Whats your business model like? Not many people understand how portfolio management system businesses make money?
Radhika: Many of your readers will be familiar with mutual funds. In India investment management services are provided by mutual funds as well as portfolio management services. PMS managers manage and operate a portfolio of stocks for a client/clients to deliver them better returns. In turn, we charge them a fixed fee. Anant: Our primary source of earnings is fee-based income we charge our clients. We have other revenue streams in wealth management where we, instead of directly investing clients’ money, advise them on how to allocate their capital across different asset classes outside of Forefront products and we get paid for that advice. How does PMS work? Do you collect money from your clients and invest on their behalf? What kind of returns do you offer to your investors? Anant: The way it works is our clients open a bank account and a demat account in their name. Forefront has a power of attorney over that demat account based on which we buy and sell shares for our clients. Though
