Moize Goulamhoussen is a Senior Portfolio Manager and Wealth Advisor with over 20 years of experience of the banking and finance sector. This article will look at portfolio management services and the advantages of entrusting investment decisions to seasoned experts.
A portfolio management service (PMS) is a financial service through which professional portfolio managers manage the asset portfolios of investors. PMS firms analyse, monitor and make investment choices on behalf of clients with the goal of helping them to achieve specific investment objectives while simultaneously managing risk in accordance with the investor’s preferences. Portfolio managers create customised investment portfolios for each client based on their time horizon, investment goals, risk tolerance and other factors. The portfolio may be made up of a mixture of stocks, mutual funds, exchange traded funds, bonds and other types of investment.
Portfolio managers leverage their knowledge and expertise to make informed investment choices, adjusting portfolios as and when required to achieve the investor’s objectives. They also produce periodic reports to clients, helping them to track the performance of their investment portfolio.
Working with a PMS firm offers several key benefits from the investor’s point of view, providing the benefit of their expertise and knowledge of the financial markets, which can ultimately help them to achieve their financial goals faster and more efficiently. One of the principal benefits of enlisting the help of a portfolio manager lies in their ability to provide customised portfolio design, working with the investor to determine their unique needs and goals to create an effective investment strategy. This can help investors achieve higher returns while simultaneously managing risk, ensuring that the asset portfolio is optimised for the investor’s unique situation.
Another key advantage of PMS firms is their ability to provide investors with access to a broader range of investment opportunities, including a wide range of stocks, bonds, exchange-traded funds, mutual funds, private equity, real estate and other forms of alternative investment. By enabling clients to access a wider range of investment opportunities, portfolio managers can help investors to diversify their asset portfolio, potentially increasing returns. In addition, by investing in a broad range of investment types and asset classes, investors spread their risk, reducing the impact of any single investment on their overall portfolio.
Although many investors prefer to take a hands-on approach, managing their investments themselves, to be successful requires an in-depth understanding of the markets. To protect and generate wealth also requires a solid grasp of each element of portfolio building and maintenance, for example, rebalancing, diversification and asset allocation. Typically catering for high-net-worth individuals, PMS firms provide access to investment vehicles retail investors may struggle to access alone, as well as offering the benefit of their considerable experience and expertise. In return for this support, PMS firms generally receive either a fixed fee, a performance fee or a combination of both.