The PMS industry in India has grown from ₹18 lakh crore in 2019 to over ₹42 lakh crore in 2026. More investors are exploring it. But most people start with the wrong question.
They ask: “Which PMS has the best returns?” instead of asking “Does this PMS actually fits with what I’m trying to do?”
Picking a Portfolio Management Service is not like picking a mutual fund. It’s a more tailored, concentrated, and more expensive kind of investing. The stakes are higher, and so is the need to evaluate carefully.
Here’s what to actually look for.
Quick checklist: 10 features to look for in a PMS
| Feature | What to check |
| SEBI registration | Verify the portfolio manager’s registration on sebi.gov.in |
| Investment philosophy | Understand how investment decisions are made |
| Strategy | Check whether the strategy fits your objectives |
| Risk management | Understand drawdowns, concentration and risk controls |
| Performance | Examine long-term track record against the right benchmark |
| Portfolio transparency | Check how holdings, changes and performance are reported |
| Portfolio manager / team | Assess experience, tenure and investment process |
| Fees | Understand management fees, performance fees and other charges |
| Customisation | Check how closely the mandate can be tailored to your needs |
| Communication | Review reporting frequency, format and client servicing |
1. Check whether the portfolio manager is SEBI-registered
PMS is a regulated activity in India. Only entities registered with SEBI are permitted to offer portfolio management services.
Before you engage anyone, verify their registration. Don’t rely on a brand name, a website, or a referral alone.
What should you verify?
- Registered entity name (it may differ from the brand name)
- SEBI registration number
- Type of PMS services authorised
- Principal Officer details
- Disclosure document
How do I verify whether a PMS provider is SEBI-registered? Go to sebi.gov.in and look up the entity under Intermediaries. Cross-check the registration number. Also request the disclosure document registered portfolio managers are required to provide this to prospective clients.
2. Understand the investment philosophy
Two PMS providers can both say they invest in equities. Their approaches can be completely different.
One might focus on undervalued businesses with a long holding period. Another might rotate sectors based on momentum. A third might take concentrated bets in a handful of high-conviction stocks.
None of these is right or wrong. But they’ll behave very differently in different market conditions.
Questions to ask:
- Is the strategy value-oriented or growth-oriented?
- Concentrated (few stocks) or diversified (many stocks)?
- Large-cap, mid-cap or small-cap focused?
- What’s the expected holding period?
- How does the manager decide when to sell?
If the portfolio manager can’t explain this clearly, that’s already important information.
3. Check whether the strategy matches your goals
High returns on paper don’t matter if the strategy doesn’t suit you.
A PMS that delivered 40% last year through concentrated small-cap bets isn’t better for someone who needs steady, lower-volatility growth over 10 years. It might be entirely wrong.
Think through:
- What is your goal: wealth creation, capital preservation, income?
- How long can you stay invested?
- How much can your portfolio fall before you get uncomfortable?
- Do you prefer concentrated bets or broader diversification?
- Do you need the option to withdraw in the short term?
How do I know whether a PMS strategy is suitable for me? Map the strategy’s actual behaviour not just returns, but volatility and drawdowns against your own risk tolerance and investment horizon. If you’d have panicked and withdrawn during the strategy’s worst period, it probably isn’t a fit.
4. Evaluate risk management not just returns
Returns get all the attention. Risk is what determines whether you stay invested long enough to benefit.
What to look at:
- Maximum drawdown the biggest peak-to-trough fall the strategy has seen
- Portfolio concentration how much is in the top 5 or 10 holdings
- Sector exposure whether the portfolio is heavily weighted in one sector
- Cash allocation does the manager hold cash during volatile periods?
- Recovery time how long did it take to recover from significant falls?
What risk factors should I check before choosing a PMS? Focus on maximum drawdown, concentration and sector exposure. Ask how the portfolio behaved during the 2020 crash and the 2022 correction. Past performance doesn’t guarantee future results but how a strategy held up under stress tells you a lot about how it was actually managed.
5. Look at long-term performance and benchmark comparison
Don’t judge a PMS in one year. Markets have good years and bad years. A strategy that looks great in a bull run might collapse in a correction.
What a proper review looks like:
- Returns over 1, 3 and 5 years
- Performance in both rising and falling markets
- Comparison against the right benchmark (Nifty 50, Nifty Midcap, etc.)
- Consistency is performance driven by a few outlier years?
- Drawdown periods and recovery time
A small-cap PMS should be benchmarked against a small-cap index, not the Nifty 50. Make sure you’re comparing apples to apples.
Past performance does not guarantee future returns. A good track record shows the strategy has worked. It doesn’t guarantee it will continue to work the same way.
6. Understand who manages the portfolio
The person making investment decisions matters. So does the team behind them.
What to evaluate:
- How long has the portfolio manager run this specific strategy?
- What’s their professional background?
- Have they managed money across multiple market cycles?
- How are investment decisions made individually or by committee?
Also ask about the research team, risk management function and compliance setup. A strong named manager supported by a thin team carries different risk than one backed by a structured investment process.
7. Review portfolio transparency and reporting
You’re giving someone significant authority over your money. You should know what they’re doing with it.
What to check:
- How often do you receive portfolio statements?
- Can you see individual holdings and recent transactions?
- Is performance reported clearly against a benchmark?
- Are fees broken out separately?
- Can you reach someone when you have a question?
How transparent should a PMS be about its portfolio? You should receive regular statements showing your holdings, transaction history and performance along with applicable charges. Vague reporting is a red flag, not a feature.
8. Compare the fee structure carefully
Fees directly reduce your returns. In PMS, they can be more complex than a simple expense ratio.
| Fee type | What it means |
| Management fee | Annual fee charged on your portfolio value |
| Performance fee | A share of returns above a set threshold |
| Hurdle rate | The return the manager must exceed before earning a performance fee |
| High-water mark | Performance fees are only charged on new gains above previous highs |
| Brokerage and charges | Transaction costs, custodian fees, etc. |
| Exit charges | Fees for early withdrawal |
| GST | Applicable on management and performance fees |
Why gross returns aren’t your returns. A strategy that earns 18% but charges 2.5% management fees and a 20% performance fee above a 10% hurdle gives you a very different net return than the headline number suggests. Always ask what the fee impact looks like on net returns.
Check out our blog on minimum amount required to invest in portfolio management services for related insights.
9. Understand the PMS mandate and customisation
PMS comes in different forms.
Discretionary PMS The portfolio manager makes all investment decisions within your agreed mandate. You don’t approve of each trade.
Non-discretionary PMS The manager recommends, but you approve each transaction.
What level of customisation is available?
- Can specific stocks or sectors be excluded?
- Can the mandate be adjusted for your tax situation?
- Can your portfolio differ from the standard strategy?
The degree of customisation varies widely between providers. Check what’s actually available, not just what’s theoretically possible.
10. Check concentration and diversification
Some PMS strategies hold 8-12 stocks. Others hold 40+. Neither is automatically better.
What to look at:
- Total number of holdings
- Percentage in the top 5 or 10 stocks
- Sector concentration
- Market-cap distribution (large, mid, small cap)
- Portfolio turnover how frequently the portfolio changes
More stocks doesn’t mean better diversification. 40 stocks all in the same sector is more concentrated than it looks. The question is whether the concentration level matches the stated strategy and your own comfort with risk.
11. Understand the custody and account structure
In a PMS, your securities are held in your own demat account not pooled with other investors.
What to know:
- Your portfolio is in a demat account in your name
- The portfolio manager is authorised to transact within your mandate
- You receive statements showing your specific holdings and transactions
- You can view your portfolio directly in your demat account
This structure provides transparency. But it also means each client’s portfolio can differ slightly based on entry timing and the specific mandate agreed.
12. Read the disclosure document before investing
SEBI requires all registered portfolio managers to provide a disclosure document to prospective clients. Read it before you invest.
What it typically covers:
- Portfolio manager details and registration
- Investment approach and strategy
- Services offered
- Fee structure and all charges
- Risks
- Performance disclosures
- Conflicts of interest
- Grievance redressal mechanism
This document exists to help you make an informed decision. If anything is unclear, ask before you invest, not after.
13. Check the grievance redressal process
This is rarely the first thing investors think about. It should be on your list.
What to check:.
- Is there a dedicated client-service or grievance contact?
- What’s the typical response time?
- Is there an escalation mechanism?
- What are the regulatory complaint avenues? (SEBI SCORES is one option)
A provider with a clear process for resolving investor concerns is showing you how they treat clients when things don’t go as planned.
14. Final PMS selection checklist
Before you commit, tick these off:
☐ SEBI registration verified
☐ Investment philosophy understood
☐ Strategy assessed against your goals
☐ Risk profile checked
☐ Long-term performance reviewed across market cycles
☐ Benchmark identified and appropriate
☐ Maximum drawdown understood
☐ Portfolio concentration reviewed
☐ Portfolio manager / team experience assessed
☐ All fees understood (management, performance, brokerage, exit)
☐ Performance fee, hurdle rate and high-water mark clarified
☐ Reporting frequency and format confirmed
☐ Transparency standards verified
☐ Customisation options confirmed
☐ Disclosure document read
☐ Grievance mechanism understood
☐ Exit terms and lock-in confirmed
☐ Investment suitability assessed
How to compare two portfolio management services
Use this as a working template when evaluating options side by side:
| Factor | PMS A | PMS B |
| SEBI registration | Verify on sebi.gov.in, registered name, registration number, services authorised | Same. Confirm registration is current, not suspended |
| Investment philosophy | Value / growth / momentum? Concentrated or diversified? Expected holding period? | Same. If the manager can’t explain it clearly, note that |
| Strategy | How is the portfolio actually built, sector, market-cap, thematic? | Same. Check whether strategy logic is consistent with stated philosophy |
| Benchmark | Which index? Is it the right one, a small-cap strategy shouldn’t be benchmarked against Nifty 50 | Same. Benchmark mismatch inflates apparent returns |
| 3-year performance | Net-of-fee return vs benchmark over 3 years | Same |
| 5-year performance | Net-of-fee return vs benchmark over 5 years, does it cover a correction? | Same |
| Maximum drawdown | Biggest peak-to-trough fall. Ask specifically about 2020 and 2022 | Same. Was the drawdown consistent with the stated risk level? |
| Portfolio concentration | Number of holdings, % in top 5 stocks, sector and market-cap split | Same |
| Management fee | % of portfolio value, annually. Fixed or tiered? | Same |
| Performance fee | Is there one? What %? What’s the hurdle rate? Is there a high-water mark? | Same |
| Manager experience | How long has this person run this specific strategy, not their overall career | Same. What happens if they leave? |
| Reporting frequency | How often? Can you see individual holdings, transactions, benchmark comparison, net of fees? | Same |
| Customisation | What can actually be changed for your situation, not just what’s theoretically possible | Same |
Explore the differences between portfolio management service and wealth management.
Red flags to watch for
Slow down or walk away if you see any of these:
- “Guaranteed” or “assured” returns this is not permitted under SEBI regulations
- Pressure to decide quickly
- Inability to explain the investment strategy clearly
- Vague or incomplete answers on fees
- Performance shown without benchmark context
- Returns from cherry-picked short periods only
- Unclear regulatory credentials
- Incomplete or missing disclosure documentation
- High concentration with no clear rationale
- Little to no discussion of risk
What SEBI’s 2026 PMS consultation could mean for investors
Latest update September 2026
SEBI released a consultation paper on July 23, 2026 proposing the most comprehensive overhaul of the PMS regulatory framework since 2020. As of May 31, 2026, the PMS industry had 515 registered portfolio managers more than double the 226 in 2020.
A few proposals worth knowing about:
A new MF-PMS category. SEBI has proposed a “mutual fund-only” PMS category where portfolio managers invest purely through direct mutual fund schemes, including ETFs. The proposed minimum investment is ₹25 lakh lower than the current ₹50 lakh minimum for standard PMS.
Wider investment universe. Discretionary portfolio managers may be permitted to invest in overseas listed securities and pre-IPO (“to-be-listed”) securities. Unlisted investment-grade debt may also become an option for up to 10% of a client’s portfolio.
Important: These are proposals, not final regulations. The comment period closed on August 13, 2026. SEBI has not yet notified any changes. The current ₹50 lakh minimum remains in effect unless formally amended.
Check sebi.gov.in for any final notifications.
PMS vs mutual funds: key evaluation differences
| Factor | PMS | Mutual fund |
| Portfolio ownership | Individually held in your demat account | Pooled; you hold units |
| Customisation | Generally greater | Scheme-level only |
| Transparency | Portfolio-specific reporting | Scheme-level disclosures |
| Minimum investment | ₹50 lakh (current standard) | Varies by scheme |
| Fees | Management + performance fee structure | Expense ratio |
Interested in investing in mutual funds? Get in touch with us at Snazzy Wealth to get started.
Is PMS right for every investor?
Not automatically.
PMS may be relevant for investors who:
- Meet the minimum investment requirement
- Understand equity market risk
- Have a sufficiently long investment horizon
- Want professional, individually managed portfolios
- Understand the fee structure and its impact on net returns
- Can tolerate meaningful portfolio volatility
PMS may require reconsideration if:
- Liquidity is needed in the short term
- The investor can’t absorb significant short-term fluctuations
- The strategy or fee structure isn’t fully understood
- The investment objective doesn’t match what the PMS actually does
Frequently Asked Questions
Q: What features should I look for in a portfolio management service?
A: SEBI registration, investment philosophy, strategy, risk management, long-term performance, fees, transparency, portfolio manager experience, customisation and reporting. Returns alone are not a sufficient basis for evaluation.
Q: How do I choose the right PMS?
A: Start with your own goals, investment horizon and risk tolerance. Then find PMS strategies that match not the other way around.
Q: How do I evaluate a PMS provider?
A: Verify SEBI registration, read the disclosure document, understand the investment philosophy and fee structure, examine long-term performance across market cycles, and ask the 15 questions listed above.
Q: Should I choose a PMS based only on past returns?
A: No. Past returns don’t guarantee future performance. Look at how the portfolio behaved during downturns, what the maximum drawdown was, and whether the strategy matches your risk tolerance.
Q: What fees should I check before choosing a PMS?
A: Management fees, performance fees, hurdle rate, high-water mark provisions, brokerage and transaction costs, exit charges, and GST on applicable fees.
Q: How do I verify whether a PMS provider is SEBI-registered?
A: Visit sebi.gov.in and search for the entity under Intermediaries. Cross-check the registration number and review the required disclosures.
Q: What risks should I consider before investing in PMS?
A: Market risk, concentration risk, strategy-specific risk, liquidity risk, and the risk that the strategy doesn’t match your actual goals or time horizon.
Q: What is the minimum investment required for PMS in India?
A: The current SEBI minimum is ₹50 lakh for standard PMS. SEBI’s July 2026 consultation paper proposes ₹25 lakh for a new mutual-fund-only category, but this is not yet finalised. (See our dedicated guide on PMS minimum investment)
This article is for educational and general information purposes only. It is not investment, financial, legal or tax advice, nor a recommendation of any specific PMS provider, strategy or investment. PMS involves market risk and the possibility of significant losses. Past performance does not guarantee future results. Please read all relevant disclosures, consult a SEBI-registered investment advisor, and satisfy yourself on suitability before investing. SEBI’s proposed regulatory changes referenced in this article are consultation-stage proposals and have not been finalised as of the date of publication.
