What are the Benefits of PMS?

Last Updated: 8 Sep 2025

Growing wealth in today’s dynamic markets calls for expertise, time, and strategy. Many investors who lack either the bandwidth or the know-how delegate this task to professional Portfolio Management Services, popularly called PMS. Unlike mutual funds, these bespoke mandates allow portfolios to be tailored to individual goals, risk appetite, and tax nuances.

What are Portfolio Management Services?

PMS or Portfolio Management Services is a customized investment avenue for High Net Worth and Ultra High Net Worth clients. PMS are similar to Mutual Funds with a higher degree of customization. While the cost involved in investing in a PMS is comparatively higher, the benefits of PMS are numerous.

Types of Portfolio Management Services

1.Discretionary PMS

The manager has full authority to select, buy, and sell securities on your behalf within the agreed mandate. It suits investors who prefer a hands-off approach and trust the manager’s expertise.

2.Non-Discretionary PMS

Here, the manager suggests trades, but execution happens only after you provide explicit consent. It is ideal for investors who want expert research yet wish to retain control over every transaction.

3.Advisory PMS

The service offers periodic asset-allocation and security-selection advice, while the actual execution remains your responsibility. It works well for seasoned investors who simply need a strategic sounding board.

4.Thematic or Sectoral PMS

Portfolios revolve around a single theme, say, green energy, financial inclusion, or consumer brands, allowing you to express high-conviction views in a focused manner.

5.Quantitative or Rules-Based PMS

Investment decisions stem from algorithmic models that screen for factors such as momentum, value, or low volatility, aiming for emotion-free consistency.

6.Hybrid or Multi-Asset PMS

These mandates blend equities with debt, gold, or international assets, offering a balanced risk-return profile and a smoother performance curve across market cycles.

Choosing the right PMS in stock market hinges on your financial goals, risk tolerance, and the degree of involvement you desire. A candid discussion with a qualified adviser can help match you with a service that aligns strategy, transparency, and flexibility in the way you want your money managed.

Benefits of PMS

The numerous benefits of availing portfolio management services are extensive. If you want to know what are benefits of PMS, read on –

Asset diversification

Among the most crucial benefits of portfolio management is asset diversification. PMS is professionally managed by experienced fund managers with investment decisions corroborated by technical and fundamental analysis. Fund managers with management expertise determine the entry and exit timelines.

Secondly, Portfolio Managers use a holistic approach and enable clients in overall portfolio diversification, thereby aligning with your overall financial planning. Thirdly, PMS offers a wide variety of investment avenues including real estate investment trusts, commodities, structured products, debt instruments, and foreign assets. Price movements for such assets are not directly dependent upon the equity markets and act as an efficient diversification tool. The ease of investment in such assets is significantly lower and is fast-tracked if executed through a PMS.

Portfolio Customization

The USP of any PMS is the level of customization available for individual investors. PMS allows an investor to choose the asset type mix in line with the risk appetite. The portfolio is customized as per the investment objective and liquidity requirement of the investor. In addition, for non-discretionary PMS, the client is required to approve the investment decisions of the portfolio manager. Hence, there is an element of control with the investor. The investment decisions of an investor do not have any bearing on options obtainable to any other investor. PMS has isolated and independent holdings for each of its investors.

Governed by Regulations

PMS and fund managers are tightly monitored by regulations. Portfolio managers are required to periodically submit transaction statements, holdings, costs details, etc. to government authorities. They need to provide investors with their holding statements, revenue, expenses, comparative performance of funds, benchmarking, etc. Thus, PMS provides complete transparency to its investors and facilitates informed decision-making.

Transparent Fee Structure

Further, PMS in investment extends flexibility and transparency regarding the fee structure. Investors may select a fixed or flexible fee structure. Performance fees are shared as a percentage of the total revenue earned, more than the determined hurdle rate. Investors are offered detailed statements mentioning the expense ratio and fees charged regularly.

Realtime Access

Most PMS are tech-savvy and have established online portals to set up online access for investors. They are presented with real-time access to their portfolio values, holdings, expenses, etc. Research reports and related information are also available for investors to understand the rationale for investment. An option to redeem, trade, or top-up the portfolio online may also be available to an investor. Some PMS also use artificial intelligence and robotics to analyze investor objectives and design an efficient financial plan.

Dynamic Portfolio Rebalancing

PMS partake in an aggressive investment approach and render dynamic portfolio rebalancing services. Basis market fluctuations and volatility, fund managers reshuffle the exposure across different asset classes. The focus is not only on the short-term and long-term gains but also on the overall quality of the portfolio.

Final Word

Ancillary benefits include direct investment in the name of the investor (unlike mutual funds), in-depth investment rationale, and a one-stop shop for investing. On the downside, investing in a PMS is subject to capital gain tax and reduces tax efficiency. It also involves tedious paperwork due to strict regulations. All-in-all, it is worth considering for HNI and UHNI clients.

Frequently Asked Questions

How much does a Portfolio Manager Charge?

The charges for portfolio managers differ from one person or firm to the next. However, the management fee varies based on the management style and size of the investment.

How do I choose a PMS?

The primary factor to consider while choosing a PMS investment is the depth of knowledge the individual possesses about the entire financial market. It is also important to have a portfolio manager who is completely transparent with the transactions and profits being made through your investments.