Strategies to Select a Good Portfolio Management Service | Motilal Oswal

Strategies to Select a Good Portfolio Management Service


A Portfolio Management Service (PMS) is a tailored investment solution. Financial experts and firms offer this service to manage your investments on your behalf. PMS works by assigning a dedicated fund manager who handles your investments. They aim to generate optimal returns while considering your risk tolerance and financial goals. 

PMS includes constructing and maintaining a diversified portfolio of stocks, bonds, and other assets. They are personalized to meet your specific investment objectives.

Open Your free Demat Account in just 5 minutes!

Here are some strategies to follow.

1. Assess Your Goals and Risk Tolerance

Before you even start searching for a portfolio management service, take a moment to think about what you want to achieve. Are you saving for retirement, a dream vacation, or buying a home? Different services cater to different goals. Also, think about how comfortable you are with risk. Are you okay with some volatility, or prefer a more stable approach? Knowing your goals and risk tolerance will guide you in finding a service that aligns with your needs.

2. Research and Compare

It is time to hit the internet! Look up different portfolio management services and compare their offerings. Check out their websites, read reviews, and understand their investment strategies. Pay attention to factors like fees, performance history, and the types of investments they focus on. Narrow your options to a few that match your goals and preferences.

3. Check Credentials and Experience

You would not trust your health to an unqualified doctor, right? The same goes for your money. Ensure the portfolio management services you consider are registered with the Securities and Exchange Board of India (SEBI). Look into the credentials and experience of the team managing the portfolios. Experience matters, so choose a service with a track record of success. You may find the information on the PMS provider team on their website.

4. Transparency Matters

When it comes to your money, transparency is vital. You want a portfolio management service that communicates openly about investment decisions and performance. Ask questions about how they select investments, how often they rebalance portfolios, and what kind of reporting you will receive. A transparent service will help you stay informed and build trust.

5. Track Record and Performance

Past performance does not guarantee future results. Still, analyzing a PMS provider's historical performance can provide insights into its capabilities. Look beyond short-term gains and focus on how well they have managed funds in different market conditions.

Review their performance during bull markets, bear markets, and periods of economic uncertainty. 

6. Fee Structure and Costs

Investment costs can impact your returns over time. So understanding the fee structure is crucial before committing to a PMS. Different providers may charge management fees, performance-based fees, or a combination of both.

Lower fees seem appealing, but weighing the costs against the value provided by the PMS is essential. 

A provider with slightly higher fees but a strong track record of generating returns that outpace the fees could offer better long-term value.

7. Accessibility and Account Management

In today's world of technology, how easy it is to access your investment account has a significant role in your overall experience. Imagine having a simple and easy-to-use website or mobile app that helps you keep track of how your investments are doing, lets you read reports, and keeps you up to date with what's happening in the market.

Consider how simple the PMS provider's platform is and whether it provides real-time updates. 

8. Customisation Options

Every investor has unique needs. A good PMS should offer customization options to tailor your portfolio to your preferences and objectives. 

They must offer service based on your ethical considerations, sector preferences, and tax efficiency.

9. Risk Management Practices

Managing risk is a crucial aspect of successful investing. Inquire about the PMS provider's risk management practices. How do they handle market volatility? Do they have strategies in place to protect your investments during downturns?

10. Relationship with Fund Manager

While financial decisions are often based on numbers and data, the human element should not be underestimated. 

A fund manager who takes the time to understand your goals, communicates effectively, and addresses your concerns can create a more collaborative and supportive investment experience. 

A strong working relationship can foster trust and make the process more enjoyable and rewarding.


PMS can be a suitable option for investors looking for a more active and focused approach to investing, as compared to mutual funds or other passive investment vehicles. PMS providers can offer their clients more flexibility, customization, and transparency. They also provide access to a broader range of investment opportunities. You can also invest in unlisted stocks, private equity, and real estate.

However, PMS also comes with its own set of challenges and risks. Therefore, selecting a good PMS provider is crucial.


Related Blogs: How Is Redemption of Debentures Calculated | Difference Between ROIC and ROCE | Why companies that reduce debt outshine the market | How Different Corporate FDs are From Bank FDs

  • Open your FREE Demat Account in 5 Minutes
Select State
Select City
By submitting your details, you are authorising us to call you or send promotional communication even though you may be registered under DND