NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Role of Portfolio Managers
Which type of portfolio management service allows the portfolio manager to take investment decisions on behalf of the client without seeking the client's prior approval for each transaction?
Discretionary PMS lets the portfolio manager take investment decisions and execute them on the client's behalf without seeking approval for every transaction, within the terms of the agreement. Non-discretionary PMS needs client consent for each decision.
- ANon-discretionary PMS
- BAdvisory PMS
- CDiscretionary PMSCorrect
- DExecution-only service
Explanation
In discretionary PMS the manager has the authority to choose and execute investments for the client as per the agreement, independently. In non-discretionary PMS, the client's consent is needed for each decision, and advisory only gives advice.
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