NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager
Which of the following best describes a non-discretionary portfolio management service?
In a non-discretionary portfolio management service, the manager takes investment decisions only after obtaining the client's prior approval for each transaction. The client retains final decision authority, unlike in discretionary PMS where the manager exercises independent discretion over the client's funds.
- AThe portfolio manager invests without needing the client's consent for each decision
- BThe portfolio manager takes investment decisions only with the client's prior approval for each transactionCorrect
- CThe portfolio manager invests only in debt instruments
- DThe portfolio manager's fee is always fully fixed regardless of performance
Explanation
In non-discretionary PMS the manager advises, and each investment decision is executed only after the client gives prior consent. Acting without consent describes discretionary PMS. The asset class and fee structure do not define the category.
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