Portfolio Management Services are offered by SEBI-registered portfolio managers. Unlike a mutual fund, the securities are held directly in your demat account, and the portfolio can be more concentrated.
SEBI currently requires a minimum investment of ₹50 lakh for PMS. Services may be discretionary (the manager decides) or non-discretionary (you approve decisions). Fees may include a fixed management fee and a performance-linked fee.
Where it may fit
- Higher-net-worth investors seeking a focused equity strategy
- Investors who value direct ownership and portfolio transparency
- A complement to — not a replacement for — a diversified core
Things to consider
- High minimum investment and concentration risk
- Fee structure, including performance fees and hurdle rates
- Tax is calculated on each transaction in your account
- The manager's process, consistency and risk controls
Minimum investment ₹50 lakh. PMS is suitable only for investors who meet this threshold and have adequate overall wealth, a long horizon and tolerance for higher volatility.
Types of PMS
Discretionary
The portfolio manager makes buy and sell decisions on your behalf, within the agreed strategy. This is the most common type.
Non-discretionary
The manager recommends; you approve each transaction before it is executed.
Understanding PMS fees
- Fixed fee
- A percentage of assets charged every year, regardless of performance.
- Performance fee
- A share of returns above a set level, usually in addition to a lower fixed fee.
- Hurdle rate
- The return the portfolio must exceed before a performance fee applies.
- High watermark
- Ensures performance fees are charged only on new gains, not on recovering earlier losses.
- Exit load
- A charge for withdrawing within a set period — check the agreement.
Questions to ask any portfolio manager
- How has the strategy performed across full market cycles, including falls?
- How concentrated is the portfolio, and what are the risk limits?
- What are all the fees, and how is performance reported net of fees?
- How will tax be handled on transactions in my account?
- What is the process for adding or withdrawing money?
Questions people ask
Is PMS better than mutual funds?
Not automatically. PMS offers concentration and direct ownership, but often at higher cost and with higher volatility. Many investors are well served by mutual funds alone.
Where can I check a PMS provider's performance?
Portfolio managers report performance in a standard format to SEBI, and comparable data is published on industry platforms. We help you read these figures in context.
Can I withdraw partially?
Usually yes, subject to the agreement and any exit load, as long as the portfolio stays above the required minimum.
The information on this page is educational and general in nature. It is not a recommendation to buy or sell any product. Investments are subject to market risks; read all scheme-related and offer documents carefully. Suitability depends on your individual circumstances.
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