Who Should Invest in Portfolio Management Services Expert Advice for India’s Serious Wealth Builders

In an era where investing is no longer just about saving tax or beating inflation, but about aligning your capital with long-term strategy, Portfolio Management Services (PMS) have emerged as a serious wealth-building tool for discerning investors.

Whether you’re a high-earning professional, a startup founder post-exit, or someone with capital sitting idle and no time to manage it, PMS gives you the advantage of professional expertise, personalised portfolio design, and active risk management.
But what exactly is PMS? How does it work? And more importantly, who should consider it?
Let’s unpack this, minus the buzzwords, with clarity that adds value.

What is Portfolio Management Services (PMS)?

Portfolio Management Services refer to specialised investment solutions offered by SEBI-registered portfolio managers to manage your investments in equity, debt, and other asset classes on your behalf.
Unlike mutual funds, where you own units in a pooled fund, PMS gives you direct ownership of securities, held in your demat account, with a tailor-made strategy designed around your risk tolerance, goals, and investment horizon.

PMS is ideal for investors who seek:

• Customised portfolio construction
• Access to expert research and analytics
• Active monitoring and timely rebalancing
• Transparency on holdings, taxation, and performance

It’s the difference between wearing a suit off the rack and getting one tailored to your exact measurements.

How Does PMS Work in Practice?

Once you sign up for financial portfolio management services, the process typically flows like this:

1. Profiling: Your financial goals, risk appetite, time horizon, liquidity needs, and existing asset mix are analysed.
2. Strategy Allocation: Based on your profile, the manager crafts a strategy, growth-oriented, value-driven, contrarian, or even hybrid thematic portfolios.
3. Execution: The portfolio manager invests directly in equities, fixed income instruments, ETFs, REITs, or other approved securities, under SEBI guidelines.
4. Monitoring & Rebalancing: The portfolio is regularly reviewed and rebalanced as needed to maintain alignment with market trends and your original goals.
5. Reporting: You receive periodic updates, detailed statements, and performance reports, all transparent and traceable in your own demat account.

Types of Portfolio Management Services in India

There are broadly three types of PMS in the Indian ecosystem:

1. Discretionary PMS

In this model, the portfolio manager takes all investment decisions and executes them without prior consent for each trade. It’s ideal for investors who want to delegate and trust professional judgment.

2. Non-Discretionary PMS

Here, the portfolio manager suggests trades but only acts upon investor approval. It suits those who prefer more control but still want expert guidance.

3. Advisory PMS

In this format, the manager only provides recommendations. You, the investor, are responsible for execution. Perfect for experienced investors seeking a second opinion.

Minimum Investment & Eligibility

As per SEBI regulations, a minimum of ₹50 lakh is required to invest in PMS. This threshold ensures that PMS is structured for investors with substantial portfolios and a long-term view.

Eligibility:

• Indian residents
• NRIs (Non-Resident Indians)
• HUFs (Hindu Undivided Families)
• Corporations and family offices

Benefits of PMS Over Mutual Funds

Wondering why you’d opt for PMS when mutual funds are so accessible? Here’s how they differ:

PMS is a natural progression for investors who’ve outgrown the one-size-fits-all model of mutual funds and want their wealth managed with a sharper focus.

Who Should Invest in PMS?

Here’s who truly benefits from financial portfolio management services:

• High Net-Worth Individuals (HNIs): With large, diverse portfolios needing expert management.
• Busy Professionals: Those who earn well but lack time to manage or optimise their investments.
• Startup Founders & Entrepreneurs: Especially post-exit, to deploy capital efficiently across asset classes.
• Retirees with Significant Assets: Seeking income stability, tax efficiency, and preservation.
• Global NRIs: Who want India-focused active exposure with professional oversight.

If you’re looking for more than just “returns” and want your portfolio to reflect your goals, life stage, and values, PMS is a credible choice.

Taxation in PMS: What You Should Know

Since the assets are held directly in your demat account, taxation under PMS is based on actual realised gains:

• Equity Long-Term Capital Gains (LTCG): 12.5% on gains above ₹1 lakh held for over a year.
• Short-Term Capital Gains (STCG): 20% on equities sold within 12 months.
• Other Instruments: Taxed as per holding duration and asset class, debt, gold, REITs, etc.

Tax planning becomes easier because you have complete control over exit timing, unlike in pooled funds.

Things to Keep in Mind Before Opting for PMS

• Understand the fees: PMS charges may include a fixed fee, performance-linked fee, or both. Read the fee disclosure document carefully.
• Ask about drawdowns: Don’t just look at CAGR. Ask how the portfolio handled 2020 or 2022 drawdowns.
• Check SEBI registration: Always verify that the portfolio manager is SEBI-registered and compliant.
• Alignment matters: Choose a PMS whose investment philosophy aligns with your own risk and return preferences.

Final Thoughts

In a world obsessed with DIY investing and social media stock gurus, Portfolio Management Services offers something rare: professionalism backed by accountability. It’s not for everyone, and that’s the point. But if you’ve built meaningful capital, lack the bandwidth for day-to-day portfolio tracking, and want market participation with a sharper edge, PMS might just be your next wealth move.
Ready to move from reactive investing to strategic financial management? Let DealPlexus guide you to the right Portfolio Management Services, where alpha meets alignment.