Portfolio Management Services in India – Complete Guide

By
Hemant Beniwal
118

What are Portfolio Management Services In India?

Portfolio Management Services account is an investment portfolio in Stocks, Debt, and fixed income products managed by a professional money manager, that can potentially be tailored to meet specific investment objectives. When you invest in PMS, you own individual securities unlike a mutual fund investor, who owns units of the entire fund. You have the freedom and flexibility to tailor your portfolio to address personal preferences and financial goals. Although portfolio managers may oversee hundreds of portfolios, your account may be unique. As per SEBI guidelines, only those entities who are registered with SEBI for providing PMS services can offer PMS to clients. There is no separate certification required for selling any PMS product. So this is a case where mis-selling can happen. As per the SEBI guidelines, the minimum investment required to open a PMS account is Rs. 5 Lacs. However, different providers have different minimum balance requirements for different products. For Eg Birla, AMC PMS is having min amount requirement of Rs. 50 lacs for a product. Similarly, HSBC AMC is having a minimum requirement of 50 lacs for their PMS and Reliance is having min requirement of Rs. 1 Crore. In India, Portfolio Management Services are also provided by equity broking firms & wealth management services.

Update: From 2020 minimum investment in PMS will be increased to Rs 50 Lakh.

Portfolio Management Services in India - Complete Guide

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Types of Portfolio Management Services 

1. Discretionary PMS India 

Where the investment is at the discretion of the fund manager & the client has no intervention in the investment process.

2. Non-Discretionary PMS

Under this service, the portfolio manager only suggests investment ideas. The choice, as well as the timings of the investment decisions, rest solely with the investor. However, the execution of the trade is done by the portfolio manager.

The client may give a negative list of stocks in a discretionary PMS at the time of opening his account and the Fund Manager would ensure that those stocks are not bought in his portfolio. The majority of PMS providers in India offer Discretionary Services.

How can investors invest in Portfolio Management Services?

There are two ways in which an investor can invest in Portfolio Management Services:

1. Through Cheque payment

2. Through transferring existing shares held by the customer to the PMS account. The Value of the portfolio transferred should be above the minimum investment criteria.

Besides this customer will need to sign a few documents like– PMS agreement with the provider, Power of Attorney agreement, New Demat account opening format (even if the investor has a Demat account he is required to open a new one), and documents like PAN, address proof and Identity proofs are mandatory. NRIs can invest in a PMS. The NRI needs to open a PIS account for investing in PMS. The documentation required for an NRI, however, is different from a resident Indian. A checklist of documents is provided by each PMS provider.

What are Portfolio Management Services In India

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Working of a Portfolio Management Services (PMS)

Each PMS account is unique and the valuation and portfolio of each account may differ from one another. There is no NAV for a PMS scheme; however, the customer will get the valuation of his portfolio on a daily basis from the PMS provider. Each PMS account is unique from one another. Every PMS scheme has a model portfolio and all the investments for a particular investor are done in the Portfolio Management Services on the basis of the model portfolio of the scheme. However, the portfolio may differ from investor to investor. This is because of:

Portfolio Management Services (PMS) in India - Complete Guide Click to Tweet
  1. Entry of investors at different times.
  2. The difference in the number of investments by the investors
  3. Redemptions/additional purchases done by the investor
  4. Market scenario – Eg If the model portfolio has an investment in Infosys, and the current view of the Fund Manager on Infosys is “HOLD”(and not “BUY”), a new investor may not have Infosys in his portfolio.

Under PMS schemes the fund manager interaction also takes place. The frequency depends on the size of the client portfolio and the Portfolio Management Services provider. The bigger the portfolio, the frequency of interaction is more. Generally, the PMS provider arranges for fund manager interaction on a quarterly/half-yearly basis.

Portfolio Management Services Charges

A PMS charges the following fees. The charges are decided at the time of investment and are vetted by the investor.

Entry Load – PMS schemes India may have an entry load of 3%. It is charged at the time of buying the PMS only.

Management Charges – Every Portfolio Management Services scheme charges Fund Management charges. Fund Management Charges may vary from 1% to 3% depending upon the PMS provider. It is charged on a quarterly basis to the PMS account.

portfolio management services in india

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Profit-Sharing – Some PMS schemes also have profit-sharing arrangements (in addition to the fixed fees), wherein the provider charges a certain amount of fees/profit over the stipulated return generated in the fund. For Eg PMS X has fixed charges of 2% plus a charge of 20% of fees for return generated above 15% in the year. In this case, if the return generated in the year by the scheme is 25%, the fees charged by the PMS will be 2% + {(25%-15%)*20%}.

The Fees charged are different for every Portfolio Management Services provider and for every scheme. It is advisable for the investor to check the charges of the scheme.

Apart from the charges mentioned above, the PMS also charges the investors on the following counts as all the investments are done in the name of the investor:

  • Custodian Fee
  • Demat Account opening charges
  • Audit charges
  • Transaction brokerage

The table below lists the top PMSes in India

PMS Company

 

 Fixed Fee (per annum)

 

 Performance Fee Brokerage and Exit Load
Motilal Oswal 2%- 2.25% – 0.3% brokerage per transaction; 1% – 2% load
ASK 2.5% 1.5% plus 20% above 10% profits –
Alchemy PMS 2%-2.5% – –
White Oak PMS Upto 10 Cr. 2.5%

Above 10 Cr. 2%

 _ –
 

Abakkus PMS

 

 2.50% – Less then 1 Year 1.5%

After 1 Year -0%

 

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Taxation for Portfolio Management Services (PMS)

Any income from the Portfolio Management Services account is a business income. Unlike MF, PMS is not required to remain 65%+ invested in equity to get equity taxation benefit. Each Portfolio Management Services account is in the name of an additional investor and so the tax treatment is done on an individual investor level.

Profit on the same can be considered as business income. (i.e slabs). Profit can be considered as Capital gain. [STCG(15%) or LTCG(10%)]. It depends on the client’s Chartered Accountant or the assessing officer how he treats this Income. The PMS provider sends an audited statement at the end of the FY giving details of STCG and LTCG, it is on the client and his CA to decide to treat it as capital gain or business income.

How is PMS different from a Mutual Fund?

Both PMS and Mutual Funds are types of managed Funds. The difference to the investor in a Portfolio Management Services over a Mutual Fund is:

  • Concentrated Portfolio.
  • A portfolio can be tailored to suit the needs of investors.
  • Investors directly own the stocks, rather than the fund owning the stocks.
  • Difference in taxation

If you have any questions regarding PMS or any other investment product, just add them in the comment section.

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118 COMMENTS

  1. Hi,

    Good one.

    But there has been a long debate going on the charges of PMS which is on a higher side.Also, the performance of most of the PMS Scheme has been very dismal.Even the best of schemes have not been able to meet the target.

    Then its become really difficult to invest in a scheme which is dependent on the fund manager.Recently also change in SEBI stance towards PMS service providers has prove the fact that “All is not Well”.

    Look at Kotak PMS.It has been a big disaster for investors.

    What are your views .

  2. God Article. Informative.
    But there was no info about the possible mis-selling and traps. Believe me, this is more dangerous than insurance schemes, The reason is that people are not aware about this fully. And of course, it’s complex.

    The most dangerous part is the profit sharing part. Even if the final output is in loss, the initial input will be considered as the benchmark.
    Ex. You invested 20 Lakhs.
    After one year it became 25 lakhs.
    So 25% profit. Agreed.

    Now next year this 25 percent becomes 21 lakhs.
    So around 16% loss. But you will be surprised to hear from them that you have got 5% profit.
    This is because always they benchmark on the initial amount, that is 20 Lakhs.
    And they will happily execute the profit sharing.

    Second trap here is the actions they do in order to get the brokerage fees. I have seen that most in PMS, there will be too much buying and selling of shares on behalf of you. Why? Since they themselves are the brokers, they will get a good amount of money as brokerage.

    Again, there are no clear and transparent rules regarding PMS in India. So charges are not standard. And there are lot of charges. And there are asterisks and hashes.

    For the past few years, most PMS’s were disasters.

    Regards,
    Shinoj Jose

    • Hi Shinoj,

      Fully agree with you – mis-selling to HNIs. More Gain to PMS providers.

      This is just information on PMS rather than any recommendation. Just to share charges, taxation & working.

    • Hi Shinoj,

      PMS no longer works by the model you claim. SEBI has introduced the high watermark concept which all PMS providers adhere to now.

      When one opts for a performance-based fee, the profits are reckoned on the basis of “high watermarking”. That is, one pays the fee only on the positive returns on his portfolio.
      For instance, if one invests Rs. 100 in a PMS and its value appreciates to Rs. 150 at the end of the year, he pays a fee on the profit of Rs. 50. Subsequently, a fee will be levied only on gains over and above the Rs. 150 mark. If the value of his portfolio slumps to Rs. 70, and climbs back to Rs. 110, the Rs. 40 you earn will not be reckoned as profit. You will again be charged a fee only if the value of your portfolio recovers to over Rs. 150, the previous “high watermark.”

      • Tell me one place where I can compare and evaluate performance of various PMS offered. I will agree with you.

    • Hi… Thanks for your review. Please suggest me whether to go with PMS or not. I am going to invest in the PMS of Oswal.. So please suggest…

  3. PMS schemes are worse than Ponzi Schemes (for investors, I mean. Not for the fund management companies and brokers).
    It has conflict of interest written all over it.
    Diversified Mutual funds, Index funds, ETF are the way to go for equity investments. (And ULIP if you find a low cost one and you don’t want or can’t have any involvement in investments).
    All this talk of “HNI need more control/concentration/active management” is B.S. peddled by PMS sellers.

    • Well said Sumant,

      This article is actually written by Madhupam & in the end he left some space for my views “HEMANT’s View on Investing through PMS schemes”. He was sure that I am not going to write in favor of PMS.

      Due to time constraint I thought I will share my views in comments rather than adding them in article. But you & Shinoj even saved me from that.

    • Hi Binu,

      No idea about kochin but are you serious about taking PMS after reading comments from these readers.

          • Investment returns don’t come with any guarantee even in mutual funds, debt funds or ulips. FMPs come with some security but in reality charge a high fee not to mention the very high distribution fee. Why pick PMS for having lower return in a particular year especially when no comparison against market benchmarks is
            provided here. Also in my knowledge, PMS on average charge lesser from fixed fee than equity MFs and performance fee kicks in only after a threshold return and high watermarks. Your comments against PMS therefore seems out of place to me.

  5. Well written. I am yet to see any PMS creating significant alpha. If all they are doing is passive tracking against benchmark and claim glory then investors could do better than them by taking the VIP (and not SIP!!) approach – acronym for Value Averaging Investment Plan. This is a new kid on the block akin to dollar / rupee averaging just that it is not COST but VALUE averaging. Investors are in controls of their decisions and also Profits!!

  8. Hi,

    Hope everyone is doing fine. I am actually new to this website, and was glad to read well-rounded views on PMS. I live in New York, and thus has been little away from this industry in India, but seems like PMS is not much different than Hedge funds in USA.
    One question I had, was about structured products/participatory notes/equity-linked notes/principal protected notes. Does anyone here have any idea, that as an issuer/dealer if I would like to offer those kind of products to domestic (Indian) investors, what kind of license I would require? Do I need to get registered as PMS with SEBI?

    Any ideas/references would be appreciated.

    Karan

  10. I invest equity and MF my self. I am new to the PMS concept. Not sure if it is good bet. Recently came across with Karvy PMS. There I learned SEBI has created guidelines and all PMS company has to follow.

    Does anybody has actually used PMS from any company? Would be good if you can share your experience.

    • Hi Prakash,

      PMS schemes have not been able to deliver their objective primarily because lot of bet is taken on short term views of the market and even the wrong stocks are chosen.

      Yes, now SEBI has also created many guidelines like minimum investment amount and no pool basis investment which all the registered PMS has to follow.

      • Thanks Vikas, do you have performance data of PMSs to share to substantiate your claim. Most PMS that I have seen, and admittedly I have seen only a few, have shown stellar returns. Would be happy to see the data to the contrary.

    • PMS is always a disaster. Have you heard of anyone saying that PMS made him richer. I never. In fact I lost big sum due to mismanagement of PMS, along with several other clients. No one on earth can make money for you except yourself. PMS is a gambling, they play with your money. Better invest only in Fixed Deposits you will not be at dismay at the end. This is my sincere advice. Good Luck!

      V.H. DAS

      • Hey u vk das …. Plz stop ur foolish advice !!!! Inflation will eat ur fixed deposit over time and will give u negative returns …. Even u can lose money in a bank , leave aside stocks ….. invest money into a saving account of a cooperative bank and see what happened !!!! A wise advice invest money equally into all assets like stocks , gold bonds , mutual funds , liquid bonds or last option saving accounts ….

  11. As mentioned in article “As per the SEBI guidelines, the minimum investment required to open a PMS account is Rs. 5 Lacs. ” how many of us have the investment amount of Rs 5 lacs at one go?

  12. Hi,
    A very good article to read.
    I have a question and I hope someone can help me here.

    I am a financial consultant and intend to take up asset management. Now I am planning to open up a proprietorship company and will ask my client to deposit their monies in the account.

    Now,
    what are the legalities that I need to take care of?
    how about taxation? will there be double taxation and if so how can I avoid it?
    Is it possible to avoid double taxation if all my clients sign participatory notes and becomes participant in the said proprietorship company?

    Thanks for the help, hope to hear from a learned one soon.

  13. Hi there, i want to know if i invest in PMS with 2 other joint holders, will the tax implication be on only the first holder or all of the three holders?

  14. sir,
    can u tell which are the top ten portfolio management service provide in india., and gradings of those top ten companies

  15. I think if one is ready to take so much of risk as he is opting for PMS then i would suggest him to go for direct investing in equities and any other option on SIP basis rather than at one go investment which is at high risk. So go for a self portfolio management instead of any PMS provider as if one is ready to take risk of stock market then he must be ready to learn the complexities of stock market.
    No one can care better for your money than you .

  16. Hi,

    I had invested in Karvy PMS in Oct 2010 with a corpus of Rs. 5 lac.
    They had made a lot of promises, however presently the value of my portfolio is less than 2.5 lacs.
    I have observed that they buy a scrip at an x cost and then sell it at a much lower price rather than holding or averaging it. i know that it is sometimes to get out with a loss, but it is not true in almost all cases. what i mean is that if they claim to be a PMS service provider, do they not have enough expertise not to buy such shares. Also they must invest in a few blue chip companies to ensure that in bad times the erosion is not huge and only minimal.

    ANY COMMENTS !!!

    • Hi Ashish,

      In a PMS the discretion of buying or selling is of the Fund Manager and the main objective is to maximize the returns. To achieve this short term views are taken and that’s where most Fund Managers go wrong.

      A buy and hold strategy is good for investing and producing consistent returns, but it may not be very high. Considering the high cost in PMS along with profit sharing the churning is implemented to earn higher returns. This strategy has not paid well as equity markets are difficult to predict in short period.

      Thus , this strategy may not hold good for these schemes.

    • Hi Raju,

      Surely a Mutual Fund has many benefits which PMS is not able to deliver. What you need to consider is that any investment which has a short term objective will be at a higher risk in asset class like equities. So a Fund Manager who takes long term view will be more efficient then a FM with a short term objective. You need to consider this rule along with taxation aspect to identify which avenue is more appropriate.

  18. @Raju
    is there any evidence that this pms has delivered better than market returns over a long term?
    A typical equity mutual fund costs 2.5% each year. An Index based ETF costs about 1%. What’re the expenses of this pms?

    • Hi Sir,

      @Sumant. I would say the average costing of the PMS will range from 1.5% to 2% depending upon the scheme n the option one chooses. But would also like to bring to your notice a fact that mutual funds generally performs in line with the benchmark index whereas PMS gives far superior returns compared to the benchmark few ones i personally know are really good.

      Regards,
      Priya

  19. Hi Sumanth

    This pms has delivered better than market returns since inception -dec 2007 beating bench mark index cnx nifty. expenses are 2%-3%per year.

    • Source of this? Did it beat the market after expenses are deducted?
      Even if it did, that’s no guarantee that it will beat the market in the *next* 5 years… which is when you’d be investing.

  20. Guys, I want to warn you not to go for Prabhudas Leeldher PMS, I learned from others that Prabhudas Leeldher is the worst fund managment who are selling in brand name of Sandip Sambharwal. This fund manager was earlier SBI Magnum mutual fund manager where he did good job and got an award (may be the market was good that time and he was lucky enough to time it correctly) and his sales(Prabhudas Leeladher) people are using his brand name to sell his PMS products. He gave me 40% losses while market was down only by 7%. I thought PMS can beat the market and for that only we pay the fee to them but this is worst ever mistakes I made. While tried to discuss the sales people of Prabhudas leeladher, who used to make rounds at my office and home until I gave them cheque were not bothered to pick my phone or ever reply to may mails, phone calls or sms. Tried to speak to Sandip Sambarwal but he do not want to talk, for 3 weeks consistently he kept me telling that he will call today or tomorrow. Everytime some or other excuse he came up with.
    This company is not even ready to sell my holdings on my instructions which is a horrible experience.

  21. My potfolio is worth around Rs 25/ lakhs plus. Some mkting people are canvassing with me to consider PMS of Ing Vysya for my stocks.
    If anyone has exp with the above firm ,pl let me know as I am having reservations on PMS after going thro the experiences.

    • Dear Mr. Rao,

      Do self-evaluate a PMS scheme on various parameters before making your decision.Ensure that it meets your objective with regards to cost and other benefits.

  22. Hi.guys till today I was with a great hope that my funds would be utilised in proper way and earn me great income by investing in PMS, by viewing all your sharings and experiences, why should we go for a platform which do not have balance to stand thanq guys

  23. hi,

    I am businessman. I want to invest through PMS in the name of my company.
    Pls let me know the PMS fees paid is a deductible expenditure from my Business income or not.

    Regards,
    sunil

  24. My experience with Motilal Oswal in PMS investments have been very good. I invested in 2005 and still continuing. But now it appears Motilal Oswal has become too big for its clients specially if one has relatively small sum.
    Now SEBI has also notified that PMS investment would start from Rs. 25 lac instead of Rs. 5 lac.
    Virtually PMS is over for us small investors. Only MFs are there.
    N C Gupta

  25. Hello All,

    I had very very bad experience with PMS services in India. I had used HDFC PMS service.
    My advice to anybody who wants to invest in India go via Mutual Fund. Only if you want to get looted then feel free. I mean seriously. They will be playing with your money and top of that you will be paying them for annual charges also.

    I had trusted HDFC PMS just because of brand HDFC but they even do not talk to each other. HDFC Bank and HDFC PMS only have HDFC name in common. For rest they act like strangers. When you want to open account PMS guy will call you but when you have problem they do not bother to call you. They also have minimum 2 years lock in period.

    What I heard is that do not go via PMS root in India. Please inform it to all your friends and loved ones.

    Good luck !!!

  26. Sorry to hear about the bad experiences with PMS. I am pretty sure this is not specific HDFC PMS. The whole structure is rife with conflicts of interest (this is true in general with most financial products in India, not just PMS). Let’s do ourselves a favour. For equity investments, let’s stick to diversified equity mutual funds with low expense ratio. Or better still, Index based ETFs which don’t have any fund manager.

  30. I’d like to know how PMS have lock in period for their investors? under what regulation or law are they allowed to have lock ins?

  31. Hi,
    I want to know how to start a PMS service.
    Any course to do for this, educational background,any experience.
    If any courses please inform me.
    Thank You.

  32. Hi,
    I am also thinking about investing in Angel Broking’s scheme called Angel Gold. The sale man called it PMS but the required investment in the scheme isn’t fall into the category of PMS as mentioned above (Min 1 Lac to Max 4 Lac).
    The charges are 2% of the Investment and will be charged on half yearly basis. He has shown me the details of some of the existing clients and ensured me that the minimum return that I’ll be getting would be in the range of 15-20% annually. The scheme does not have any locking period or any exit load
    Is there anybody in this forum who knows about this scheme or can throw some light on this scheme?

  33. Please provide us the clarification on below mentioned point.

    Scenario 1
    PMS and Demat account Applicant signature pattern is Mr. A and Mrs. B and the corpus amount we are getting from the bank account of Mrs. B only.
    Can we accept the receipt of the corpus.

    Scenario 2
    PMS and Demat account Applicant signature pattern is Mr. A and Mrs. B and the corpus amount we are getting from the bank account of Mrs. B and Mr. A joint account
    Can we accept the receipt of the corpus

  34. I was also thinking of Sundaram’s PMS since their salesperson is after me. They claim that their portfolio is long term. However I am very skeptical and was researching about PMS, didnt get any concrete information or comparison. I think this is the best place so far.

    But I am inclined to do it myself than to go for Sundaram.

  35. i wants to open a company in which people invest money by buying its share.the work of the company is to invest in stockmarket by me.is this type company can be listed on stock market.

  36. Hi Hemant,
    I am a CA by profession and new to pms. I am mostly in the audit field. I am working in a ca firm in Pune. I have to do an assignment of due diligence.

    There is a financial consultancy firm which uses algorithms and other stuff to design strategies for their clients. They then sell the strategies to brokers and high net worth individuals. If there is profit a % of the profits are to be shared with the firm and if there is loss there will no sharing of profits, till the time there is profit.

    Another party is interested in having a 26% stake in the above financial consultancy firm. Mostly i have to check from the view point of SEBI guidelines. The above firm provides advisory services. Can you please help me as to how should i go about it? what other points can i look into?

    Regards
    Deepti

  37. Hello Friends… it appears nobody has anything much to say about the PMS scenario in the recent past…now with the bull markets in full swing, many people are dangling the carrots before the gullible investors….fine print of course puts the onus on the investor for all the risks taken by the fund manager…anybody with any experience with Sundaram PMS..??

  38. Strongly recommend against ICICI Direct Equity management or (PMS) services. In the time between June and Dec 2014 I have lost close to 53K on a overall fund size of 3L, add to it the 25K brokerage plan that got exhausted with loss making churns and the interest charges due to intra-day/marging trading gone bad. The Advisor was literrally gambling with the funds and taking stupid bets at 52 week highs. Stay away by miles from this.

  39. Hi Friends,

    I know all have a bad perception regarding the PMS Schemes which is provided by the brokers in Indian broking Industry. I want to tell you all that i am not from any broking house or any other PMS company or i am not writing comments on behalf of anyone to change the thinking of investors. I am a investor like you from 2007. We all are buying homes to stay for a longer period at least for 20-30 years or buying any car to use for 5-6 years but why can’t we buy blue chip stocks those who have very good business prospects for 5-6 years. There is an Individual who is guiding for the stock investments and assures minimum 18% return per Annum. If don’t have any trading account then you need to open the account where ever you want and inform the Individual. He wanted at least the account should have minimum balance of 1lakh and at least you should get invested at least for 3 years. He is charging yearly 3% advisory fee of the total amount invested in your account. I am giving an example below.
    Amount Invested 1, 00,000.00
    After 1 years says your fund vale is 1, 35,000.00
    Then its 35% return. Out of this there will be a profit sharing 25% on the excess return earned upon the guaranteed return. Here the guaranteed return is 18%.

    Excess return earned is 35-18=17%
    So the advisor sharing is 25% of 17%. that is 4.25 % that is 1487.50 and the management fee 3% of (1lakh)=3000.00
    So total expenditure of your portfolio is (3000+1487.50) =4487.50
    Clients profit=35000-4487.50=30512.50
    So yearly rate of return is 30.5%. Which is double than you MF return is not it ?
    If your account is not giving positive return then they are not going to take the management fees.
    Now I will explain the loss part that is if your fund is giving negative return at the end of the 1st year then you have
    at the end of the 3rd year he is assuring to give you the return in the compounding interest rate that is equals=1,64,303.00. If the fund vale does not reach that level he needs to get invested for some more time as per the advice from your advisor. And i am sure in the long-term it will give more that what you expect.

    • Hello krishna January 17, 2015, 3:46 PM,
      Let us know the gentle man, whom you are referring. Also I can understand there is big opportunity for the fund houses, as most of the readers are looking for good PMS provider.
      Venki

      • Hi Venki,

        My advice is stick with MF – there’s no transparency & comparisons in PMS.

  40. Art of investing :

    My 1st blog & reply to all investors n fund managers here. Few rules every investor should follow pre investment & post investment :

    1) Pre Investment : DO your own research do not believe in words given by any sales executive or your friend or relative or colleague. Know the company & strategy well
    2) Pre Investment : Have 1 dedicated financial advisor always. Like we have 1 family doctor 1 lawyer have 1 financial advisor who knows all your financial needs goals plans . Trust them until they betray you.
    3) Pre Investment : Not all investments are safe. Not even you fixed deposit with any bank any company any financial institution.
    4) Pre Investment : too much knowledge & research is harmful. It makes you more conscious & you end up not investing in good products.
    5) Pre Investment : Diversify but over diversification doesnt fetch any returns. Diversify into Debt, Equity & real Estate. Remember you are an indian investor so you will never sell gold even if you bought it at Rs. 500. So do not consider gold as an investment.

    Post Investment rules :

    1) Post Investment : Dont check the value every day. Spare time once a month to check the investment with your advisor.
    2) Post Investment : Dont regret any decision. Neither the time will come back nor the opportunity. Enjoy what you have invested in.
    3) Post Investment : Do not stick to traditional way of investing. Accept ideas. Remember somebody thought of ecommerce & today menting money like hell.
    4) Post Investment : Do not liquidate unless you have no option but to withdraw.

    I would love to hear views opinios comments on the same.
    Happy investing.

    Regards,
    Priya

  41. I am a long terms investor and making investment in equities since year 2000. My equity list keep increasing as i am not able to devote time managing my portfolio. Last one year looking for a good PMS . As such not found any such PMS who are working on savings based fees model or on fees against committed return. If anyone could help me out?

  42. I am planning to invest in a good PMS service service
    I have been offered thru ICICI Sundaram PMS ‘s India Growth portfolio
    I will appreciate any feedback on the portfolio, the PMS providers and the fine print to look for before signing up
    Thanx & rgds
    DM

      • Sundarams PMS service seems good…but in terms of Portfolio i am awaiting some guidnace n feedback from erstwhile seniors n experts like Hemant Reniwalji and others
        ICICI is offering the Sundaram PMS with Entry Load of 1% and AMC of 2%
        BUT NO PERFORMANCE BONUS
        The India growth Portfolio has given 36% in last 2 years since inception and about 9% till Aug 2015
        Looks good prima facie….but still await valuable guidance from Heman reniwalji and financial experts who knwo the PMS industry and esp. Sundaram too
        Thanking All in Anticipation
        Warm regards
        DM

  43. I am asked to invest in a PMS. Options were motilal oswal PMS, alchemy PMS, birla PMS. Can I invest? I am new to PMS. Please advise.

  44. Karvy staff is after me to invest in Birla PMS with 1% management fee and profit sharing of 20% over 12%, can any body guide me about Birla PMS and is there ny possibility of negotiation in fee. I have seen somewhere that they charge 1% fee in quarterly installments for first year and profit sharing as above next year. any body will guide me on these points.

    • Dear sir,

      More than the charges will request you to look at the performance. N the fund hasnt performed good in last 1 yr. There are better pms to look at. Names like Centrum Deep value III, MOST value strategy .. ASK pms.

      • Where can I have authentic comparision of performance of different PMS. The Wealth Manager shows only the performance of PMS which he wants to sell. I could not find any site where I can have independent and authentic information on different PMS to arrive on a decision.

    • YOU SHOULD NEGOTIATE ON MANAGEMENT FEE & A/C MAINTENANCE FEE , DEMAT AMC WHICH ARE PROMINENT AMONG THE MONIES YOU SHELL OUT. PLZ NOTE THAT DIVIDEND EARNED BY YOUR SCRIPS IS ALSO CONSIDERED AS PROFIT.ONE SHOULD NT GO FOR PMS OFFERED BY FIRMS HAVING DP SERVICES, AS THEY TEND TO EARN BROKERAGE THROUGH TOO FREQUENT SHUFFLING. BESIDES, WHENEVER YOU GET PROFIT TRY TO GET PAY OUT SO THAT YOUR RISK AMOUNT GETS REDUCED-IT’S LIKE GETTING DIVIDEND PAYOUT FROM M.F.s

  45. Mr. Porinju Veliyath has claimed that he has given tons of returns on the PMS Serives. One must have account with BNP Paribas broking house. Is there any one who has invested with Porinju’s guidance ? Recently in my visit to BNP Paribas office, the manager there has reported that BNP Paribas PMS services has given 33% annual return during last three years means from 2012 to 2015….. but it was just a simple computerised print out…. No portfolio details. I was worried about the transparency.. How can u put your hard earned money with word of mouth ? Pls. Guide me Properly.

  47. I am holding Sundaram pms SIGP since dt 02 / 07 /2015 @ 1.5 yrs completed but No improvisation in portfolio value It never make anything profit since today. Stocks selection is at very High @52 w Investment. NO sector and stocks performing as per Benchmark of SIGP BSE 100 No actions are taken by funds Manager positively in the benefits of clients. Only Maintenance charges are covered and collected in the favor of company only. They are always in loss and their prediction regarding stocks & sectors selection is very very very poor so far. Very poor & Bad services are provided. Not answering clients complain queries regarding stocks related ,mails replied time to time satisfaction to customers. No bother @ clients requirements. No pms value creation steps taken so far. No Appreciation as part of portfolio management services. They have no replied updated. Pms is badly affected. No body should entry in such bad portfolio pms It is simply loss making business . It is better to Invest Independent in stock market No Charges and Maintenance fees to be paid. Also Inform to all those clients are suffering should contact me freely to fight against such unplanned Sundaram portfolio management services
    Contact me at any time
    Vijay Shah
    Mo. 9925210626

  48. this is one of the best article on PMS, i just wanted to ask that can you please suggest some companies which offers PMS..

    Thank You!

  49. Let me add my 2 cents on this — Consider any investment in PMS as a purchase, as with all purchases, it is incumbent on the buyer to check and verify the promises made initially –remember if the PMS provider offers you a spectacular return on your investment, (anything in the range above 18~20%) , you can be sure there is something fishy–even people who have spent their entire lifetime in the share market are unable to predict future prices, ( buy low and sell high , so called “timing the market”) so my suggestion is to stay away from PMS — go ahead and invest in a good index fund and balanced fund ; if ready to take more risk, invest in a good diversifed equity fund as well. Don’t get lured by the promise of assured returns, mostly the returns will be less than what you get from a good debt fund.

    • hi,

      Disagree to your point of view.

      1) PMS is not a substitute to debt fund or even balanced fund. Its an organised way to managed the complex market in a simple way.
      2) Inxed funds are nothing else but replica of Nifty or Sexsex. The expense ratio will be comperatively higher. Rather buy nifty bees & keep it in the demat account. As index fund moves the way the nifty moves & hence very less chances of giving any alpha over the benchmark which is Nifty 50.
      3) Mutual funds have no transperancy of the management of the fund compared to what PMS has. Stock repition is highly possible if not diversified properly.
      4) Prediction is not the only way to invest. The way to invest is decide the time horizon, choose the best available option, diversify smartly between debt & equity & stay invested even in bad times.
      5) No one can ever time the market. The best time to invest is when one has money. In the falling market choose the strategy life Systematic Trasnfer Plan. In the rising market choose the strategy like Systematic Withdrawal Plan.

      Regards,
      Priya Shah.

  50. ​there are good no of PMS available in market to invest from , it is imp to choose wisely where your thought process matches the fund thoughts.

  51. Hey guys! I was thinking of switching to PMS Service. I am told returns amount to 40% per annum if amount is in lock in period of 5 years..
    Is the feedback to me from Bankers wrong and manipulative.
    All investments of any kind are subject to constant risk. Bank rates are dropping. Where shall we invest.
    What I feel is invest in open ended MF and get out if markets slide.
    There is no exit load also.
    Would anyone like t share views on this. Monthly returns are required for us. Can’t afford down ward risks.

      • Hi Vijay,

        Frankly speaking no lock in is required in any PMS but there might be exit loads.

        From what the advisor said about the lock in i perceive they suggested an ideal time horizon to be in any kind of equity related schemes or PMS, which will hold true looking at the history. I also believe PMS cannot just be looked for the reason of returns.

        Assume you have 100 Rs allocation towards equities. Rs. 25 can go towards PMS Rs 25 towards MFs Rs. 25 short term trading & rest in long term stocks.

        Let me know if you find it useful.

        Regards,
        Priya Shah

    • i dont think timing the market is a good idea unless you want to be a speculator, basic art of investing to keep invested for as long as you can with a min horizon of 3 yrs before you pull out any money. investing in pms much superior and better compared to a mf and one must experience it if you have min 25 lakhs to spare for 3 yrs. going with a good pms with impeccable track record is the key. m invested with a pms and very satisfied with 5x in 4 yrs..(after their exps.) what more do you need..

      • Hi Rishabh,
        4 yrs is a very small time to pass judgement.. in every bull market few pms take excessive risk & generat spectacular returns.. lets see what will happen in a falling market.

  52. The Portfolio Management Services ( PMS ) offer complete assistance in delivering growth to investors.Portfolio management services on complete need analysis that are uniquely designed to meet growth needs in a holistic manner. We get the benefit of professional money management with the flexibility, control and potential tax advantages of owning individual stocks or other securities. benefits of a mutual fund plus the flexibility of buying stocks in a phased manner or in a conducive market.Communication channels for information on major market events and portfolio performance updates.Account statements and performance reports are emailed on a monthly basis. A web portal enables tracking of all information relating to investment on daily basis. Audited financial report for portfolio is sent at the end of the financial year.With total portfolio transparency, in-depth market information for better decision-making, direct access to the portfolio management team, PMS assures high service standards.

  55. Any comment or feedback on Kotak Special Situation PMS. Is it advisable to invest in this PMS?? Minimum amount is Rs 25 Lac.

  56. Hello, few months back I invest Rs. 1 lac in a wellknown firm for PMS. For next 4 months they given 2.5% interest on it, but since last 2 months I found that they had made huge loss of Rs. 96,000/- and not even paying Interest of 2.5% to me. Now when I searched on SEBI’s website I found that they r not registered PMS. Can I know what to do if any firm not a registered PMS with SEBI and indulge in such practices.

    • Hi Deepak,

      I am sorry to hear this.
      PMS don’t accept less than Rs 25 Lakh – I think they are some crook. You can complain to SEBI.

    • I hope its not a company located in Indore… too many frauds are being done by the Indore located companies these days….

  57. Hey Madhupam, it was a very informative article. So which PMS should a beginner in the investment sector opt for Discretionary PMS or Non-Discretionary PMS?

  58. Hello Sir, it was such an easy going and smooth article to read. I want to ask that what are the ways to start a career as a portfolio manager if one doesn’t want to go for MBA in finance.

  59. Sir, But dnt you think if there was no profit booking done at the time when the portfolio reached 25 lacs from 20 lacs, it can only be called unrealised gain, because PMS are done for the time horizon of atleast 3 years and booking profit on a regular basis wont be considered Long term investing.

    Regards

  60. Portfolio management service aims to offer assistance in delivering long term growth to investors PMS schemes offer a wide range of attractive features and promises for returns, they also have certain risks which only sophisticated wealthy individuals can tolerate. Even these investors must carefully consider their options before taking an investment decision.

  61. Kya pms me group treding ka kam v hota hai
    जैसे …20000(twenty thousand) lagakar 3%ka profit pr month pa sakta hai

  62. Great blog! you know exactly what you own and depending on the agreement with your portfolio manager, you may have a say in selecting your investments. Your portfolio does not get affected with the subscriptions and redemptions of other co-investors

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