A Portfolio Management Service (PMS) is a professional service where investment portfolios are managed by a portfolio manager on behalf of a client. The portfolio manager makes all investment decisions, such as strategy selection, asset allocation, and security selection, based on the client's investment goals, risk tolerance, and other relevant factors.

There are three types of portfolio management services:

• Discretionary: Investors don't have to make any financial decisions. All financial decisions and actions are taken by the portfolio manager.
• Non-discretionary: The portfolio manager suggests possible courses of action and works according to the directions given by the client.
• Advisory: Portfolio managers advise investors and help them make informed investment decisions. The investor executes the trade.

In India, Portfolio Management Services (PMS) are typically offered to high net worth individuals, corporate bodies, institutional investors, and non-resident Indians (NRIs) due to the high minimum investment requirement.

The Securities and Exchange Board of India (SEBI), the regulatory body for securities markets in India, has set the minimum investment limit for PMS at INR 50 lakhs.

Here are the steps after you have chosen to invest in the Wright PMS. Please note that our expert onboarding will coordinate and help you in finishing these steps with minimum hassle.

• KYC Completion: Complete your Know Your Customer (KYC) formalities, which will involve providing proof of identity and address.
• Agreement Signing: You'll need to sign an agreement with your chosen PMS provider detailing the terms and conditions, including the fee structure, investment strategy, and any other relevant factors.
• Opening a Demat Account: You'll need to open a separate demat account specifically for your PMS investments. This account is needed as, by regulation, your securities can only be held in your account, not by the portfolio manager.
• Signing a Power-of-Attorney (POA) Agreement: A POA agreement will give your PMS fund manager the ability to buy and sell stocks on your behalf.
• Funding Your Investment: Finally, you'll need to fund your investment. The minimum investment for PMS in India is Rs. 50 lakh, as mandated by the SEBI.
• Regularly Monitoring Your Investment: After investing, you'll need to regularly monitor your portfolio's performance and communicate with your portfolio manager as necessary.

The PMS industry in India is slowly moving towards digital processes for account opening, though physical signatures on large forms are still required for now. It's important to remember that while the process might seem complex, each step is designed to protect your investments and ensure transparency.

Portfolio Management Services (PMS) offer several potential benefits, especially for high net worth individuals (HNIs) who can meet the minimum investment requirements. Here are some key benefits:

1. Customized Investment Solutions: Unlike mutual funds, which follow a one-size-fits-all approach, PMS can be tailored to the individual needs and risk tolerance of each investor. Portfolio managers can customize the portfolio based on the investor's objectives, financial situation, and specific preferences.
2. Active Management: PMS accounts are actively managed by professional portfolio managers who have the knowledge and experience to make informed investment decisions. This could potentially lead to better returns compared to passive investment strategies.
3. Direct Ownership: With PMS, investors directly own the securities in their portfolios. This is different from mutual funds, where investors own units of the fund but not the underlying securities.
4. Transparency: PMS offers a high level of transparency. Investors receive regular reports that detail the performance of their portfolio, the specific securities held, and any changes made to the portfolio.
5. Access to Exclusive Opportunities: Since PMS caters to HNIs, it often provides access to investment opportunities that may not be available to average retail investors, including pre-IPO shares, private equity, and international markets.
6. Dedicated Portfolio Manager: PMS clients often have direct access to their portfolio manager, allowing them to discuss their portfolio, understand investment decisions, and get personalized advice.
7. Tax Efficiency: In PMS, each buy and sell transaction is specific to an investor, providing the potential for more tax-efficient management of capital gains.

The tax liability of a PMS investor would remain the same as if the investor is accessing the capital market directly. However, the investor should consult his tax advisor for the same. The Portfolio Manager ideally provides audited statement of accounts at the end of the financial year to aid the investor in assessing his/ her tax liabilities.