PMS can be powerful — but only if it matches your corpus, risk appetite, and goals. Connect with a SEBI-registered, fee-only advisor who will give you an honest, unbiased view. No sales pitch.
Both are valid investment vehicles. The right choice depends entirely on your corpus, goals, and risk tolerance — not on what sounds more impressive.
No minimum corpus required. Accessible to investors at any stage of wealth-building.
Most equity funds hold 50–100 stocks. Instant diversification significantly reduces single-stock risk.
Easy to invest, exit, and compare. NAV-based daily pricing and strong SEBI oversight.
You own units of a fund, not the underlying stocks. Limited transparency into daily holdings.
Large AUM forces diversification. The manager can't be as decisive as a PMS manager with a focused, smaller corpus.
The same fund is bought by millions of investors. Your tax position, concentration, or specific goals are irrelevant to its construction.
Securities are held in your own demat account, in your name. Full legal ownership — not fund units.
The portfolio manager can align strategy specifically to your situation, time horizon, and goals.
You receive transaction-level reporting. Every buy, every sell, every holding — visible in real time.
SEBI mandates a minimum investment of ₹50 lakh. Not accessible for investors below this threshold.
Management fees of 1–2.5% p.a. plus potential performance fees make PMS significantly more expensive than passive alternatives.
Most PMS strategies hold 15–30 stocks. Higher concentration means higher potential upside — and steeper potential drawdowns.
The right choice depends on your corpus, goals, and risk tolerance. A Foliyo-matched advisor will tell you honestly whether PMS adds value for your specific situation — or whether you'd be better served by something else.
The person recommending a PMS strategy to you may be paid by the PMS house — not by you.
"Free" PMS advisory typically earns 1–2% upfront distribution commission from the PMS house — paid directly from your corpus at the time of investment.
Distributors are financially incentivised to recommend strategies that pay the most distribution commission, not the strategies best suited to your situation.
Distributors are not fiduciaries. They carry no legal obligation to recommend what's right for you — only what they're authorised to sell.
Telling you PMS is unsuitable costs them the sale. That conversation almost never happens with a distributor.
Zero commission from any PMS house, AMC, or product manufacturer. Their entire income is the advisory fee you pay.
No financial incentive to recommend one PMS strategy over another. Every recommendation is based solely on your needs and risk profile.
SEBI RIA regulations require fiduciary conduct at all times — your advisor must act in your best interest and disclose all conflicts of interest.
A fee-only advisor has no financial incentive to push you into PMS. If it's not right for your situation, they'll say so — and tell you what is.
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"Most investors approaching PMS for the first time haven't read the disclosure document. That's where the real story is — fees, strategy, risks. I spend the first session just on that."
I was about to put ₹75L into a PMS my bank RM recommended. My Foliyo advisor read the disclosure document with me — the hurdle rate was set at 0%, which meant I was paying performance fees even on market-matching returns. We found a better-structured strategy instead.
I had ₹60L ready but my advisor told me I wasn't ready for PMS yet — my emergency fund and term insurance weren't in place. That kind of honest advice is what I'd been missing for years.
Three PMS strategies looked identical on paper. My advisor broke down the actual portfolio composition, turnover ratios, and drawdown history. The decision became obvious.
Every PMS must disclose its fee structure in its PPM (Portfolio Management Programme document). Read it before you invest.
A flat annual fee charged on your corpus — typically 1% to 2.5% per year, debited from your account quarterly regardless of how the portfolio performs. This is equivalent to the expense ratio in a mutual fund, but charged directly and disclosed transparently. On a ₹1Cr corpus at 1.5% p.a., you pay ₹1.5L per year in management fees — every year, whether the market is up or down.
Many PMS strategies also charge a performance fee — typically 10% to 20% of profits above a set threshold. This is designed to align the manager's incentives with yours: they only earn extra when you're earning meaningfully above a benchmark. However, the details matter — the hurdle rate and high-watermark provisions determine whether this alignment is genuine or cosmetic.
The hurdle rate is the minimum return the portfolio manager must deliver before charging you any performance fee. If the hurdle rate is 10% and your portfolio returns 8%, you pay zero performance fee. If it returns 15%, the performance fee applies only to the 5% above 10%. A higher hurdle rate protects you — it means the manager must genuinely outperform before earning extra compensation. Always ask for this number before committing to any PMS.
The high-watermark clause ensures you never pay a performance fee on profits you've already paid for. If your portfolio was at ₹1.2Cr at year-end and then fell to ₹1Cr, the manager must first recover above ₹1.2Cr before charging a new performance fee. This protects you from paying fees during recovery periods. Not every PMS includes this provision — it's something your advisor will specifically check before recommending a strategy.
A fee-only advisor will tell you honestly whether PMS is right for you — and if so, which strategy fits. The intro call is free. You talk to an advisor within 24 hours. There is no commitment.
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