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Portfolio Management Service (PMS)

What is PMS?

Portfolio Management Services (PMS) refer to the service provided by professional managers or fund houses to high net worth individuals to manage their funds. Absolute customization is possible in the case of portfolio management services to achieve the wealth creation goals of the investors. One of the most important things about PMS is that it offers a lot of flexibility as compared to other well-known investment products.


PMS is not subject to the same regulatory restrictions as a mutual fund. As a result, it can be more rewarding but also riskier. A recent change by SEBI has forced discretionary portfolio managers to only invest in listed stocks, bonds, and mutual funds. However, they are still not subject to the same concentration safeguards as mutual funds. In a mutual fund, the money is pooled along with the money of other investors and one gets units in the mutual funds concerned. In a PMS, the stocks, bonds, or other securities are typically held in your own name in your own Demat account and the PMS manager operates it through a power of attorney. Any kind of fraud in this mode of operation is relatively rare but you should check out your Demat and trading statements on a regular basis.

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Units 2/14