The Indian stock market has grown at a 14.5% CAGR over the last decade, according to a 2024 report by the Association of Portfolio Managers in India . Yet, over 67% of individual investors underperform the market indices due to emotional trading decisions and lack of professional management.

• Are you concerned about managing a large portfolio without proper expertise?

• Do you need personalized investment strategies that mutual funds cannot provide?

• Are you looking for professional guidance that goes beyond basic stock picking?

For high-net-worth individuals and serious investors, professional portfolio management has become essential in 2025's complex market. Portfolio Management Services (PMS) can provide the expertise and personalized approach needed to navigate market fluctuations while targeting solid returns. Understanding how to invest in PMS can be your first step toward more sophisticated wealth management.

Key Takeaways

• PMS requires a minimum investment of ₹50 lakhs as per SEBI regulations.

• There are three types of PMS: discretionary, non-discretionary, and advisory services.

• The PMS investment process involves 8 key steps from goal assessment to ongoing monitoring.

• PMS offers personalized investment strategies with direct equity ownership unlike mutual funds.

• SEBI registration is mandatory for all legitimate PMS providers in India.

• PMS fee structures typically include fixed management fees (1-2%) and performance fees (10-20%).

• The ideal PMS investor has a medium to long-term investment horizon of at least 3-5 years.

What is Portfolio Management Service (PMS)?

Portfolio Management Service is a professional investment solution where SEBI-registered experts manage your investment portfolio with a minimum investment of ₹50 lakhs. PMS gives you direct ownership of securities with personalized strategies based on your financial goals and risk profile, unlike mutual funds where you own units in a pooled fund.

PMS comes in three main types to match your preferred level of control:

• Discretionary PMS: Manager makes all investment decisions on your behalf. Ideal for hands-off investors who prefer to focus on overall performance rather than daily decisions.

• Non-Discretionary PMS: Manager recommends investments but you approve each transaction. Perfect balance of professional guidance with investor control over final decisions.

• Advisory PMS: Manager provides only investment advice and strategy suggestions. You handle all execution yourself. Best for knowledgeable investors seeking expert input.

Eligibility Requirements for PMS Investment

Before investing in PMS, you must meet specific eligibility criteria set by SEBI. Understanding these requirements helps determine if PMS is the right option for your financial situation.

Minimum Investment Amount

The most significant requirement is the minimum investment threshold. As per SEBI regulations updated in 2019, the minimum investment amount for any PMS is ₹50 lakhs (₹5 million).

This high entry point positions PMS firmly in the domain of high-net-worth individuals (HNIs) and affluent investors. The substantial minimum investment ensures that PMS providers can create adequately diversified portfolios while covering their operational costs.

Investor Category

PMS is primarily designed for:

• High-Net-Worth Individuals (HNIs) with significant investable assets

• Ultra-High-Net-Worth Individuals (UHNIs) managing substantial wealth

• Family offices overseeing generational wealth

• Corporate entities looking for treasury management solutions

Risk Tolerance Profile

PMS investments often involve direct equity exposure, which carries inherent market risks. Appropriate candidates should have:

• Moderate to high risk tolerance

• Emotional discipline during market fluctuations

• Financial capacity to withstand temporary market downturns

Investment Horizon

The ideal PMS investor has a medium to long-term investment horizon:

• Minimum recommended time frame: 3-5 years

• Optimal performance period: 5-7 years

• Long-term wealth creation: 7+ years

Short-term investors may find PMS unsuitable due to market volatility and the strategic nature of portfolio construction.

Step-by-Step Process to Invest in PMS

Investing in PMS requires a careful approach to find the right service provider for your needs. Here's a simple 8-step guide to help you make smart PMS investment decisions.

1. Assess Your Financial Goals

Start by defining your financial goals with clarity. Think about what you want to achieve with your investments - whether it's wealth preservation, moderate growth, or aggressive returns. Consider your time horizon, which could be medium-term (3-5 years) or long-term (5+ years). Assess your comfort with market ups and downs, and decide if you need regular income from your investments.

Write down these goals as they'll guide your PMS selection. Good financial goals should be specific and realistic with clear timelines, helping both you and your portfolio manager stay focused.

2. Research PMS Providers

Create a shortlist of quality PMS providers by checking their SEBI registration status, which is mandatory for all legitimate providers. Look at their assets under management (AUM) and how it has grown over time. Review the experience of their fund managers and their overall market reputation.

The SEBI website is an excellent place to verify registration details. Financial publications and rating agencies like CRISIL or Morningstar can provide useful insights into a provider's standing in the market. Talk to existing clients if possible to understand their experience.

3. Analyze Investment Strategies

Each PMS provider has their unique investment approach. Some focus on value investing, looking for undervalued companies, while others prefer growth stocks with strong expansion potential. Some specialize in particular sectors while others diversify across the market.

Pay attention to their market cap preferences - whether they focus on large, established companies or smaller, potentially faster-growing ones. The strategy should match your risk comfort level and financial goals. Ask detailed questions about how they select stocks and make investment decisions.

4. Evaluate Historical Performance

While past returns don't guarantee future results, they show how the PMS has performed in different market conditions. Review their performance over multiple time periods - 1 year, 3 years, and 5 years when available. Compare how they did during both strong markets and market downturns.

Check their performance against relevant benchmarks like Nifty or Sensex. Focus on risk-adjusted returns, not just the headline numbers. How a PMS performs during market corrections often reveals more about their risk management than how they perform in bull markets.

5. Understand Fee Structure

PMS fees can significantly impact your returns over time. Most charge a fixed management fee (typically 1-2% annually) plus a performance fee (usually 10-20% of profits above a certain threshold). Some may have entry or exit charges, and there are always additional costs like brokerage and demat charges.

Ask about "high watermark" provisions, which ensure you don't pay performance fees on recovered losses. Calculate how these fees affect your potential returns, as they can compound over time to make a meaningful difference.

6. Review Operational Details

The practical aspects of your PMS relationship matter for your everyday experience. Understand their withdrawal policies and how quickly you can access funds if needed. Check their reporting systems - how often you'll receive updates and how detailed they are. Ask about online access to your portfolio and how easy it is to communicate with your fund manager when you have questions.

These operational factors significantly impact your satisfaction as an investor and should weigh into your decision alongside performance metrics.

7. Complete Documentation

After selecting your PMS provider, you'll need to complete several paperwork steps. This includes signing the PMS agreement, completing KYC verification, assessing your risk profile through questionnaires, linking your bank and demat accounts, and transferring your initial investment amount.

This process typically takes about 3-7 business days. Make sure you understand all the terms before signing and ask questions about anything that isn't clear.

8. Monitor Performance Regularly

Once your PMS account is active, stay engaged with your investments. Review the quarterly performance reports to see how your portfolio is doing. Schedule annual reviews with your portfolio manager to discuss strategy and results.

Regularly check if your investments are still aligned with your financial goals, which may evolve over time. Don't hesitate to discuss adjustments with your manager if market conditions change or your objectives shift.

Understanding PMS Fee Structure and Costs

The fees you pay for portfolio management services directly affect your investment returns. Before committing your money, it's important to understand the fee structure, which typically has two main components plus some additional costs.

Management Fee

The management fee pays for the basic service of managing your portfolio. Most PMS providers charge between 1-2% of your invested amount annually. This fee is usually calculated on your average daily or quarterly portfolio value and collected every three months.

Key points about management fees:

• Typically ranges from 1-2% per annum

• Calculated on average AUM

• Collected quarterly in most cases

• Some providers offer tiered fee structures with lower rates for larger investments

Performance Fee

The performance fee creates alignment between your goals and the manager's incentives. This fee typically ranges from 10-20% of the returns that exceed a minimum threshold (hurdle rate), often set around 10-12% or linked to a market index.

Important performance fee considerations:

• Usually 10-20% of profits above a hurdle rate

• Hurdle rate typically set at 10-12% or linked to market index

• Calculated annually in most cases

• High watermark provision ensures you don't pay twice for the same performance

Additional Costs

Beyond the main fees, be aware of other expenses that affect your total returns:

• Brokerage charges: 0.1-0.5% on trades

• Demat account fees: Annual maintenance plus transaction costs

• Audit and legal fees: Administrative expenses

• Entry/exit charges: Some providers charge 1-2% for portfolio entry or early exit

When comparing different PMS options, look at the total expense picture rather than just the headline fee rates. The right fee structure should balance fair compensation for the manager with preserving your investment returns. Remember that the most suitable PMS isn't always the cheapest one, but rather the one whose performance justifies its costs.

PMS vs. Mutual Funds: Key Differences

Investors often wonder whether to choose PMS or mutual funds. This comparison table highlights the key differences to help you make an informed decision based on your needs:

The right choice depends on your investment amount, need for customization, desire for transparency, and the value you place on personalized investment service.

Top Portfolio Management Services in India

India's PMS landscape has evolved significantly, with several providers offering distinct investment approaches and expertise. Here's a brief overview of some leading PMS providers to consider:

1. Ckredence Wealth

Known for truly personalized portfolios built specifically for each client's unique financial goals and risk profile. With ₹550+ crore AUM and 410+ high-net-worth clients, Ckredence stands out for its 100% customized approach rather than model portfolios. Their weekly portfolio monitoring exceeds the industry standard of monthly reviews.

2. Marcellus Investment Managers

Founded by Saurabh Mukherjea with a focus on "Clean Companies" approach. They maintain concentrated portfolios of businesses with strong corporate governance and sustainable competitive advantages. Their distinctive forensic accounting analysis helps identify quality companies for long-term investment.

3. ASK Investment Managers

With over 40 years of experience, ASK focuses on quality growth companies through strategies like India Select and Emerging Opportunities. Their research-driven, bottom-up stock selection process appeals to investors seeking conservative growth with stability.

4. Abakkus Asset Management

Founded by former Reliance Capital CIO Sunil Singhania, they specialize in benchmark-agnostic portfolios with a mid and small-cap focus for alpha generation. Their value investing philosophy identifies potential market leaders through fundamental analysis.

For a comprehensive analysis of the top 10 PMS providers in India for 2025, including detailed performance comparisons, investment strategies, and selection criteria, we recommend reading our dedicated guide: Top 10 PMS in India for 2025: A Comprehensive Guide for HNI Investors.

Why Should You Choose Ckredence Wealth?

At Ckredence Wealth, we don't simply sell portfolios, we build them around you. If your current advisor offers standardized solutions or lacks proactive communication, it's time to experience the difference of truly customized wealth planning.

Solutions That Matter

• Hyper-Personalized Portfolios: Built from the ground up for each client, considering your goals, investment behavior, and financial legacy plans.

• Multi-Asset Class Allocation: Diversification across equity, debt, AIFs, mutual funds, PMS, REITs, and alternative investments—aligned with your time horizon.

• Active Risk Monitoring: Your portfolio adapts as markets shift with strong focus on downside protection.

Our Performance Edge

• Tailored PMS Strategies: "Every PMS we build is bespoke crafted after deep consultation, not copied from templates."

• Transparency & Governance: "You receive clear, periodic reporting with full portfolio disclosures and zero hidden charges."

• Wealth Beyond Markets: "From tax optimization to legacy planning—we help manage your wealth holistically."

Conclusion

Investing in Portfolio Management Services offers a professional approach to wealth management for those with substantial capital to invest.

Key points to remember:

• PMS requires careful selection of providers based on their track record, investment philosophy, and fee structure

• The minimum investment of ₹50 lakhs makes PMS suitable primarily for high-net-worth individuals

• Direct ownership of securities provides greater transparency and tax efficiency compared to mutual funds

• Regular monitoring and periodic reviews are essential to ensure alignment with your financial goals

For investors seeking personalized investment strategies, professional expertise, and direct market participation, PMS presents a valuable option in their wealth management journey.

FAQs

What is the minimum amount required to invest in PMS?

The minimum amount required to invest in PMS is ₹50 lakhs as per SEBI regulations updated in 2019. 

How is PMS different from mutual funds?

PMS offers direct ownership of securities with personalized strategies based on your goals. 

What are the tax implications of investing in PMS?

PMS investments follow direct equity taxation rules with short-term gains taxed at 15%. Long-term capital gains above ₹1 lakh per year are taxed at 10%.

How do I select the right PMS provider?

Select a PMS provider by checking their SEBI registration, analyzing past performance, understanding their investment strategy, reviewing fee structure, and assessing their risk management approach.