Portfolio management services (PMS)

A portfolio manager registered with SEBI invests on your behalf. Unlike a mutual fund, you own the shares directly, so you see every holding and every trade, and the portfolio can be more concentrated.

Discretionary PMS: the manager decides what to buy and sell. Non-discretionary: the manager advises and acts with your approval. Most investors choose discretionary.

• Investors who can commit at least ₹50 lakh without needing it for five years or more.
• Those who already have a core of mutual funds and want a concentrated strategy alongside.
• People comfortable with returns that can differ sharply from the index, in both directions.

Fees vary by manager: a fixed fee (often 1.5–2.5% a year), a profit share above a hurdle, or a mix. Performance fees can only be charged on a high-water-mark basis, so you don't pay twice for the same gains. Brokerage, custody and fund-accounting charges come on top.

Costs compound. On ₹50 lakh over 10 years at an assumed 13% a year before fees, a 2.5% yearly fee leaves about ₹19.6 lakh less than a 1% fee would. A PMS has to earn that back to be worth it.

SEBI lets you invest with a portfolio manager directly, without a distributor. Through us, the manager pays us a distribution fee, and we tell you how much before you invest.

Because the shares are yours, every sale inside the PMS is taxed in your hands: 20% on gains within 12 months, 12.5% above ₹1.25 lakh a year after that, plus dividends at your slab. High-turnover strategies therefore cost more in tax than a mutual fund, where trades inside the fund are not taxed until you sell units.

• Concentration: 15–30 stocks can fall much more than a diversified fund.
• Manager risk: results depend on one team; a change of manager can change the strategy.
• Not guaranteed: PMS returns can be negative, and past returns may not repeat.

We compare strategies on their reported returns against a standard benchmark (SEBI requires managers to report time-weighted returns against one), their worst periods, fees after tax and how much they overlap with what you already own. We read the disclosure document with you before you sign.

1. Your goals and current portfolioSo the PMS adds something your mutual funds don't.
2. A short list of strategiesCompared on record, risk, fees and overlap.
3. PaperworkAgreement, demat and bank linking with the portfolio manager.
4. MonitoringQuarterly reports read with you, and a yearly review.