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Home » Non-Discretionary Portfolio Management Explained: Unveiling Invaluable Benefits and Beyond

Non-Discretionary Portfolio Management Explained: Unveiling Invaluable Benefits and Beyond

Non discretionary portfolio management services refer to the type of portfolio management where the portfolio manager has to act as per the instructions of the client. 

This type of management means that your manager will make decisions based on the instructions of the client, i.e.; you. As the investor, you have the final say, while your portfolio manager can only make recommendations and suggestions regarding potential investments in renewable energy assets.

non discretionary portfolio management

Non Discretionary Portfolio: What Kind of Investment Is It?

This portfolio management system solely utilises the portfolio manager as an advisory medium. You retain the final decision-making authority concerning the allocation of your investments  and the specific amounts to invest in various assets. Your portfolio manager can evaluate your investments and provide guidance on optimising your returns.

They cannot invest or move funds on behalf of you. When there is a change or adjustment that makes sense for a client’s goals, managers will reach out and discuss it before making any change. 

7 Benefits of Non Discretionary Portfolio Management

  1. Passive Investing 

Non discretionary portfolio management caters to individuals seeking a hands-on approach, enabling investors to take charge of investment decisions and determine your preferred investment destinations.It enables you to make decisions about where you want to invest,consulting your portfolio manager but ultimately the decision is yours. 

Make your own trading decisions while benefiting from your portfolio manager’s advice. Your manager is bound by any instruction and cannot execute any investment move without your approval

  1. Lower Fees

The non-discretionary portfolio management account has lower fees compared to discretionary accounts, offering significant cost savings, especially for smaller investments. 

This gives you a huge benefit if you are not investing a huge amount. This type of portfolio management is ideal for  making multiple small investments in projects with higher turnover. Additionally, it may offer tax benefits, providing added advantages for investors. 

  1. Greater Understanding

Professionals with decades of experience in investing pass on their knowledge to non-discretionary clients. This enables clients to leverage their expertise and gain a deeper understanding of the markets. 

It allows them to understand the performance of the assets better and thus they can make smart investment choices. It gives them the confidence to subscribe to investment strategies that will grow their wealth. 

  1. Portfolio Manager is the Medium 

Through non discretionary portfolio management you can ensure that no one has authority over your money. This is an extremely crucial step for many investors. Your manager will still find good trading options and opportunities for you. 

However, their role is restricted to making recommendations.. You have the final approval on if they can buy or sell assets on your behalf. Here the portfolio manager acts as the medium by handling the trading of the assets. 

  1. Make the Right Invest Choice

Your choice of portfolio largely governs how successful or how much growth your investment is going to see. If you want to grow your wealth, then you need the right assets. To make the perfect portfolio that helps you invest in profitable deals, you need the expertise of the portfolio manager.

The non discretionary portfolio management process allows the manager to oversee your financial goals. After understanding where you stand and what your financial goals are, they can make relevant suggestions about where to invest.

It allows you to makе morе informed investment dеcisions. With thеir advicе, you can invеst in stocks, bonds, or other financial securities in renewable energy projеcts. Not only do such smart invеstmеnts allow you to support an еnvironmеntally awarе projеct, but you also rеap thе bеnеfits of its turnovеr. 

  1. Higher Returns 

It is quite impossible to grow your capital without investing. The goal of your portfolio manager is to maximise the returns on your investment. You have a structured framework for analysis. This helps you to select the best assets that project to offer the higher returns. Your portfolio manager will help you to earn higher returns, even if you have limited funds. So, you can also invest in such a portfolio even with limited or small amounts of funds. 

  1. Helps Manage Liquidity 

Non discretionary portfolio management encourages investors to structure their investments. A portfolio manager makes investment decisions so the investors can sell some of their funds in an emergency. These professionals ensure investors can convert assets, including stocks and bonds, into cash without affecting the market price.

But, with thе right strategies and bеnеfits, thеrе arе a few risks that come with this typе of portfolio. Knowing thе hallmarks of thosе risks can hеlp you to minimisе thе risks associatеd with this portfolio managеmеnt typе.

What is the Risk Tolerance for Non-Discretionary Portfolios?

There is a way to enhance the risk tolerance of your portfolio. The answer is two words- portfolio diversification. 

You can invest in multiple projects so that you can gain profits if others are depleting the market. Since you choose non-discretionary portfolio management, you need to be aware of the potential risks and how to assess them so you can take relevant measures. 

Your portfolio manager will “warn” you of the potential market risks before you finalise your investment. It is up to you if you take their advice or not. They will tell you which stocks are risky and which ones might bring in better turnover. 

Their suggestions are also based on your age and income levels. Most people opt for non-discretionary portfolio management because of the amount of time they are unable to commit to managing the portfolio.

Grow Your Wealth with a Strategy that Rebalances Your Portfolio 

The key is to develop a strategy that aligns with your financial goals and risk tolerance. Your portfolio manager can suggest some strategies, but the final call is yours. 

Another thing you must remember is that, with time, the performance of your investments will shift. On some days, there will be huge fluctuations. Depending on that, you must “rebalance” your portfolio to stay on track. Your portfolio manager will consult with you before making trades. 

Track Your Investment 

Last but not least, actively monitor your investment. Just because you have еntrustеd your portfolio managеr with your account doеs not mеan you have to be oblivious to your invеstmеnts. With non-discrеtionary portfolio managеmеnt, your managеr will еnsurе that your portfolio is on track to mееt your goals.

They will keep you updated with the constant market news and fluctuations, so your manager can best respond to that. Not just that, they will also adjust your investments so you can still maximise your profits. 

FAQs: Non-Discretionary Portfolio Management Explained: 4 Benefits You Can’t Ignore and More

Who should consider non-discretionary portfolio management?

Seasoned investors can choose non-discretionary portfolios. If you are someone who has a significant background and experience in investing and you understand how the market and its volatility work, then choose this. For first-time investors, it is best to go for discretionary portfolio management. 

How can I maintain more control and transparency over my renewable energy investment decisions?

Maintain control and transparency over renewable energy assets by conducting research. Diversify your portfolio and engage with reputable investors with the help of portfolio managers, who will give you curated advice that meets your personal finance goals. 

Can NRIs invest in PMS?

An investor who is an NRI can avail of the PMS through the NRE or NRO account. Such investors can diversify their portfolios across multiple markets without being present in the country. 

Why invest in Sustvest’s renewable energy projects?

There are dual benefits to investing through Sustvest. Firstly, you get to invest in renewable energy projects at zero up-front cost and make a positive environmental impact. Secondly, it in turn generates a monthly instalment profit based on your ownership share. You have to sign a lease or power purchase agreement (PPA) to receive your monthly payments. 

What are the risks of portfolio management services?

You might face market fluctuations, overreliance on managers, and potential conflicts of interest, which could affect returns and financial goals.


Non discretionary portfolio management offers an excellent opportunity to assert authority over your financial matters and acquire a more profound comprehension of the market. Through its myriad advantages, you can nurture a robust investment portfolio, empowering you to make more substantial and audacious investment choices down the road.If you are a novice and still need guidance to get a headstart in this field, entrust Sustvest to execute your investment strategies in real time. All you need to do is curate the strategy and have a plan, and our portfolio managers will make the move accordingly.