What is a Portfolio Management Service?

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  • Written By: Jim B.
  • Edited By: M. C. Hughes
  • Last Modified Date: 07 March 2020
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A portfolio management service is a professional financial institution devoted to helping individual investors decide how to comprise their investment portfolios. Such a service may help the investors decide how much of their portfolios should be devoted to certain types of securities or may even help them choose among individual securities. Investors may choose to employ a portfolio management service to help them deal with the great volume of investment opportunities available to them. The service focuses on the investment goals and needs of the individual and also takes care to see that a portfolio is not at excessive financial risk.

Investors of all kinds generally hold out the hope that their portfolios, which represent the entirety of assets which they hold, will help them reach all of their financial goals, both in the present and the future. Since many investors lack the experience and skill to deal with the vast array of investment possibilities open to them and to understand the intricacies of the various financial markets, they seek out financial advice from professionals. An investor will often hire a portfolio management service to help him reach all of his financial goals.


Many investors who hire a portfolio management service may already have a stable of investments that they have built up over time. These investments may include the typical market investments like stocks and bonds, but they also may include personal possessions of value, like a family home or a piece of art that might grow in value. In cases such as this, a portfolio manager might assess the entire portfolio and suggest possible improvements.

Some occasions may call for a portfolio management service to help an investor build a portfolio from the ground up. The investor ideally will relay the goals he has for his investment capital, and the portfolio manager will help him choose the securities which are best-suited to achieving those goals. For example, an investor looking to save for retirement would likely be steered toward safer investments like bonds, while one looking for rapid growth might be instructed to build a portfolio heavy on stocks.

The standard portfolio management service also is skilled at assessing the risk attached to potential investments and, in conjunction, analyzing the risk incurred by the portfolio as a whole. By diversifying the portfolio through a series of securities in various investment spectrums, the portfolio managers can isolate potentially risky securities and balance them out with a group of solid ones. Acceptable risk levels for a portfolio also depend upon the future plans the investor has for his investment capital.



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