What is Portfolio Management Service?
Portfolio Management Service (PMS) is a professional investment service where a qualified portfolio manager makes buy, sell, and hold decisions on behalf of the investor. In India, PMS is regulated by SEBI and requires a minimum investment of 50 lakh rupees. Unlike mutual funds where your money is pooled, PMS gives you a personalised portfolio — the shares are held directly in your individual Demat account. This transparency allows you to see every stock, every transaction, and every fee in real time. PMS providers must register with SEBI and follow the SEBI (Portfolio Managers) Regulations (see SEBI: https://www.sebi.gov.in/).
Types of PMS
PMS offerings fall into three broad categories. Discretionary PMS gives the fund manager full authority to make investment decisions without seeking approval for each trade. Non-discretionary PMS means the manager recommends trades, but the investor must approve each one before execution. Advisory PMS is the lightest touch — the manager provides research and recommendations, and the investor executes trades independently. Most high-net-worth individuals opt for discretionary PMS because it removes execution delays and allows the manager to act quickly on market opportunities.
PMS vs Mutual Funds
The key differences between PMS and mutual funds come down to customisation, minimum investment, and fee structure. Mutual funds are pooled vehicles with low entry points (as little as 500 rupees via SIP), standardised portfolios, and regulated expense ratios capped by SEBI. PMS offers a bespoke portfolio tailored to your goals, direct stock ownership, and typically charges a management fee plus a performance fee (profit share above a hurdle rate). PMS suits investors with larger capital who want concentrated, high-conviction portfolios and are comfortable with the higher minimum and fee structure.