Types of Portfolio Management Services
There are several types of portfolio management services that financial institutions and investment firms offer:
Discretionary portfolio management: In this type of service, the portfolio manager has the discretion to make investment decisions on behalf of the client without seeking their approval.
Non-discretionary portfolio management: In this type of service, the portfolio manager provides investment recommendations to the client, who then decides whether to implement them or not.
Advisory portfolio management: This is a hybrid of the above two types of services, where the portfolio manager provides investment recommendations to the client, but the final decision rests with the client.
Passive portfolio management: This type of service involves building a portfolio that tracks a particular market index, such as the S&P 500. The portfolio manager does not actively select individual securities, but rather holds a basket of securities that approximates the performance of the benchmark index.
Active portfolio management: This type of service involves the portfolio manager actively selecting individual securities to be included in the portfolio, with the aim of outperforming a benchmark index.
Hybrid portfolio management: This type of service involves a combination of active and passive management strategies, with the portfolio manager using a mix of both to build the portfolio.
