The Indian investment space has grown remarkably complex over the past few years. High-net-worth individuals and affluent investors are increasingly moving beyond mutual funds and fixed deposits, looking for strategies that offer both personalisation and superior returns. Portfolio Management Services have become the go-to solution for those seeking professional, actively managed portfolios tailored to their financial goals.
As we move through 2026, the case for PMS for active portfolio management has never been stronger. Let’s explore why this investment strategy is gaining traction among sophisticated investors across India.
Understanding Portfolio Management Services in the Indian Context
Portfolio Management Services represent a professional investment solution where expert managers handle your equity, debt, or hybrid portfolio on your behalf. Unlike mutual funds where your money gets pooled with other investors, PMS creates a customized portfolio specifically for you.
The Securities and Exchange Board of India regulates PMS providers, ensuring transparency and investor protection. As per SEBI regulations, the minimum investment threshold stands at ₹50 lakh, positioning PMS as a premium wealth management service designed for serious long-term investors.
Recent data from SEBI’s Annual Report shows that PMS assets under management have crossed ₹36 lakh crore as of June 2025, up from ₹27 lakh crore just two years earlier. This remarkable growth reflects increasing investor confidence in professionally managed, active strategies.
What Makes Active Portfolio Management Different
Active portfolio management takes a hands-on approach to investing. Portfolio managers make deliberate decisions about buying and selling securities based on extensive research, market analysis, and strategic positioning. The primary goal is to outperform benchmark indices rather than simply mirroring them.
This contrasts sharply with passive management strategies that aim to replicate index performance through minimal trading and automated approaches. While passive investing has its place in certain portfolios, active management offers distinct advantages, particularly in emerging markets like India.
Here’s why this matters. India remains a market where information gaps exist, and skilled fund managers can spot value early, avoid potential pitfalls, and selectively invest in companies with strong fundamentals. Passive funds, by design, cannot make these nuanced decisions. This is also why understanding the types of Portfolio Management Services (PMS) becomes important whether discretionary, non-discretionary, or advisory since each structure offers a different level of involvement and flexibility in active decision-making.
Six Compelling Reasons PMS Excels at Active Management
1. Professional Expertise You Can’t Replicate Alone
PMS gives you access to seasoned professionals with years of market experience and proven track records. These managers bring dedicated research teams, deep market knowledge, and strategic acumen that individual investors typically cannot match.
At Snazzy Wealth, the focus is on connecting clients with experienced portfolio managers who understand market cycles, sector dynamics, and risk management. This professional edge translates into informed investment decisions backed by rigorous analysis.
Portfolio managers use both fundamental and technical research, economic forecasting, and sector rotation strategies to position portfolios for growth. They can identify mispriced securities, spot emerging trends in infrastructure and technology, and make quick adjustments in response to market shifts.
2. Customisation That Aligns With Your Financial Goals
Unlike standardised mutual funds, PMS for active portfolio management builds strategies around your specific needs. Portfolio managers consider your financial objectives, risk appetite, investment horizon, and liquidity requirements before constructing your portfolio.
This personalisation means your investment strategy can adapt to life changes, market conditions, and evolving goals. Whether you’re planning for retirement, building a legacy, or funding a business expansion, your PMS portfolio reflects these priorities.
The customisation extends to asset allocation as well. Managers can combine large-cap stability with mid-cap growth potential and small-cap opportunities, creating a balanced approach tailored to your comfort level with volatility.
3. Direct Ownership and Complete Transparency
One significant advantage of PMS is direct ownership of securities in your demat account. You’re not buying units of a pooled fund but rather holding actual stocks, bonds, or other assets in your name.
This structure offers several benefits. You receive dividends directly, benefit from corporate actions, and maintain full visibility into your holdings. Regular performance reports detail your portfolio composition, transactions, and benchmark comparisons.
Snazzy Wealth emphasises this transparency in its approach to PMS, ensuring clients understand exactly what they own and why. This level of clarity helps build trust and enables informed decision-making.
4. Active Risk Management During Market Volatility
Markets don’t move in straight lines. During weak or volatile periods, actively managed portfolios tend to limit downside better than passive strategies. Index-based investments follow the market wherever it goes, up or down, with no ability to adapt.
Active portfolio managers can shift to cash, avoid overvalued sectors, or double down on undervalued opportunities. This flexibility becomes particularly valuable during market corrections or sectoral upheavals.
Recent data shows that across multiple categories, actively managed PMS strategies have delivered average alpha (excess returns above benchmarks) of over 6.5% for three years and over 4.4% for five years. This outperformance demonstrates the value of skilled, active management.
5. Access to Diversified Asset Classes
Most retail investors limit themselves to stocks and mutual funds. PMS broadens this horizon significantly. Portfolio managers can include Real Estate Investment Trusts, structured debt instruments, alternative assets, and even select international opportunities where permitted.
This diversification spreads risk across uncorrelated assets. When equity markets face headwinds, your debt or alternative investments may provide stability. The ability to access institutional-level opportunities gives PMS investors an edge over traditional retail investment approaches.
For investors working with platforms like Snazzy Wealth, this means access to a wider range of carefully vetted investment options that align with overall financial planning objectives.
6. Tax-Aware Portfolio Management
PMS offers superior tax planning compared to pooled investment vehicles. Portfolio managers can implement strategies like tax-loss harvesting, where specific securities are sold to offset capital gains with losses.
Managers can also adjust holding periods to take advantage of long-term capital gains tax benefits and customize withdrawal plans for tax optimisation. This tax-aware approach ensures you keep more of your returns rather than losing them to unnecessary tax liabilities.
For high-net-worth individuals, these tax efficiencies can make a meaningful difference to long-term wealth accumulation.
Why Active Management Still Works in Indian Markets
The debate between active and passive investing has tilted globally toward passive strategies in recent years. However, the Indian context presents a different picture.
India remains an emerging market with meaningful information gaps. Financial data doesn’t disseminate instantly or uniformly, giving skilled managers opportunities to identify value before it becomes widely recognised. The market also shows significant inefficiencies that active managers can exploit.
According to multiple performance studies, well-managed active portfolios in India consistently outperform benchmarks, particularly in mid-cap and small-cap segments where information asymmetry is highest. While large-cap efficiency has improved, even here, sector rotation and timing can add significant value.
A 2023 SPIVA India report showed that while over 60% of large-cap funds underperformed their benchmarks over five years, mid-cap and small-cap active managers showed selective outperformance. This reinforces the importance of choosing the right active management approach and provider.
What to Look for When Choosing PMS for Active Management
Not all PMS providers deliver equal results. When evaluating options, consider these factors:
Investment Philosophy: Does the strategy align with your risk tolerance and goals? Whether it’s value investing, growth-focused, thematic, or multi-cap approaches, the philosophy should resonate with you.
Track Record: Examine long-term CAGR (Compound Annual Growth Rate) rather than short-term performance. Look for consistency across market cycles, not just performance during bull runs.
Fee Structure: PMS typically charges 2 to 2.5% of assets under management annually, with some providers adding performance fees. Understand exactly what you’re paying and whether it’s a fixed fee or profit-sharing model.
Transparency and Reporting: The provider should clearly disclose portfolio composition, churn rates, benchmark comparisons, and risk metrics. Regular communication keeps you informed and engaged.
Regulatory Compliance: Verify that the PMS provider is registered with SEBI. This registration ensures adherence to regulatory standards designed to protect investor interests.
When working with advisory platforms like Snazzy Wealth, you gain access to guidance on selecting PMS providers that match your specific investment profile and objectives.
The Role of Technology in Modern PMS
Technology has transformed how PMS operates. Many providers now offer online portals giving real-time access to portfolio values, holdings, transaction history, and performance metrics. This digital approach makes tracking your investments more convenient than ever.
Some advanced PMS providers even use artificial intelligence and data analytics to enhance research, identify patterns, and optimise portfolio construction. While the human element remains essential for judgement and strategic decisions, technology amplifies the capabilities of portfolio managers.
For investors, this means better transparency, faster reporting, and more sophisticated analysis backing your investment decisions.
Who Should Consider PMS for Active Portfolio Management
PMS works best for specific investor profiles:
- Those with ₹50 lakh or more available for long-term investment
- Investors comfortable with a 5 to 10-year horizon who can ride market cycles
- High-net-worth individuals seeking returns that outperform standard market benchmarks
- Investors who value personalised strategies over one-size-fits-all approaches
- Those willing to accept higher fees in exchange for professional management and potential alpha generation
If you prefer complete liquidity, need capital in the near term, or feel uncomfortable with mark-to-market volatility, mutual funds or other investment vehicles might suit you better.
Common Misconceptions About PMS
Several myths persist about Portfolio Management Services that deserve clarification.
Myth 1: PMS guarantees returns. Reality: PMS returns depend on market performance and manager skill. While many strategies historically outperform benchmarks, no investment guarantees returns.
Myth 2: PMS is only for ultra-rich investors. Reality: While the ₹50 lakh minimum is substantial, it’s accessible to many affluent professionals, business owners, and families looking to grow their wealth systematically.
Myth 3: You lose control of your money. Reality: While discretionary PMS gives managers decision-making authority, you maintain ownership of securities and receive regular reports. Non-discretionary PMS requires your approval for transactions.
Myth 4: Fees make PMS not worthwhile. Reality: When active management delivers meaningful alpha, the fees become a worthwhile investment rather than a cost. The key is choosing managers with proven ability to generate superior risk-adjusted returns.
How to Get Started With PMS
The process of investing in PMS typically follows these steps:
First, identify your financial goals, risk appetite, and investment timeline. Be honest about your comfort level with volatility and your liquidity needs.
Next, research PMS providers registered with SEBI. Look for managers whose investment philosophy and track record align with your objectives. Platforms like Snazzy Wealth can help connect you with suitable options.
Once you’ve selected a provider, you’ll need to complete KYC (Know Your Customer) requirements and open or designate demat and bank accounts for the portfolio.
You’ll then sign a PMS Agreement and Investment Policy Statement that outlines the investment mandate, fee structure, risk parameters, and reporting schedule.
Finally, fund your account with the minimum required investment, either through cash transfer or by transferring eligible securities.
The Future of Active Portfolio Management in India
As India’s economy grows and its capital markets deepen, the opportunities for active management will continue expanding. New sectors emerge, business models evolve, and market dynamics shift, creating ongoing opportunities for skilled managers to add value.
The rise of technology, better research tools, and improved market infrastructure will enhance active managers’ capabilities rather than diminish them. While passive options will certainly grow, the case for active management in India remains compelling for investors seeking to outperform the market.
Portfolio Management Services represent the evolution of wealth management for high-net-worth individuals. They combine professional expertise, personalised strategies, transparency, and active risk management in a way that few other investment structures can match.
For investors willing to meet the minimum threshold and commit to a long-term partnership with skilled managers, PMS for active portfolio management offers a powerful path to wealth creation in 2026 and beyond.
Read More : Portfolio Management and Wealth Management
Frequently Asked Questions
Q1. What is the minimum investment required for PMS in India?
As per SEBI regulations, the minimum investment for Portfolio Management Services in India is ₹50 lakh. This can be funded through cash or by transferring eligible securities. This threshold ensures PMS remains a professional service designed for serious investors with substantial capital to deploy across diversified portfolios.
Q2. How is PMS different from actively managed mutual funds?
PMS creates a customized portfolio with direct security ownership in your demat account, while mutual funds pool money from multiple investors into a single portfolio where you own fund units. PMS offers greater personalisation, transparency, and flexibility in strategy execution, though it requires higher minimum investment and typically charges higher fees than mutual funds.
Q3. Can NRIs invest in Portfolio Management Services?
Yes, Non-Resident Indians can invest in PMS through NRE or NRO accounts, subject to SEBI and RBI guidelines. NRIs must maintain up-to-date KYC documentation and a demat account. Tax implications may differ for NRIs based on Double Tax Avoidance Agreement provisions between India and their country of residence.
Q4. What are the typical fees charged by PMS providers?
PMS providers typically charge management fees ranging from 2% to 2.5% of assets under management annually. Some providers also include performance fees, calculated as a percentage of returns above a predetermined hurdle rate. Fee structures can be fixed or variable, and investors should carefully evaluate the total cost before committing.
Q5. How do I know if a PMS provider is legitimate?
All legitimate PMS providers must be registered with the Securities and Exchange Board of India. You can verify a provider’s registration status on the SEBI website. Registered managers must maintain minimum net worth requirements, follow disclosure standards, and provide regular reporting to both investors and regulators, ensuring accountability and investor protection.