PMS in India
In this chapter: Industry structure · Discretionary, non-discretionary, advisory PMS
PMS (Portfolio Management Services) is SEBI-regulated wealth management for HNW clients (minimum ₹50 lakh). Three types: Discretionary (PM trades with full authority), Non-discretionary (PM advises, client approves each trade), Advisory (PM recommends only). Fees and structures vary significantly by type.
PMS industry has grown to ₹35+ lakh crore AUM. Discretionary dominates — clients delegate execution. Non-discretionary is for sophisticated clients wanting control. Advisory PMS overlaps with RIA territory; SEBI has tightened the boundary. Fee structures: fixed (% AUM, typically 2-3%), performance (e.g., 20% above hurdle), or hybrid. The minimum investment threshold (₹50L) restricts PMS to HNW only — and even within HNW, due diligence on the manager matters far more than for mutual funds.
A nuance: PMS performance reporting is less standardised than mutual funds — XIRR vs TWR vs absolute, with cherry-picked start dates, is common. SEBI mandates standardised reporting since 2020 but enforcement varies. PMS investors should demand audited TWR vs benchmark, full fee disclosure, and performance net-of-fees and net-of-taxes. Many PMS pitches use gross-of-fee returns.