Mandate
Understand the investment strategy, mandate and responsibilities described in the agreement.
PORTFOLIO MANAGEMENT SERVICES
Portfolio management, explained clearly
Portfolio Management Services (PMS) is a professional investment management service in which a portfolio manager manages or administers a client's portfolio of securities according to an agreed investment strategy.
Where Prospera FinTech fits:
Prospera FinTech facilitates access to PMS through relevant PMS providers.
Prospera FinTech is not the PMS provider or fund manager.
PMS
Professional portfolio management
You
Prospera FinTech
PMS Provider
Portfolio & Reporting
A facilitated journey — with clear responsibilities
WHAT PMS MEANS
A portfolio managed under an agreed strategy
PMS is structured differently from pooled investment products. The portfolio is managed for an individual client according to an agreed mandate, with the portfolio manager carrying out the management responsibilities within that mandate.
What happens inside a PMS arrangement?
A portfolio manager manages or administers a client's portfolio of securities according to an agreed investment strategy. PMS can be discretionary or non-discretionary, depending on the arrangement.
In a discretionary arrangement, the portfolio manager makes investment decisions within the agreed mandate. In a non-discretionary arrangement, investment decisions are made based on the client's instructions.
PMS investments remain market-linked. The value of the portfolio can rise or fall, and returns are not guaranteed.
HOW PMS WORKS
From your requirements to portfolio reporting
The roles are deliberately separated so that it is clear who facilitates the relationship and who provides the PMS service
1
You
Share your requirements, investment objectives and relevant information needed for the PMS process.
2
Prospera FinTech
Prospera FinTech facilitates the connection and coordinates the next steps with the relevant PMS provider.
3
PMS Provider
The PMS provider handles the PMS service under the applicable agreement, mandate and regulatory framework.
4
Portfolio & Reporting
Portfolio activity and reporting are provided through the applicable PMS arrangement and provider.
TWO PMS STRUCTURES
Discretionary or non-discretionary?
The key difference is how investment decisions are made within the agreed PMS mandate
Investment decisions within the agreed mandate
In discretionary PMS, the portfolio manager independently makes investment decisions for the client within the agreed mandate.
Investment decisions based on client instructions
In non-discretionary PMS, investment decisions are made based on the client's instructions within the agreed arrangement.
PMS VS MUTUAL FUNDS
Two different investment structures
Understanding the structural difference helps explain why PMS works differently from a mutual fund
Portfolio Management Services
- Managed for an individual client under an agreed mandate.
- The client generally has direct ownership of securities held in the portfolio.
- Available in discretionary and non-discretionary forms.
- Fees and service terms depend on the PMS provider and arrangement.
Mutual Funds
- Money from multiple investors is pooled into a scheme.
- Investors receive units representing their interest in the fund.
- The scheme is managed according to its stated investment objective.
- Costs, terms and liquidity depend on the specific scheme.
PMS and mutual funds are different structures. The applicable terms, risks, costs and regulatory requirements should be reviewed for the specific service or product.
BEFORE YOU PROCEED
Understand the arrangement, not just the label
PMS involves a formal relationship with a portfolio manager. These are some of the practical areas to understand before entering into the arrangement.
Risk
Portfolio values can fluctuate because of market movements, security selection and concentration.
Fees
Fees depend on the portfolio manager, service structure and agreed terms.
Liquidity
Understand applicable liquidity terms, restrictions and conditions before investing.
Performance context
Review performance over an appropriate period alongside risk, strategy, drawdowns, composition and fees.
Provider
Understand who the PMS provider is and the role it performs under the PMS arrangement.
WHO DOES WHAT?
Clear roles from the start
This distinction is important: Prospera FinTech facilitates access to PMS; the relevant PMS provider provides the PMS service.
Prospera FinTech
Prospera FinTech facilitates PMS through relevant PMS providers and coordinates the relationship and process.
Prospera FinTech does not itself provide the PMS service, manage client portfolios or act as the fund manager.
Relevant PMS Provider
The PMS provider provides the portfolio management service under the applicable agreement, mandate and regulatory framework.
The provider is responsible for the portfolio-management responsibilities applicable to the selected PMS structure.
CONNECT WITH PROSPERA FINTECH
Want to understand how PMS could work?
Speak with Prospera FinTech to understand the PMS process and the relevant provider relationship before taking the next step
Talk to Prospera FinTech
QUESTIONS PEOPLE ASK
Portfolio Management Services FAQs
Straightforward answers to the questions that commonly arise when exploring PMS
What is Portfolio Management Services (PMS)?
Portfolio Management Services (PMS) is a professional investment management service in which a portfolio manager manages or administers a client's portfolio of securities according to an agreed investment strategy.
What is the difference between discretionary and non-discretionary PMS?
In discretionary PMS, the portfolio manager makes investment decisions for the client within the agreed mandate. In non-discretionary PMS, investment decisions are made based on the client's instructions.
What is the minimum investment amount for PMS?
The minimum investment amount for Portfolio Management Services (PMS) in India is ₹50 lakh, as prescribed under the applicable SEBI framework. Individual PMS providers may prescribe higher minimum amounts or additional requirements for specific offerings.
Who can invest in PMS?
PMS is generally intended for investors who meet the applicable regulatory and eligibility requirements and have the financial capacity and risk tolerance appropriate for the service. The exact requirements should be confirmed with the relevant PMS provider.
How is PMS different from a mutual fund?
PMS manages a portfolio for an individual client under an agreed mandate, and the client generally has direct ownership of the securities held in the portfolio. Mutual funds pool money from multiple investors and issue units representing their interest in the scheme.
What are the risks of PMS?
PMS investments are market-linked and can involve significant investment risk. Portfolio performance can be affected by market movements, security selection, concentration, liquidity and the investment strategy followed by the portfolio manager. PMS does not provide guaranteed returns.
How are PMS fees charged?
PMS fees depend on the portfolio manager, service structure and agreed terms. Depending on the arrangement, fees may include fixed management fees, performance-linked fees or other applicable charges. The applicable fee structure should be reviewed carefully before investing.
How can I evaluate the performance of a PMS?
PMS performance should be evaluated over an appropriate period and in the context of the strategy's objectives, risk and benchmark. Returns should be considered alongside volatility, drawdowns, portfolio composition, investment approach and applicable fees rather than judging performance only on short-term returns.
