Wealth Management

Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients. A wealth management advisor is a high-level professional who manages an affluent client’s wealth holistically, typically for one set fee.

Wealth management allows individuals or organisations to manage their investments effectively. Wealthy individuals need to carefully plan how they will manage their assets for the future, including who will take over the financial responsibilities when necessary. On the other hand, organisations need to handle their assets to keep their business growing effectively.

Portfolio Management Services (PMS), a service offered by the Portfolio Manager, is an investment portfolio in stocks, fixed income, debt, cash, structured products and other individual securities, managed by a professional money manager that can potentially be tailored to meet specific investment objectives.

They generally fall under four categories:

1. Active
2. Passive
3. Discretionary
4. Non-discretionary

Active Portfolio Management:- The investor who follows an active portfolio management strategy buys and sells stocks in an attempt to outperform a specific index, such as the Standard & Poor’s 500 Index or the Russell 1000 Index.

An actively managed investment fund has an individual portfolio manager, co-managers, or a team of managers all making investment decisions for the fund. The success of the fund depends on in-depth research, market forecasting,and the expertise of the management team.

Portfolio managers engaged in active investing follow market trends, shifts in the economy, changes to the political landscape, and any other factors that may affect specific companies. This data is used to time the purchase or sale of assets.

Passive Portfolio Management:- Passive portfolio management can be referred to as index fund management. This is because a passive portfolio is typically designed to parallel the returns of a particular market index or benchmark as closely as possible. For example, each stock listed on an index is weighted. That is, it represents a percentage of the index that is commensurate with its size and influence in the real world. The creator of an index portfolio will use the same weights.

The purpose of passive portfolio management is to generate a return that is the same as the chosen index. A passive strategy does not have a management team making investment decisions and can be structured as an exchange-traded fund (ETF), a mutual fund, or a unit investment trust (UIT).

Discretionary portfolio Management:- Discretionary investment management is a form of investment management in which buy and sell decisions are made by a portfolio manager or investment counsellor for the client’s account. The term “discretionary” refers to the fact that investment decisions are made at the portfolio manager’s discretion. This means that the client must have the utmost trust in the investment manager’s capabilities.

Discretionary investment management can only be offered by individuals who have extensive experience in the investment industry and advanced educational credentials, with many investment managers possessing one or more professional designations such as Chartered Financial Analyst (CFA), Chartered Alternative Investment Analyst Chartered Alternative Investment Analyst (CAIA), Chartered Market Technician (CMT) or Financial Risk Manager (FRM).

Non-discretionary portfolio Management:- The non-discretionary portfolio manager manages the funds in accordance with the directions of the client.