Q.1. What is Portfolio Management Services (PMS)?

ANS. PMS is a tailor-made investment service offered by professional portfolio managers to manage high-value investments in equity, debt, or other instruments, based on a client’s risk appetite and financial goals.

Q.2. Who is eligible to invest in PMS?

ANS. PMS is primarily for high-net-worth individuals (HNIs). As per SEBI, the minimum investment amount is ₹50 lakhs (in cash or securities).

Q.3. What are the types of PMS?

ANS.

• Discretionary PMS: Fund manager has full control over investment decisions.

• Non-Discretionary PMS: Client approves each transaction.

• Advisory PMS: The manager gives advice; execution is client’s responsibility.

Q.4. What are the benefits of PMS?

ANS.

• Personalized portfolio management

• Professional fund management

• Transparent reporting and tracking

• Direct ownership of stocks and securities

• Potential for tax efficiency in some strategies

Q.5. What are the risks involved in PMS?

ANS.

• Market risk: Since PMS often involves equity or volatile assets.

• Concentration risk: Fewer stocks may lead to higher risk.

• Liquidity risk: Redemption may take time compared to mutual funds.

• Manager risk: Returns depend heavily on the skill of the portfolio manager.

Q.6. How is the performance of PMS reported?

ANS. PMS providers are mandated by SEBI to report performance (net of all fees). You will receive:

• Monthly or quarterly reports

• Portfolio holdings & valuation

• Capital gains & transaction summary

Q.7. How are PMS returns taxed?

ANS. Since you directly own the securities:

• Equity gains:

  • STCG (< 1 year): 15%

  • LTCG (> 1 year): 10% (above ₹1 lakh per year)

• Debt gains: Taxed as per your income slab

• PMS does not deduct TDS on capital gains — you are responsible for paying taxes.

Q.8. What are the typical fees in PMS?

ANS. PMS providers usually charge:

• Fixed Management Fee: 1%–2.5% annually

• Performance Fee: 10%–20% of profits above a hurdle rate (e.g., 10%)

• Entry/Exit Load: Sometimes applicable
  Fees can be structured as:

• Fixed only

• Profit sharing only

• Hybrid (fixed + performance)

Q.9. How can I invest in PMS?

ANS. You can invest through:

• Registered PMS providers (like Motilal Oswal, ASK, Marcellus, etc.)

• Banks and wealth management firms

• SEBI-registered investment advisors

You’ll need:

• PAN card

• KYC documents

• Demat account

• Minimum ₹50 lakh investment

Q.10. Can I redeem or exit PMS anytime?

ANS. Yes, but PMS investments are relatively less liquid:

• Some providers have lock-in periods (typically 1–3 years).

• Partial withdrawal may be allowed depending on the scheme.

• Exit loads may apply.

Q.11. Is PMS regulated by SEBI?

ANS. Yes. PMS providers must be registered with SEBI, and they follow strict regulations regarding client money, disclosures, and reporting.

Q.12. What should I check before choosing a PMS provider?

ANS.

• Regulatory registration (SEBI)

• Past performance and consistency

• Investment strategy (concentrated/diversified)

• Transparency of fee structure

• Quality of reporting and client service

Q.13. Are returns in PMS guaranteed?

ANS. ❌ No. Returns are not guaranteed. Like all market-linked investments, PMS returns are subject to volatility and market performance.

Q.14. What is the reporting frequency in PMS?

ANS. You’ll typically receive:

• Monthly/quarterly statements

• Real-time or periodic online access

• Year-end reports for taxation

Q.15. Can NRIs invest in PMS?

ANS. Yes, NRIs can invest in PMS under RBI guidelines via NRE/NRO accounts with appropriate approvals (including PIS permission where required).

Q.16. Can I switch from one PMS to another?

ANS. Yes. However:

• Fees may apply

• You may need to sell current holdings, triggering capital gains

• A fresh onboarding process is required

Q.17. Is PMS suitable for me?

ANS. PMS is suitable if:

• You can invest ₹50 lakh or more

• You want a tailored portfolio

• You have a medium- to long-term horizon

• You're comfortable with higher risk and volatility