. You need to plan your financial goals and requirements. Once you have done that, select the type of service that you want to opt for. Then while looking for a PMS, make sure it has some of the above-mentioned qualities like no exit load, the flexibility of shifting funds, etc. The last and final step is to monitor and track the performance of the fund, and switch managers if your feel the necessity.

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